New York On the Ethics of Expensing Credit Card Processing Fees to Clients

Stacked3Here is my recent Daily Record column. My past Daily Record articles can be accessed here.

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New York On the Ethics of Expensing Credit Card Processing Fees to Clients

One of the key business challenges lawyers face is getting paid. When cash or check were the only choices, there was little payment flexibility available for law firms or their clients. Today, things have changed. Most billing and law practice management software programs have built-in features that streamline the billing process and allow law firms to offer payment convenience in ways never before possible. From payment plans to credit cards and even “Pay Later” legal fee loan options, lawyers and their clients have more options than ever.

Regardless of the payment method, lawyers must comply with the ethics requirements surrounding legal fees. As new payment methods become available, ethics committees often weigh in to ensure that lawyers have sufficient guidance when accepting alternative payment methods. 

One area that has received considerable attention from regulators over the years is credit card payments, which are now commonly accepted in most law firms. Despite their widespread application, novel ethics issues surrounding credit card payments occasionally arise, which require input, such as the recent issue addressed by the New York State Bar Association Committee on Professional Ethics in Ethics Opinion 1258A.

At issue was whether a lawyer may pass on merchant processing fees to clients as an expense. At the outset, the Committee acknowledged that accepting credit cards as payment has long been permissible in New York provided that 1) the legal fee is reasonable, 2) client confidentiality is protected, 3) the credit card company’s actions do not impact client representation, 4) the client is advised before the charge is incurred and has the chance to dispute any billing errors, and 5) any disputes regarding the legal fee are handled according to the fee dispute resolution program outlined in 22 N.Y.C.R.R. Part 137.

Next, the Committee turned to the issue of expensing credit card fees to clients, explaining that excessive fees or expenses are prohibited by Rule 1.5(a) of the New York Rules of Professional Conduct (Rules). 

According to the Committee, this prohibition applies to a merchant processing fee since it is considered an “expense” under the Rules. As long as lawyers avoid charging excessive fees as defined in Rule 1.5(a), it is permissible to pass on merchant processing fees incurred when legal fees are paid by credit card to clients as expenses.  

Next, the Committee turned to Ethics Opinion 1050 from 2015, which addressed credit card payments made in the context of advance retainers. In that opinion, the Committee permitted the inquiring lawyer to, “as an administrative convenience, charge a client a nominal amount over the actual processing fees imposed on the lawyer by a credit card company in connection with the client’s payment by credit card of the lawyer’s advance payment retainer.”  

Doing so was conditioned upon 1) notifying the client and obtaining consent and 2) ensuring the additional fee was nominal and the total amount of the advance payment retainer, the processing fees, and the convenience fee were likewise reasonable under the circumstances.

The Committee then turned to the case at hand and applied the same principles, concluding that when legal fees beyond the initial retainer are paid by credit card, a “lawyer may pass on a merchant processing fee to clients who pay for legal services by credit card provided that both the amount of the legal fee and the amount of the processing fee are reasonable, and provided that the lawyer has explained to the client and obtained client consent to the additional charge in advance.”

In 2024, lawyers have unprecedented flexibility in payment methods. However, a thorough understanding of your ethical obligations is essential, especially when your firm broadens client payment options. This opinion is an important reminder to carefully navigate ethics rules when accepting credit card payments from clients, especially as technology continues to evolve and impact how law firms do business. 

Nicole Black is a Rochester, New York attorney, author, journalist, and the Head of SME and External Education at MyCase legal practice management software and LawPaypayment processing, AffiniPay companies. She is the nationally-recognized author of "Cloud Computing for Lawyers" (2012) and co-authors "Social Media for Lawyers: The Next Frontier" (2010), both published by the American Bar Association. She also co-authors "Criminal Law in New York," a Thomson Reuters treatise. She writes regular columns for Above the Law, ABA Journal, and The Daily Record, has authored hundreds of articles for other publications, and regularly speaks at conferences regarding the intersection of law and emerging technologies. She is an ABA Legal Rebel, and is listed on the Fastcase 50 and ABA LTRC Women in Legal Tech. She can be contacted at [email protected].

 


ABA Weighs in on Listserv Ethics

Stacked3Here is my recent Daily Record column. My past Daily Record articles can be accessed here.

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ABA Weighs in on Listserv Ethics

At first glance, you might assume that this article was published in the early 1990s and was reprinted by mistake. If so, you’d be wrong. The truth is, the American Bar Association (ABA), in its infinite wisdom, decided that May 2024—in the midst of the generative AI technology revolution—was the ideal time to address the ethical issues presented when lawyers interact on listservs, an email technology that has existed since 1986.

So hold on to your hats, early technology adopters, while we break this opinion down so that you have the ethics guidance needed to appropriately interact when using technology that has been around longer than the World Wide Web.

In Formal Opinion 511, the ABA considered whether lawyers interacting on listservs who sought advice regarding a client matter was “impliedly authorized to disclose information relating to the representation of a client or information that could lead to the discovery of such information.”

At the outset, the ABA Standing Committee on Ethics and Professional Responsibility explained that the duty of confidentiality prohibits lawyers from disclosing any information related to a client’s representation, no matter the source. Protected information is not limited to “communications protected by attorney-client privilege” and includes clients’ identities and even publicly available information like transcripts of proceedings.

Next, the Committee acknowledged that generally speaking, lawyers are permitted to consult with an attorney outside of their firm regarding a matter and may reveal information related to the representation in the absence of client consent, but only if the “information is anonymized or presented as a hypothetical and the information is revealed under circumstances in which…the information will not be further disclosed or otherwise used against the consulting lawyer’s client.” In addition, the information shared may not be privileged and must be non-prejudicial.

However, according to the Committee, this implied authority to disclose anonymized or hypothetical case-related information to other attorneys is limited to professional consultations with other lawyers. This is because “participation in most lawyer listserv discussion groups is significantly different from seeking out an individual lawyer or personally selected group of lawyers practicing in other firms for a consultation about a matter.”

The Committee noted that listservs can consist of unknown participants, and posts can be forwarded or otherwise shared and viewed by non-participants, including other lawyers representing a party in the same matter. As a result, “posting to a listserv creates greater risks than the lawyer-to-lawyer consultation.”

Given the risks, in the absence of client consent, lawyers are ethically prohibited from posting anything to a listserv that could reasonably be linked to an identifiable client, whether the intent is to obtain assistance in a case or otherwise engage on the listserv. 

Listserv use is not forbidden, however, and lawyers can interact in other ways. For example, asking more general questions, sharing news updates, requesting access to a case, or seeking a form or document template.

Finally, the Committee expanded the opinion’s rationale to other types of interactions. The Committee opined that the “principles set forth in this opinion…apply equally when lawyers communicate about their law practices with individuals outside their law firms by other media and in other settings, including when lawyers discuss their work at in-person gatherings.”

That single line, easily missed at the beginning of the opinion, ensures that the Committee’s conclusions stand the test of time. 

This opinion on listserv ethics is a necessary reminder of the importance of confidentiality in all lawyer interactions, even when using long-established technologies like listservs. While the ABA’s timing could have been better, this advisory opinion is worth a thorough read. Take a look and then keep the Committee’s advisements in mind as you interact with other lawyers online and off. 

Nicole Black is a Rochester, New York attorney, author, journalist, and the Head of SME and External Education at MyCase legal practice management software and LawPaypayment processing, AffiniPay companies. She is the nationally-recognized author of "Cloud Computing for Lawyers" (2012) and co-authors "Social Media for Lawyers: The Next Frontier" (2010), both published by the American Bar Association. She also co-authors "Criminal Law in New York," a Thomson Reuters treatise. She writes regular columns for Above the Law, ABA Journal, and The Daily Record, has authored hundreds of articles for other publications, and regularly speaks at conferences regarding the intersection of law and emerging technologies. She is an ABA Legal Rebel, and is listed on the Fastcase 50 and ABA LTRC Women in Legal Tech. She can be contacted at [email protected].

 


New Reports Highlight Generative AI Adoption Trends in Law

Stacked3Here is my recent Daily Record column. My past Daily Record articles can be accessed here.

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New Reports Highlight Generative AI Adoption Trends in Law

Generative artificial intelligence (GenAI) technology is advancing exponentially compared to technologies of years past. The pace of change is happening so quickly that it’s hard to keep up. One way to track the impact of GenAI tools on the legal profession is through survey reports, so I’m always interested when new ones are released that include data on perspectives about and rates of adoption of GenAI by lawyers.

This year, two reports with a similar focus were released. In mid-April, Thomson Reuters published the “2024 Generative AI in Professional Services Report,” (TR Report) where the survey was conducted in January and February 2024, and included data on law firm use of GenAI. Earlier in the year, the “2024 MyCase + LawPay Legal Industry Report,” (ML Report) was released. The survey for that report occurred during August and September of 2023, and the report was released in January. 

Comparing statistics from the two reports provides useful benchmarks that highlight trends in GenAI usage by legal professionals. 

The reports showed that the number of legal professionals who personally used GenAI tools for work-related reasons held steady, with 27% of respondents from both surveys using GenAI for work-related purposes. 

Similarly the data regarding how often those same individuals used GenAI was remarkably similar across the surveys. According to the TR Survey results, 42% of legal professionals who were actively using or planning to use GenAI were using the technology at least daily, and 31% were using it weekly. The ML data showed that legal professionals whose firms had adopted GenAI frequently relied on it throughout their workday, with 42% using it daily, and 29% using it weekly.

Another interesting finding from the ML Report was that for those already using GenAI, for 53%, efficiency increased somewhat, and for 24% it increased significantly. 

The tasks accomplished with GenAI were similar across both reports as well. According to the TR Report respondents, the top five use cases in law firms were legal research, document review, brief or memo drafting, document summarization, and drafting correspondence. 

For the ML report, the top use case was brainstorming (58%), followed by drafting correspondence followed (55%), general research (as opposed to legal research) (46%), document drafting (42%),  drafting document templates (39%), summarizing documents (38%), and editing documents (34%).

Concerns uniquely related to the issues presented when GenAI tools are used by legal professionals were also mirrored across the reports. The top worry of respondents from the TR Report was inaccurate responses, cited by 79%. This was followed by data security (68%); privacy and confidentiality of data (62%); compliance with laws and regulations (60%); and ethical and responsible usage (57%).

The top blockers identified in the ML Report were lack of knowledge about the technology (52%), concerns about ethical issues (39%), lack of trust in GAI output (39%), the infancy of the technology (33%), and concerns about privilege issues (25%).

Other notable data from the TR report addressed judicial perspectives on GenAI and the legal billing ramifications. First, survey responses highlighted the distrust and reticence about GenAI often expressed by members of our nation’s courts. Of the court respondents, only 8% indicated that their court systems were using or planned to use GenAI, and 60% reported there were no current plans to use it.

The perceived impact of GenAI on legal billing rates and methods was also explored. Notably, the majority of legal professionals, 58%, did not believe that GenAI would have any effect on the rates charged to clients. Over a third (39%), however, believed GenAI would lead to an increase in alternative fee arrangements. I tend to agree with those respondents and think there is a significant likelihood that sophisticated legal consumers like insurance companies and corporate counsel will put pressure on their legal providers to use GenAI to work more efficiently and thus charge more competitive, predictable legal fees.

Last but not least, the ML Report provided insight into how legal professionals expected GenAI to affect hiring practices. The survey results showed that 28% of firms planned to replace administrative functions with GenAI, followed by legal-specific functions (18%) and currently outsourced functions (13%). Another 10% shared that their firms intended to fully replace an administrative employee and 2% hoped to replace a lawyer.

These surveys highlight the steady pace of adoption of GenAI tools by legal professionals with the end result being enhanced efficiency and reduced workflow frictions. Despite the ongoing and valid concerns about accuracy and ethical issues, the legal profession has warmed up to GenAI far more quickly than the technologies that preceded it, and is gradually integrating GenAI into law firm operations. 

The times they are a-changin’ like never before. Now, more than ever, it’s essential to be open-minded and curious about emerging technologies, lest you be left behind.

Nicole Black is a Rochester, New York attorney, author, journalist, and the Head of SME and External Education at MyCase legal practice management software and LawPaypayment processing, AffiniPay companies. She is the nationally-recognized author of "Cloud Computing for Lawyers" (2012) and co-authors "Social Media for Lawyers: The Next Frontier" (2010), both published by the American Bar Association. She also co-authors "Criminal Law in New York," a Thomson Reuters treatise. She writes regular columns for Above the Law, ABA Journal, and The Daily Record, has authored hundreds of articles for other publications, and regularly speaks at conferences regarding the intersection of law and emerging technologies. She is an ABA Legal Rebel, and is listed on the Fastcase 50 and ABA LTRC Women in Legal Tech. She can be contacted at [email protected].

 


Stacked3Here is my recent Daily Record column. My past Daily Record articles can be accessed here.

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Top 5 LinkedIn Tips Every Lawyer Should Know

When I started writing this column in 2007, I often covered social media use for lawyers. However, because my interest lies in emerging technologies, the focus of my articles necessarily shifted over time as new advancements arrived that had the potential to change the legal profession.

Even though social networking may be considered old news in the technology world, online interactions continue to have a noticeable impact on the practice of law. Some platforms have gained increasing relevance while others have declined. LinkedIn is a prime example of a social media site that has gained ground since the pandemic, transforming from what was essentially an online resume repository to an active, engaging online site.

Given its significant rise, an update seemed necessary. I have over 207,000 followers on LinkedIn, so I have experience with the site and lots of advice to share! To that end, below you’ll find my top 5 tips for lawyers seeking to increase their presence on LinkedIn.

First and foremost, determine your goals. If you don’t know what you’re trying to achieve by interacting on LinkedIn, then your efforts will be wasted. Are you trying to reach potential clients? Is your intent to expand your professional network and increase referrals from colleagues? Or are you seeking to stay on top of the latest industry news and trends? Whatever your goals are, identify them before diving in. They will necessarily impact your engagement on the site.

Next, ensure that you have created a robust LinkedIn profile. Your headline should concisely describe your role and value to both clients and the profession.The headline section of your profile should concisely describe what you do and the value you bring to your clients and the profession. The first few words of your headline will appear whenever you comment on someone else’s post so are very important. Only include the most relevant work history, and carefully consider whether you want the dates that you obtained your education degrees to appear on your profile. Your age and stage of life will necessarily impact your preferences. 

The third tip is to post with a regular cadence. Your posting frequency will depend on your goals and the amount of time you have available to focus on your LinkedIn presence. Whether you post once a week or every other day, make sure to stick to your plan. That way your followers will know when to expect to hear from you. The LinkedIn algorithm also frowns on erratic posting patterns, so make a plan and stick to it. You’ll reach more connections that way, leading to greater engagement and success.

Fourth, post thoughtfully. Share a mix of personal observations intermixed with professional updates. Avoid blasting your successes and triumphs into the ether in the absence of other updates that include your personal and insightful perspective on trends or news of interest to your followers. The algorithm favors early morning posts that include an image, so keep that in mind. Finally, post links to any news stories or other website links in the comments rather than in the post since LinkedIn prefers posts that don’t send users to other websites.

Last but not least, carefully curate your network. Follow people who interest you and conform to your goals, develop a community of like-minded individuals, and consistently engage with your network. Read the posts of others and like, comment, and share them, when appropriate. LinkedIn, like all social media sites, is about engagement, so engage with others rather than talking at them from your virtual podium.

LinkedIn is a very different site than it was before the pandemic. Its newfound levels of engagement from professionals worldwide have resulted in a dynamic community of professionals that should not be overlooked. So don’t rest on your laurels. Take advantage of the many advantages it offers by following the I shared above. By implementing these tips, you’ll be well-positioned to maximize your impact and networking potential on LinkedIn.

Nicole Black is a Rochester, New York attorney, author, journalist, and the Head of SME and External Education at MyCase legal practice management software and LawPaypayment processing, AffiniPay companies. She is the nationally-recognized author of "Cloud Computing for Lawyers" (2012) and co-authors "Social Media for Lawyers: The Next Frontier" (2010), both published by the American Bar Association. She also co-authors "Criminal Law in New York," a Thomson Reuters treatise. She writes regular columns for Above the Law, ABA Journal, and The Daily Record, has authored hundreds of articles for other publications, and regularly speaks at conferences regarding the intersection of law and emerging technologies. She is an ABA Legal Rebel, and is listed on the Fastcase 50 and ABA LTRC Women in Legal Tech. She can be contacted at [email protected].

 


New York Bar Association New AI Guidance: Part 2

Stacked3Here is my recent Daily Record column. My past Daily Record articles can be accessed here.

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New York Bar Association New AI Guidance: Part 2

In last week’s column, I shared news of the recent artificial intelligence (AI) guidance handed down by the New York State Bar Association’s AI Task Force in the “Report and Recommendations of the New York State Bar Association Task Force on Artificial Intelligence.”

In this lengthy report, the Task Force addressed a wide range of issues, including 1) an in-depth examination of the evolution of AI and GenAI, 2) its risks and benefits, 3) how it impacts society and the practice of law, and 4) ethics guidelines and recommendations for lawyers who use these tools.

Last week we discussed several areas of focus from the report, including data preservation issues and the impact of deepfake evidence on the judicial process. Today we’ll dive into the legal ethics guidance provided in the report.

First, the Task Force considered Rule 1.2 and the scope of representation. It explained that if you will be using generative AI in the course of handling a matter, you should consider including a statement to that effect in your engagement letter, which your client should acknowledge receiving. 

The following sample language was suggested: “Use of Generative AI: While representing you, we may use generative AI tools and technology to assist in legal research, document drafting, and other legal tasks. This technology enables us to provide more efficient and cost-effective legal services. However, it is important to note that while generative AI can enhance our work, it is not a substitute for the expertise and judgment of our attorneys. We will exercise professional judgment in using AI-generated content and ensure its accuracy and appropriateness in your specific case.”

Diligence pursuant to Rule 1.3 was also addressed. The Task Force emphasized that as part of due diligence, lawyers must determine the benefits and drawbacks of using AI tools for a specific case. 

Next, the Task Force turned to Rule 1.4 and cautioned that lawyers should not rely on AI tools to replace client communication. Certainly, lawyers can use the tools to “assist with generating documents or responses” but the duty to ensure an open and clear line of communication lies with attorneys who must “maintain direct and effective communication with…client(s) and not rely solely on content” created by AI.

The impact of AI usage on legal fees under Rule 1.5 was also considered. The Task Force emphasized that AI-driven efficiency gains - or unrealized gains resulting from the failure to use this technology - should be taken into account when determining what constitutes a “reasonable” fee. Additionally, engagement letters should include mention of any surcharges billed to clients: “If you will add a ‘surcharge’ (i.e., an amount above actual cost) when using specific Tools, then you should clearly state such charges in your engagement letter, provided that the total charge remains reasonable.”

The Task Force also advised that the confidentiality requirements of Rule 1.6 apply when using AI software. Lawyers should obtain client consent to use these tools and have a continuing duty to ensure that providers will protect confidential data and keep each client’s data segregated and protected.

Next, the Task Force considered Rules 5.4 and 5.5, which require lawyers to exercise personal independence and prohibit them from relying solely on AI-produced output without reviewing and carefully considering the results. AI tools “should augment but not replace your legal work.”

The Task Force opined that because AI may increase efficiency significantly, it also has the potential to increase the “amount and scope of the pro bono legal services” that lawyers can provide. As such, under “the application of Rule 6.1, you are encouraged to use the Tools to enhance your pro bono work.”

Another ethics issue that the Task Force discussed was advertising and the requirements of Rule 7.1, which mandate lawyers to carefully oversee all AI-created content publicly posted on their behalf. Attorneys must ensure that it is “truthful and non-deceptive.”

Finally, the Task Force cautioned that Rule 7.3 requires avoiding AI software usage when generating “phone calls, chat board posts or other forms of solicitation” whether made by the attorney or someone else on their behalf.

This guidance should serve as encouragement to use these tools, not discouragement. The Task Force has provided comprehensive guidance to assist in integrating these tools into law practices. Rather than replacing the nuanced judgment of attorneys, AI improves their ability to represent clients effectively by increasing the efficiency and scope of legal services delivered. 

In other words, take advantage of all these tools have to offer. Follow the Task Force’s recommendations, embrace your duty of technology competence, and begin learning about generative AI today.

Nicole Black is a Rochester, New York attorney, author, journalist, and the Head of SME and External Education at MyCase legal practice management software and LawPay payment processing, AffiniPay companies. She is the nationally-recognized author of "Cloud Computing for Lawyers" (2012) and co-authors "Social Media for Lawyers: The Next Frontier" (2010), both published by the American Bar Association. She also co-authors "Criminal Law in New York," a Thomson Reuters treatise. She writes regular columns for Above the Law, ABA Journal, and The Daily Record, has authored hundreds of articles for other publications, and regularly speaks at conferences regarding the intersection of law and emerging technologies. She is an ABA Legal Rebel, and is listed on the Fastcase 50 and ABA LTRC Women in Legal Tech. She can be contacted at [email protected].


New York Bar Association New AI Guidance: Part 1

Stacked3Here is my recent Daily Record column. My past Daily Record articles can be accessed here.

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New York Bar Association New AI Guidance: Part 1

It’s been just over a year since OpenAI unleashed ChatGPT Plus powered by GPT-4 into the world, and things haven’t been the same since. From deepfake videos and sophisticated scams powered by generative artificial intelligence (GenAI) tools to lawyers making headlines for citing fake case citations obtained from GenAI requests, this technology is dramatically altering the way that lawyers - and swindlers - achieve their goals. 

Bar association ethics committees have been trying to keep up, with California, Florida, and New Jersey leading the way, having issued GenAI guidance for lawyers. Most recently, New York jumped into the fray on April 6, releasing the lengthy 91-page “Report and Recommendations of the New York State Bar Association Task Force on Artificial Intelligence.” 

This far-reaching report provides: 1) an in-depth examination of the evolution of AI and GenAI, 2) its risks and benefits, 3) how it impacts society and the practice of law, and 4) ethics guidelines and recommendations for lawyers who use these tools.

Today we’ll focus on broader issues addressed in the report that impact the legal profession and courts and will cover the legal ethics guidance in the next column.   

One reason for the report’s breadth is that it isn’t limited to the ethics issues presented by GenAI usage in the legal profession, and instead touches on the many other legal implications that arise when lawyers incorporate these tools into their daily workflows. According to the Committee, there are a number of notable issues attorneys should consider when utilizing ChatGPT and other similar generative AI tools. 

First, when choosing a provider, a thorough understanding of licensing information, the terms of use, and applicable privacy policies is required. Lawyers should also determine what happens to data input into a GenAI tool. Will the provider use that data to train or refine their AI model? Will the provider allow third parties to access that data to train or improve their AI model? Are data inputs protected and stored in an encrypted, closed environment that anonymizes queries and prevents third parties, including opponents and adversaries, from accessing them?

The Committee also addressed the data preservation implications triggered when legal professionals use GenAI to prepare a case for litigation. According to the Committee, “If the data that is inputted into the AI application is temporary/ephemeral, but also relevant and responsive to the litigation, parties have the duty to preserve this electronically stored information.”

Finally, another important topic included in the report was the impact of GenAI-created deepfake evidence and its impact on trials. The Committee acknowledged the challenge presented by synthetic evidence, explaining that “(d)eciding issues of relevance, reliability, admissibility and authenticity may still not prevent deepfake evidence from being presented in court and to a jury.”

According to the Committee, the solution to this problem — and to all issues presented by the impact of GenAI on the practice of law — is education. Lawyers, law students, judges, and regulators must take steps to ensure they fully understand this technology and how existing laws and regulations apply to it. 

Importantly, the Committee emphasized that this new technology is no different than the ones that preceded it, and thus “(m)any of the risks posed by AI are more sophisticated versions of problems that already exist and are already addressed by court rules, professional conduct rules and other law and regulations. Furthermore, many risks are mitigated through understanding the technology and how AI will utilize data input into the AI system.” 

In other words, embracing technology, not fearing it, is the only path forward. Adapting and learning about these tools is essential for maintaining efficacy and relevance in a technology-first world. Of course, GenAI adoption must be done ethically, and the Committee provided lots of helpful guidance in that regard. We’ll learn more about that in my next column when we explore the ethical implications outlined in the report, so stay tuned.

Nicole Black is a Rochester, New York attorney, author, journalist, and the Head of SME and External Education at MyCase legal practice management software and LawPay payment processing, AffiniPay companies. She is the nationally-recognized author of "Cloud Computing for Lawyers" (2012) and co-authors "Social Media for Lawyers: The Next Frontier" (2010), both published by the American Bar Association. She also co-authors "Criminal Law in New York," a Thomson Reuters treatise. She writes regular columns for Above the Law, ABA Journal, and The Daily Record, has authored hundreds of articles for other publications, and regularly speaks at conferences regarding the intersection of law and emerging technologies. She is an ABA Legal Rebel, and is listed on the Fastcase 50 and ABA LTRC Women in Legal Tech. She can be contacted at [email protected].

 

 

 




 


ABA Legal Profession Report Part 2: Demographics and Technology

Stacked3Here is my recent Daily Record column. My past Daily Record articles can be accessed here.

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ABA Legal Profession Report Part 2: Demographics and Technology

If you ask a generative artificial intelligence (AI) tool to provide a picture of lawyers, judges, or law students you’ll likely find the image produced will include groups of white men, with very few women or people of color. This is because the data these tools rely on includes the entirety of the internet, which necessarily reflects the biases of our culture.

However, these AI biases do not capture the significant demographic shifts our profession has seen in recent decades. Caucasian men are no longer the majority in law schools, with more women and people of color graduating than ever before. 

Despite these advances, data from the 2023 ABA Legal Profession Report reveals that men still dominate law firms’ upper ranks, mirroring AI-generated stereotypes.

In addition to demographic data, the report also includes notable statistics on technology adoption in the legal industry. Like lawyer demographics, change is occurring, but not as quickly as desired. 

I'll discuss key findings below, which illustrate that shifts in demographics and technology signal a profession in flux.

According to the report, there were 1,331,290 active lawyers last year, marking a 5% increase over the past decade. A substantial number of those lawyers (27%) were found in two states: New York (188,341) and California (170,959). Only 39% of lawyers were women, up from 24% in 2013. The median age was 46 years.

During that same timeframe, the percentage of lawyers of color nearly doubled in the past decade, increasing from 11% to 21%. 

The makeup of judges was similar. Sitting federal judges were predominantly male (68%) and white (76%). In state high courts, only 20% percent of justices were people of color (compared to 40% of the general population), and 58% were men (compared to 50% of the population).

Turning to the technology data, adoption rates are slower in some cases. For example, smart assistants like Amazon’s Alexa are rarely used by lawyers, with only 9% reporting usage, and 3% doing so regularly. Similarly, only 8% of lawyers shared that they had a virtual law practice.

However, social media usage, once frowned upon, has become commonplace. The vast majority of law firms (89%) now have a social media presence. Not surprisingly, the most popular social media network was LinkedIn at 87% followed by Facebook at 62%. X, formerly Twitter, ranked low with 38% of firms using it, as did Martindale (37%).

Individual usage followed suit, with 82% of lawyers reporting they interacted on social media platforms for professional purposes. LinkedIn ranked first with 96% using it, followed by Facebook (31%) and X (20%).

Another notable statistic was that the majority of lawyers now use laptops as their primary computer. 56% reported using laptops in 2022, up from 53% in 2021. Windows was the preferred operating system with 83% of lawyers using it. A mere 6% of lawyers reported that they used Mac operating systems. 

Legal research was one of the main things lawyers used computers for, with lawyers spending 18% of their time conducting research. Westlaw/Westlaw Edge was the most popular platform (69%). Lexis/Lexis+ was next at 42%. The top free legal research sites were government websites (63%), FindLaw (56%), and Cornell’s Legal Information Institute (54%).

Finally, there is a clear smartphone brand preference in our profession, with 80% of lawyers sharing that they use iPhones. 

The 2023 ABA Legal Profession Report evinces a profession in the midst of significant change, both demographically and technologically. Despite the notable trend toward greater diversity in law schools, our profession nevertheless remains top-heavy with white men. 

On the technology front, the legal industry is embracing change at a predictably cautious pace, with increasing adoption of more familiar technologies like social media and mobile devices. 

These developments, while sometimes frustratingly slow-paced, signal a complex but progressive path toward a more inclusive and technologically adept legal profession. Hopefully, sooner rather than later, the pace of change will increase, resulting in more diverse and tech-savvy lawyers.

Nicole Black is a Rochester, New York attorney, author, journalist, and the Head of SME and External Education at MyCase legal practice management software and LawPay payment processing, AffiniPay companies. She is the nationally-recognized author of "Cloud Computing for Lawyers" (2012) and co-authors "Social Media for Lawyers: The Next Frontier" (2010), both published by the American Bar Association. She also co-authors "Criminal Law in New York," a Thomson Reuters treatise. She writes regular columns for Above the Law, ABA Journal, and The Daily Record, has authored hundreds of articles for other publications, and regularly speaks at conferences regarding the intersection of law and emerging technologies. She is an ABA Legal Rebel, and is listed on the Fastcase 50 and ABA LTRC Women in Legal Tech. She can be contacted at [email protected].

 


ABA Legal Profession Report Part 1: Wages, Pro Bono Work, and Mental Health

Stacked3Here is my recent Daily Record column. My past Daily Record articles can be accessed here.

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ABA Legal Profession Report Part 1: Wages, Pro Bono Work, and Mental Health

The legal profession is in the midst of significant change, with technological advancement driving much of it. Firms are becoming more efficient, impacting the structure of law firms, the day-to-day work performed, and even the pricing of legal services. The shifting landscape presents challenges that can make acclimation to rapid change difficult in the absence of perspective.

That’s where the 2023 American Bar Association Profile of the Legal Profession Report comes in. Released at the end of 2023, it offers a deep dive into key data points about the legal profession including demographics, technology usage, and lawyer well-being, 

I plan to cover some of the most interesting findings in this 2-part series. In today’s article, statistics about earnings, pro bono services, and mental health will be examined while notable demographics and technology findings will be explored in Part 2.

Now let’s dive into the data, starting with attorney wages. Overall, salary increases in recent years have occurred at respectable, albeit varying, rates, which were largely dependent on a lawyer’s position within a firm and the industry overall.

According to the report, the average wage was $163,770 in 2022. Notably, during the twenty years leading up to 2022, salaries increased by 55%, a slightly lower rate than inflation, which increased by 59%.

First-year associates have fared well, with the last two years seeing a 21% wage increase of $35,000. The average salary rose from $165,000 in 2021 to $200,000 in 2023. Not surprisingly, entry-level lawyers in private firms fared far better salary-wise than those in public service, earning a median salary of $200,000 compared to the $57,500 to $63,000 earned by public service attorneys.

Unfortunately, many young attorneys are also saddled with significant educational debt. The data showed the average student loan debt amounted to $120,000 for education expenses related to law school and undergraduate education.

Moving on to pro bono data, we learned that 52% of attorneys provided pro bono services during the previous year, and on average worked 37 hours. The most common practice areas were family law, criminal law, litigation, estate planning or probate, and real estate. The tasks most likely to be performed ran the gamut and included providing advice (74%), reviewing or drafting documents (66%), interviewing clients (64%), writing letters (36%), working with other attorneys (35%), providing full representation in court (29%) and settlement negotiation(18%).

Finally, let’s take a look at the mental health statistics from the report, which were illuminating and troubling. One concerning trend evinced was that 8.5% of lawyers think about suicide compared to 4.3% of the general population. This percentage increases as age decreases, with over 14% of junior associates reporting suicidal thoughts compared to 7% of senior associates, 8% of junior partners, 6% of senior partners, and 7% of managing partners.

Gender also impacted the mental health data, with 9.1% of men and 7.8% of women lawyers having suicidal ideations. Notably, however, women were also more likely to report feelings of severe or moderate stress (67% vs. 49%), anxiety (23% vs. 15%), and depression (20% vs.15%) than their male counterparts. 

The report also highlighted the high incidence of sexual harassment and assault experienced by women attorneys, with 50% sharing they’d experienced unwanted sexual conduct in the workplace. One-quarter of women shared that they feared retaliation and thus failed to report the unwanted contact, and another 16% lost work opportunities after declining sexual advances.

Given these data points, it’s not at all surprising to learn that women lawyers were more likely to partake in hazardous drinking (34% vs. 25%) and were also more likely to consider leaving the profession because of the negative mental health effects experienced (24% vs. 17%).

From the wage, pro bono, and mental health data, it’s clear that practicing law has many benefits, and many drawbacks as well. The mental health statistics are particularly troubling and highlight key areas that need to be addressed. Tackling these issues will be challenging given the many other changes occurring in our profession, some of which I’ll cover in my next article, that have the potential to dramatically impact the practice of law. 

Nicole Black is a Rochester, New York attorney, author, journalist, and the Head of SME and External Education at MyCase legal practice management software, an AffiniPay company. She is the nationally-recognized author of "Cloud Computing for Lawyers" (2012) and co-authors "Social Media for Lawyers: The Next Frontier" (2010), both published by the American Bar Association. She also co-authors "Criminal Law in New York," a Thomson Reuters treatise. She writes regular columns for Above the Law, ABA Journal, and The Daily Record, has authored hundreds of articles for other publications, and regularly speaks at conferences regarding the intersection of law and emerging technologies. She is an ABA Legal Rebel, and is listed on the Fastcase 50 and ABA LTRC Women in Legal Tech. She can be contacted at [email protected].

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

 

 

 

 

 




The Pros and Cons of the Apple Vision Pro for Lawyers

Stacked3Here is my recent Daily Record column. My past Daily Record articles can be accessed here.

*****

The Pros and Cons of the Apple Vision Pro for Lawyers

As a self-professed technology geek, I’m often first in line to buy the latest and greatest new gadgets, especially if they’re in the Apple ecosystem. Even so, when the Apple Vision Pro was released last month, I balked at the price: a whopping $3,500. 

For that reason alone, I was determined to wait until the second-generation headset was released before investing in one. I held steadfast in my determination for all of four days. Then, after reading a few reviews and seeing videos of it in action, I gave in and headed to the Apple Store.

I’m now the proud owner of an Apple Vision Pro. I don’t regret my purchase, but after conducting a deep dive into Apple’s version of mixed reality (a combination of augmented and virtual reality) for the past few weeks, I would not recommend that most lawyers consider buying it at this early stage. Here’s why.

The app ecosystem is limited. As a result, like the iPhone when it was first released, the Apple Vision Pro has lots of potential, but much of it remains unrealized at this early stage. There are only a handful of practical apps designed for business use, but the ones available are very impressive. 

For example, Zoom. The video conference occurs in a virtual environment using my “persona,” a realistic spatial representation of my likeness, and it’s a very interesting, immersive experience. Over time I can envision how improvements to the interface will provide for a more realistic, interactive virtual meeting experience.

Another great business use case is the ability to display your Mac computer screen in front of you while wearing the headset. The virtual display is fully responsive and you can interact with it using your Mac’s keyboard and trackpad. Viewing a large computer screen in front of you is a very intuitive and immersive way to work and feels somewhat “next level.” 

That being said, another drawback is the eye, neck, and other discomfort caused by the weight of the headset and the virtual environment itself. Although the headset is very advanced, and far superior to most of its predecessors in the virtual reality space, it’s still fairly heavy. The weight of the headset can cause neck and face strain in many people, which will limit the amount of time you’re able to tolerate wearing it. Still others find the virtual environment causes them to feel nauseous. However, as the technology improves, many of these issues will disappear and make long-term use throughout the workday more palatable.

Cost is another major deterrent for most people. $3,500 is a lot of money for a headset that is first generation and a work in progress. Unless you’re a diehard early adopter like myself, it almost certainly isn’t worth the hefty price tag.

Even so, it’s an incredibly impressive piece of technology. The cutting-edge gestural interface is next to none, and allows you to interact with the digital content in three-dimensional space by tracking your eyes and hand movements, much like the scene from the movie “Minority Report.” 

The virtual environment itself is incredibly realistic and immersive. Right now, my favorite thing to do is watch movies and shows using the headset. You truly feel like you’re in a movie theater with a large screen, fantastic image quality, and incredible surround sound. The experience simply can’t be beat.

As the technology improves, more apps are released, and the price comes down, you’ll find that you’ll hear about it a lot more, especially for business use cases. Because you can have multiple apps open at once, pinned to different locations in your house, or your workspace, it will become the ultimate way to quickly and effortlessly interact with your data, documents, and colleagues. 

For most lawyers, it’s too early to invest in this technology, but in the near future - likely sooner than you might think - you’ll want to learn more about the potential offered by this technology, and might even be convinced to take a leap and explore all that it has to offer.

Nicole Black is a Rochester, New York attorney, author, journalist, and the Head of SME and External Education at MyCase legal practice management software, an AffiniPay company. She is the nationally-recognized author of "Cloud Computing for Lawyers" (2012) and co-authors "Social Media for Lawyers: The Next Frontier" (2010), both published by the American Bar Association. She also co-authors "Criminal Law in New York," a Thomson Reuters treatise. She writes regular columns for Above the Law, ABA Journal, and The Daily Record, has authored hundreds of articles for other publications, and regularly speaks at conferences regarding the intersection of law and emerging technologies. She is an ABA Legal Rebel, and is listed on the Fastcase 50 and ABA LTRC Women in Legal Tech. She can be contacted at [email protected].

 


North Carolina Adds to Growing Body of AI Ethics Guidance for Lawyers

Stacked3Here is my recent Daily Record column. My past Daily Record articles can be accessed here.

*****

North Carolina Adds to Growing Body of AI Ethics Guidance for Lawyers

As generative AI (GAI) technology proliferates and legal software companies focus on rolling this new functionality into their platforms, ethics committees across the country are recognizing and responding to the implementation challenges that lawyers face. GAI providers promise streamlined workflows and increased efficiencies, but with these benefits come concerns about ensuring accuracy in the results, adequate supervision, confidentiality preservation, and compliant billing processes. 

Because of the many hurdles faced when using GAI in its current state, several jurisdictions have issued ethics guidance over the past few months, which I’ve covered in earlier columns. The State Bar of California was first when it released guidance in November 2023. This was followed by Florida, which issued Ethics Opinion 24-1 on January 19th, and the New Jersey Supreme Court Committee on Artificial Intelligence and the Courts preliminary guidelines handed down on January 24th.

On January 19th, the North Carolina State Bar Council jumped into the fray with proposed guidance, 2023 Formal Ethics Opinion 4 (online: https://www.ncbar.gov/for-lawyers/ethics/proposed-opinions/), which is open for comments through March 30th.

This proposed opinion offers a thorough analysis of the many issues lawyers encounter when using GAI tools, along with commonsense and clear-cut guidance on the ins and outs of adopting GAI in an ethically compliant manner. 

Many of the Council’s conclusions mirror those reached by other ethics committees. For example, the Council concluded that lawyers may use GAI, but the duty of competence means they are responsible for “reviewing, evaluating, and ultimately relying upon the work produced by someone—or something—other than the lawyer,” which includes GAI output. Furthermore, the duty of technology competence requires lawyers to learn bout GAI so that they can responsibly “exercise independent professional judgment in determining how (or if)” using GAI is appropriate.

The Council opined that lawyers must carefully vet GAI providers to ensure confidential client information is protected, just as they are required to do when “providing confidential information to a third-party software program (practice management, cloud storage, etc.)” The Committee cautioned that when lawyers use consumer-grade GAI software, they should avoid “inputting client-specific information into publicly available AI resources” to prevent confidential data from being used to train the AI system.”

Importantly, the Committee clarified that when lawyers use GAI to help draft pleadings and adopt the output as their own, signing the pleading certifies their “good faith belief as to the factual and legal assertions therein,” a practice that necessarily applies to all pleadings submitted to the court, regardless of their origination source.

Client consent was also addressed. The Committee determined that when GAI is used for ordinary tasks like “conducting legal research or generic case/practice management,” client consent is unnecessary, whereas it would be required in advance for any substantive tasks that are “akin to outsourcing legal work to a nonlawyer.”

Finally, the Committee addressed legal billing issues and clarified that for hourly billing, lawyers may only bill clients for time actually spent using GAI and may not bill for the time saved through the use of this tool. However, the Committee suggested that due to the arguable reduction in billable hours that can be achieved through the use of GAI, lawyers might want to consider transitioning to flat fee billing “for the drafting of documents—even when using AI to assist in drafting—provided the flat fee charged is not clearly excessive and the client consents to the billing structure.”

As for expensing the cost of using a GAI tool, doing so is only permissible when the fee charged is “for actual expenses incurred when employing AI in the furtherance of a client’s legal services, provided the expenses charged are accurate, not clearly excessive, and the client consents to the charge, preferably in writing.” In comparison, charging a general administrative fee to clients to cover the cost of AI tools embedded in software generally used by the firm is unacceptable.

North Carolina's addition to the growing body of AI ethics guidance for lawyers highlights the important balance required to leverage AI's benefits while adhering to ethical standards. The conclusions in the opinion align with those of other jurisdictions, and emphasize the core principles of legal ethics remain unchanged even as technology advances at a rapid pace. As we continue to witness the integration of AI into various aspects of legal work, guidance like North Carolina's becomes invaluable for lawyers striving to maintain the highest standards of professionalism in the digital age.

Nicole Black is a Rochester, New York attorney, author, journalist, and the Head of SME and External Education at MyCase legal practice management software, an AffiniPay company. She is the nationally-recognized author of "Cloud Computing for Lawyers" (2012) and co-authors "Social Media for Lawyers: The Next Frontier" (2010), both published by the American Bar Association. She also co-authors "Criminal Law in New York," a Thomson Reuters treatise. She writes regular columns for Above the Law, ABA Journal, and The Daily Record, has authored hundreds of articles for other publications, and regularly speaks at conferences regarding the intersection of law and emerging technologies. She is an ABA Legal Rebel, and is listed on the Fastcase 50 and ABA LTRC Women in Legal Tech. She can be contacted at [email protected].

 


New Jersey Preliminary AI Guidelines Released 

Stacked3Here is my recent Daily Record column. My past Daily Record articles can be accessed here.

*****


New Jersey Preliminary AI Guidelines Released 

If you’re hesitant to test drive generative artificial intelligence technology (GAI), rest assured, you’re not alone. According to the results of the newly released LawPay and MyCase 2024 Legal Technology Report (online: https://www.lawpay.com/support/resources/reports/2024-legal-industry-report/), only 24% of law firms had implemented GAI tools as of September of 2023. Respondents cited many blockers to adoption including a lack of sufficient knowledge about GAI and how to use it (61%) and ethical concerns (53%). 

Fortunately, for those holding out due to lack of ethics guidance, help has arrived. Legal ethics committees across the country are responding to the demand for assistance and are rapidly handing down guidance. The State Bar of California’s Committee on Professional Responsibility and Conduct was the first to step up and release a thorough roadmap for ethical generative AI adoption in law firms in November 2023. This guidance was extensive and addressed many different issues including technology competence, confidentiality, and the requirement of candor about AI usage with legal clients and courts.

More recently, both Florida and New Jersey released guidance. Florida issued Ethics Opinion 24-1 on January 19th, which I covered in last week’s column. Then, the  New Jersey Supreme Court Committee on Artificial Intelligence and the Courts handed down preliminary guidelines on January 24th (online: https://njsba.com/wp-content/uploads/2024/01/Preliminary-Guidelines-on-the-Use-of-AI-by-NJ-Lawyers.pdf), discussed below.

At the outset, the committee cautioned that its guidelines were preliminary and did not address all issues triggered by GAI usage, including advertising and legal billing. The Committee explained that additional guidance may be issued as warranted as new concerns about GAI usage arise.

Next, the Committee acknowledged the inevitability of GAI use in the practice of law: “[t]he ongoing integration of AI into other technologies suggests that its use soon will be unavoidable, including for lawyers.” Like other jurisdictions, the Committee also emphasized the need for lawyers to ensure adequate oversight of all AI usage “by other lawyers and non-lawyer staff” due to the infancy of these tools.  

Confidentiality was also addressed, with the Committee highlighting the need to carefully vet GAI providers, and acknowledging the rapid growth in the number of legal-specific GAI tools now available to lawyers: “Today, the market is replete with an array of Al tools, including some specifically designed for lawyers, as well as others in development for use by law firms. A lawyer is responsible for ensuring the security of an Al system before entering any non-public client information.”

One notable conclusion reached was that, in contrast to the Florida committee’s conclusion to the contrary, the New Jersey committee determined that the rules “do not impose an affirmative obligation on lawyers to tell clients every time that they use AI,” but there are some situations that might require it.

Finally, the Committee reminded lawyers of the importance of maintaining technology competence in light of the rapid pace of GAI advancement: “In this complex and evolving landscape, lawyers must decide whether and to what extent AI can be used so as to maintain compliance with ethical standards without falling behind their colleagues.”

In conclusion, the recent release of preliminary AI guidelines by legal ethics committees in California, Florida, and New Jersey, provides valuable insight for lawyers seeking to adopt GAI into their firms. However, as highlighted by the Louisiana Supreme Court's recent letter (online: https://www.lsba.org/documents/News/LSBANews/LASCLetterAI.pdf), while this guidance is helpful, it may be unnecessary. According to the Supreme Court, the existing ethical and professional rules and opinions issued that govern the bench and the Bar are sufficient since “ the ethical and professional rules governing the bench and the Bar are robust and broad enough to cover the landscape of issues presented by AI in its current forms.”

In other words, even without specific ethics guidance, GAI adoption is no different than the adoption of other types of technology, so there’s nothing holding you back from learning about GAI and making educated, informed decisions about whether and how to use it in your law firm.

Nicole Black is a Rochester, New York attorney, author, journalist, and the Head of SME and External Education at MyCase legal practice management software, an AffiniPay company. She is the nationally-recognized author of "Cloud Computing for Lawyers" (2012) and co-authors "Social Media for Lawyers: The Next Frontier" (2010), both published by the American Bar Association. She also co-authors "Criminal Law in New York," a Thomson Reuters treatise. She writes regular columns for Above the Law, ABA Journal, and The Daily Record, has authored hundreds of articles for other publications, and regularly speaks at conferences regarding the intersection of law and emerging technologies. She is an ABA Legal Rebel, and is listed on the Fastcase 50 and ABA LTRC Women in Legal Tech. She can be contacted at [email protected].

 





 


Florida Bar Hands Down Opinion on AI Ethics

Stacked3Here is my recent Daily Record column. My past Daily Record articles can be accessed here.

*****

Florida Bar Hands Down Opinion on AI Ethics

We’re heading into the second year of generative artificial intelligence (GAI) availability, and if you haven’t been paying attention to this cutting-edge tool, there’s no better time than the present. GAI is advancing at an exponential rate and is rapidly being incorporated into the software tools you use every day. From legal research and contract drafting to law practice management and document editing, GAI is everywhere, and avoiding it is no longer an option. 

This is especially so now that legal ethics committees across the country are rising to the challenge and issuing GAI guidance. The first to do so was the State Bar of California’s Committee on Professional Responsibility and Conduct, which handed down a thorough roadmap for ethical generative AI adoption in law firms in November 2023. As I discussed in another article, the guidance provided was extensive and covered many different ethical issues including technology competence, confidentiality, and the requirement of candor, both with legal clients and courts.

More recently, both Florida and New Jersey released guidance, with Florida issuing Ethics Opinion 24-1 on January 19th, and New Jersey handing down preliminary guidelines on January 24th. Below I’ll break down the Florida opinion, and in my next article will address the New Jersey guidance.

In Florida Bar Ethics Opinion 24-1 (online: https://www.floridabar.org/etopinions/opinion-24-1/), the Board Review Committee on Professional Ethics concluded that lawyers may use GAI, but, of course, must do so ethically. The Committee addressed a broad range of ethics issues in the opinion, ranging from confidentiality and pricing to supervision and lawyer advertising.

At the outset the Committee explained that GAI tools can “create original images, analyze documents, and draft briefs based on written prompts,” but in doing so can hallucinate, which means providing “inaccurate answers that sound convincing.” As a result, the Committee cautioned that all output must be carefully reviewed for accuracy.

Next, the Committee reviewed GAI in the context of confidentiality and advised that lawyers who use GAI must have a thorough understanding of how the GAI technology handles data input and whether it uses input to train the GAI system. 

According to the Committee, a key way to do that is to vet GAI providers in much the same way as cloud computing providers. Take steps to ensure that: 1) the provider has an enforceable obligation to preserve data confidentiality and security, 2) the provider will notify the customer in the event of a breach or service of process requiring the production of client information, 3) Investigate the provider’s reputation, security measures, and policies, including any limitations on the provider’s liability; and 4) Determine whether the provider retains submitted information submitted before and after the discontinuation of services, or otherwise asserts proprietary rights to the information.

When it comes to client consent, the Committee noted that one way to mitigate confidentiality concerns would be to use in-house GAI tools like the legal-specific tools I referenced above, “where the use of a generative AI program does not involve the disclosure of confidential information to a third-party” in which case, “a lawyer is not required to obtain a client’s informed consent pursuant to Rule 4-1.6.” 

Next, the Committee reiterated the obligation to carefully review the output of any GAI tool, and that lawyers must ensure that all firm users are instructed to do this as well. The Committee cautioned that lawyers should not delegate work to a GAI tool that “constitute(s) the practice of law such as the negotiation of claims” nor should GAI be used to create a website intake chatbot that could inadvertently “provide legal advice, fail to immediately identify itself as a chatbot, or fail to include clear and reasonably understandable disclaimers limiting the lawyer’s obligations.”

Another key topic addressed was legal fees for GAI usage. The Committee explained that clients should be informed, preferably in writing, of the lawyer’s intent to charge a client the actual cost of using generative AI” and that lawyers can charge for the “reasonable time spent for case-specific research and drafting when using generative AI.”

Importantly, the Committee acknowledged that learning about GAI is part of a lawyer’s duty of technology competence, and explained that lawyers are obligated to develop competency in their use of new technologies like GAI, including their risks and benefits. However, clients cannot be charged for “time spent developing minimal competence in the use of generative AI.” In other words, you can’t charge clients for the cost of maintaining your ethical duty of technology competence.

The opinion also covers other ethics issues, so make sure to read it in its entirety. I don’t think certain requirements will withstand the test of time, such as the need to notify clients that you plan to use GAI. In the past, when ethics committees have required client notification as it relates to technology usage, that obligation has faded over time as the technology became commonplace. GAI will follow the same course, but it will happen much faster. 

That’s why these ethics opinions are so important: they provide lawyers with a roadmap for the ethical use of these tools. That being said, I don’t think these GAI opinions are technically necessary. Earlier opinions provide sufficient guidance for ethical technology adoption that can be easily applied to GAI. However, from a practical standpoint, these opinions serve a purpose: they provide a framework for moving forward and encourage lawyers to embrace GAI and the future that it brings. This means you have no excuse: there’s no better time than now to become familiar with GAI and its significant potential. 

Nicole Black is a Rochester, New York attorney, author, journalist, and the Head of SME and External Education at MyCase legal practice management software, an AffiniPay company. She is the nationally-recognized author of "Cloud Computing for Lawyers" (2012) and co-authors "Social Media for Lawyers: The Next Frontier" (2010), both published by the American Bar Association. She also co-authors "Criminal Law in New York," a Thomson Reuters treatise. She writes regular columns for Above the Law, ABA Journal, and The Daily Record, has authored hundreds of articles for other publications, and regularly speaks at conferences regarding the intersection of law and emerging technologies. She is an ABA Legal Rebel, and is listed on the Fastcase 50 and ABA LTRC Women in Legal Tech. She can be contacted at [email protected].


Increase your firm’s bottom line in 2024 by offering client-centric payment options

Stacked3Here is my recent Daily Record column. My past Daily Record articles can be accessed here.

*****

Increase your firm’s bottom line in 2024 by offering client-centric payment options

Most legal clients rarely plan to hire a lawyer. While we’d like to think that the need to retain an attorney is driven by a careful and premeditated decision-making process, the truth is that people don’t often seek legal counsel unless an unforeseen event forces their hand. This reality, where legal support is more a necessity than a choice, presents a unique opportunity for law firms. By implementing flexible payment options, your firm can help bridge the access to justice gap by easing the financial strain for potential clients. This strategy attracts more clients by making your firm’s services more accessible, and also directly increases your firm's revenue, laying the groundwork for a successful 2024.

There are many ways to increase both profitability and the likelihood that prospective clients will be able to retain your firm in the coming year. Understanding how other firms have successfully achieved this goal is one approach. For this type of insight, look no further than a recent Report (online: https://www.mycase.com/reports/2023-benchmark-report-getting-paid/), which provides a variety of data points that offer financial insights gleaned from law firms across the country. The anonymized data analyzed in the Report was obtained from the MyCase practice management and LawPay payment processing platforms and includes collection rates, payment timeframes, and the impact of offering legal clients payment flexibility. Using this benchmark information, you can deploy actionable strategies that will ensure a profitable year of growth for your firm.

Let’s start by considering the average invoice collection realization rate. This metric, which provides insight into the effectiveness of a law firm’s billing processes, is calculated by dividing the amount of revenue collected during a specific timeframe by the amount billed to clients and then multiplying that number by 100. The higher the invoice collection rate, the more efficient your firm’s invoice collection process.

One benchmark provided in the Report was the invoice collection rate for solo practitioners. The data showed that over the course of a year, solo practitioners billed 685,044 hours of work and invoiced $343,894,240 to clients. The total amount collected for all invoices was $158,348,081, resulting in an invoice collection realization rate of 46%. This collection rate is a useful point of comparison since it offers a benchmark that you can use when determining your firm's invoice collection goals for the coming year.

Next, let’s consider how law firms are providing payment flexibility and increasing both profitability and access to their services. According to the Report, law firms that accepted online payments had a significantly higher and faster collection rate. The recovery rate for invoices paid through online payments was 50% compared to 17% for those paid via checks or cash. Notably, firms that accepted online payments (compared to cash and checks) collected an additional 33% and received payments at least twice as fast.

Another way lawyers are making it easier for clients to retain their firm is by offering payment plans. If you are holding off on utilizing payment plans because you aren’t sure how effective they are, the Report provides insight. The data showed that the average payment plan length was 258 days, the average number of payment plan invoices and reminders sent to customers was 37, and the average collection rate was 61% of the full amount owed. You should consider this collection rate, along with the administrative lift required, when setting up a payment plan at the start of a case. Doing so will ensure that your firm is sufficiently compensated for its work throughout the life of the matter.

Finally, another flexible payment option analyzed in the Report is a legal fee loan. This payment option allows legal clients to defer paying the full amount of the legal fee upfront by working with a third-party lender. Once the loan is approved, the lawyer is paid the full fee upfront by the lender, and the client then makes regular payments to the lender. According to the Report, the average loan length was 16 months and the average loan amount was $2,592. Lastly, the data showed that lawyers received their full legal fee within three days of the loan approval.

No matter how you view the data in this Report, one thing is evident: the integration of flexible payment options isn’t just a client-friendly approach—it’s a strategic business decision that can significantly boost your firm’s bottom line. Because legal needs often arise unexpectedly, providing clients with adaptable payment methods can be a decisive factor in their choice of legal representation. By prioritizing client convenience, your firm not only stands out in a competitive market but ensures strong, long-term client relationships and sustained financial growth in 2024.

Nicole Black is a Rochester, New York attorney, author, journalist, and the Head of SME and External Education at MyCase legal practice management software, an AffiniPay company. She is the nationally-recognized author of "Cloud Computing for Lawyers" (2012) and co-authors "Social Media for Lawyers: The Next Frontier" (2010), both published by the American Bar Association. She also co-authors "Criminal Law in New York," a Thomson Reuters treatise. She writes regular columns for Above the Law, ABA Journal, and The Daily Record, has authored hundreds of articles for other publications, and regularly speaks at conferences regarding the intersection of law and emerging technologies. She is an ABA Legal Rebel, and is listed on the Fastcase 50 and ABA LTRC Women in Legal Tech. She can be contacted at [email protected].

 

 

 

 


Mastering Generative AI: Top Resources for the Tech-Savvy Lawyer

Stacked3Here is my recent Daily Record column. My past Daily Record articles can be accessed here.

*****

Mastering Generative AI: Top Resources for the Tech-Savvy Lawyer

Now that 2023 is behind us, it’s time to set the stage for success in the year to come. While the future may be uncertain, there’s one thing you can be sure of — generative AI, a cutting-edge technology that automates content creation, will be unavoidable in 2024. You will undoubtedly encounter this technology in most of the legal technology tools your firm already uses, as companies incorporate GAI into their products, much like LexisNexis, Thomson Reuters, and others in the space already have.

This technology is rapidly transforming the legal profession by streamlining workflows and reshaping how legal professionals approach their practices. In the midst of all of this change, the ethical requirement of technology competence becomes all the more important. Understanding how to effectively and responsibly incorporate GAI into your firm is essential, but obtaining accurate information can sometimes be a challenge. 

If you’re not sure where to start, the following resources can provide valuable guidance. Below, I provide a number of different resources that will help you get up to speed and prepare you for the year ahead.

At the outset, don’t overlook this column. My articles regularly cover legal technology issues, including the impact of GAI on the legal profession. My other legal technology columns at Above the Law and ABA Journal are also good resources for GAI education, as are the many other legal technology articles written for these publications. (Online: https://www.abajournal.com/authors/64800 and   https://abovethelaw.com/author/nicoleblack/)

For a basic primer on GAI for lawyers, make sure to check out the recording of my recent presentation, “Unleashing Legal AI: ChatGPT in Practice.” (Online: https://www.mycase.com/webinars/unleashing-legal-ai-chat-gpt-in-practice/). In it, I provide an introduction to the concept of GAI, explain how it will impact the practice of law, and discuss ethical implications, along with accuracy and bias issues. 

Another resource that helps to track GAI developments in the legal space is Legaltech News, which provides a running digest of GAI news and developments in our industry. (Online: https://www.law.com/legaltechnews/2023/12/20/tracking-generative-ai-how-evolving-ai-models-are-impacting-legal/).

For in-depth GAI analysis and insight, make sure to attend an upcoming legal technology conference. Many of this year’s conferences have entire tracks devoted to learning about and understanding the impact of GAI on the legal profession. There are two key conferences occurring during the first quarter of the year that are worth considering: Legalweek 2024 in New York City later this month and ABA TECHSHOW in Chicago next month. (Online: https://www.event.law.com/legalweek and https://www.techshow.com/).

Another option is Bob Ambrogi’s Legaltech Week webcast, which consists of a panel of legal technology journalists  (of which I am one) who discuss the week’s legal technology news at 3 pm ET every Friday. (Online: https://www.lawnext.com/category/legaltech-week). GAI made headlines last year and will continue to be a topic of conversation throughout 2024, so this webcast is a great way to stay on top of GAI trends. If you’re not able to attend the live webcast, you can watch weekly recordings on YouTube. (Online: https://www.youtube.com/@legaltechweek).

Finally, LinkedIn is a great resource for legaltech news. In recent years, this social network has evolved from a fairly static site that consisted mainly of online resumes and tools for job seekers into a vibrant network for professionals seeking to connect with their colleagues and learn more about their industry. If you follow a few legaltech journalists, experts, and educators, you’ll find that their regular updates provide a wealth of information on GAI, from news to how to use it in your practice.

As you prepare for a successful 2024, understanding GAI and how to strategically use it in your firm will be essential. The resources discussed above provide a starting point that will assist you in implementing it in your practice both efficiently and ethically. Not only will embracing these tools increase your firm’s productivity and competitiveness, but they will also enhance your capacity to serve clients effectively and affordably in an increasingly digital world.

Nicole Black is a Rochester, New York attorney, author, journalist, and the Head of SME and External Education at MyCase legal practice management software, an AffiniPay company. She is the nationally-recognized author of "Cloud Computing for Lawyers" (2012) and co-authors "Social Media for Lawyers: The Next Frontier" (2010), both published by the American Bar Association. She also co-authors "Criminal Law in New York," a Thomson Reuters treatise. She writes regular columns for Above the Law, ABA Journal, and The Daily Record, has authored hundreds of articles for other publications, and regularly speaks at conferences regarding the intersection of law and emerging technologies. She is an ABA Legal Rebel, and is listed on the Fastcase 50 and ABA LTRC Women in Legal Tech. She can be contacted at [email protected].


LegalTech Trends: 2023 Recap and 2024 Forecast

Stacked3Here is my recent Daily Record column. My past Daily Record articles can be accessed here.

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LegalTech Trends: 2023 Recap and 2024 Forecast

When I think about the last few years, this Grateful Dead lyric immediately comes to mind: What a long, strange trip it’s been. It’s been quite a year! The one word that accurately summarizes the events of the past few years is “unpredictable.”

In December 2019, a global pandemic and the groundbreaking release of generative AI were not on my Bingo cards for the 2020s predictions. Increased cloud usage, tumultuous politics, and maybe a new social media platform - those would have been reasonable predictions. Instead, as 2023 draws to a close, we’re entering strange new territory.

The full-fledged pandemic seems to be behind us, but its impact continues to be felt. Its long-term effects on our collective health are as yet unknown. What is known is that it ushered in an age of accelerated technology adoption. Lawyers and judges, whom I never imagined embracing technology, are now happily using Zoom, with iPads in hand and smartwatches on their wrists.

The pandemic primed lawyers to be receptive and curious about new technology, and what perfect timing! As we emerged from the cocoons of our homes and returned to the office, in some cases on a hybrid basis, hoping for a return to a semblance of normalcy, a new technology was unleashed.

Generative artificial intelligence (AI) tools like ChatGPT made headlines in early 2023, with analysts predicting the legal profession as one of the most likely areas to be impacted by this new technology. Many lawyers immediately understood its benefits and experimented with generative AI, with some ignoring competency requirements, to their detriment.

In the second half of the year, leading legal technology companies like LexisNexis and Thomson Reuters announced the rollout of this technology across their platforms, and nearly one hundred other companies released beta generative AI tools, with many others in the works. Just a year after the public release of OpenAI’s ChatGPT 3.5, this technology is familiar to lawyers and is increasingly being used by them as trusted legal
technology providers throw their hats into the ring.

In fact, according to MyCase and LawPay’s soon-to-be-published 2024 Legal Industry Report, 27% of the more than 2600 legal professionals surveyed have used generative AI for work-related purposes.

Think about that: in just one year, nearly one-third of legal professionals are already using this nascent technology.

I never would have predicted this high rate of adoption of a new technology in 2019 - or even in late 2022. For that reason, I’m hesitant to throw my hat in the ring with predictions for 2024. I used to be confident in my legal technology predictions, but no more. The unpredictability of recent events has shaken my confidence!

Even so, I’ll give it a shot. I predict that in 2024 the vast majority of legal technology software providers will publicly release generative AI tools into their products, and by the end of 2024, more than 60% of legal professionals will be using it as part of their
workflows.

As Baby Boomers retire, technology adoption in law firms will increase across the board. E-filing will continue to gain traction and the number of law offices with paperless workflows in place will increase as well. Online document storage and cloud-based legal software such as law practice management platforms will become the norm over the next year or two, as more firms’ operations become cloud-firs. Finally, Flexible payment options for legal services, including payment plans and pay later options, where a third party provides legal clients with loans for legal fees, will increase as legal consumers demand more convenient ways to pay for legal services.

The start of the 2020s was tumultuous and full of change. I expect that over the next few years, the pace of advancements won’t slow down, but lawyers are more prepared than they’ve ever been to acclimate and adjust as needed. Let’s hope that the levels of unpredictability decrease, however. We’ve had enough instability to last us for the next decade, so here’s to smooth sailing ahead in 2024! Cheers, and see you on the other side!

Nicole Black is a Rochester, New York attorney, author, journalist, and the Head of SME and External Education at MyCase legal practice management software, an AffiniPay company. She is the nationally-recognized author of "Cloud Computing for Lawyers" (2012) and co-authors "Social Media for Lawyers: The Next Frontier" (2010), both published by the American Bar Association. She also co-authors "Criminal Law in New York," a Thomson Reuters treatise. She writes regular columns for Above the Law, ABA Journal, and The Daily Record, has authored hundreds of articles for other publications, and regularly speaks at conferences regarding the intersection of law and emerging technologies. She is an ABA Legal Rebel, and is listed on the Fastcase 50 and ABA LTRC Women in Legal Tech. She can be contacted at [email protected].