Category: News Feeds

In


Season
9,
Episode
2
of
“Notes
to
My
(Legal)
Self,”

I
welcomed
back
Damien
Riehl,
an
industry
leader
with
a
wealth
of
expertise
spanning
data
science,
large
language
models
(LLMs),
and
legal
standards.
This
conversation
dives
into
one
of
the
most
pressing
questions
of
the
digital
age:
How
will
lawyers
make
money
in
a
world
transformed
by
AI?

The
Billable
Hour
And
The
Evolution
Of
Value

Damien
began
by
framing
the
current
landscape:
The
traditional
billable
hour
still
dominates
legal
billing,
making
up
85%
of
revenues
for
many
firms.
But
the
rise
of
LLMs,
capable
of
completing
tasks
in
minutes
that
once
took
hours,
is
shaking
this
model
to
its
core.

Damien
outlined
two
potential
futures:

1. 
   The
   Status
   Quo.
   
   Lawyers
   use
   AI
   tools
   to
   answer
   more
   questions
   in
   the
   same
   amount
   of
   time,
   offering
   clients
   more
   comprehensive
   service
   while
   maintaining
   billable
   hours.
2. 
   A
   New
   Paradigm.
   
   Clients
   demand
   flat
   fees
   and
   in-house
   teams
   leverage
   AI
   to
   handle
   simpler
   tasks,
   pushing
   firms
   to
   redefine
   their
   value
   proposition.

Expanding
The
Market:
Serving
The
Underserved

While
lawyers
often
lament
the
risks
posed
by
LLMs,
Damien
emphasized
the
immense
latent
market
AI
can
unlock.
Today,
80%
to
90%
of
legal
needs
go
unmet,
leaving
middle-
and
lower-income
clients
without
access
to
justice.
LLMs
can
help
bridge
this
gap
by
enabling
firms
to
serve
these
clients
profitably.

“We
need
to
stop
seeing
underserved
markets
as
charity
cases,”
Damien
argued.
“These
are
opportunities
to
scale
our
impact
and
grow
our
businesses.”

By
automating
routine
work,
lawyers
can
serve
more
clients
at
lower
costs
—
tapping
into
a
vast,
underserved
market
that
includes
individuals,
small
businesses,
and
even
underrepresented
industries.

The
Future
Of
Pricing:
More
Than
The
Billable
Hour

Damien
explored
alternative
pricing
models,
including:

• 
  Flat
  Fees.
  
  By
  reducing
  costs
  through
  automation,
  firms
  can
  offer
  competitive
  flat
  fees
  while
  preserving
  or
  even
  increasing
  profit
  margins.
• 
  Value-Based
  Pricing.
  
  Lawyers
  could
  align
  fees
  with
  the
  impact
  they
  create,
  such
  as
  a
  percentage
  of
  a
  client’s
  savings
  or
  added
  value.
  While
  this
  model
  is
  promising,
  ethical
  and
  regulatory
  hurdles
  remain.
• 
  Hybrid
  Models.
  
  For
  unpredictable
  or
  complex
  cases,
  firms
  may
  still
  rely
  on
  billable
  hours
  alongside
  alternative
  models.

These
shifts
require
a
fundamental
rethinking
of
how
lawyers
define,
measure,
and
deliver
value.

Navigating
Ethical
And
Regulatory
Challenges

The
conversation
turned
to
ethics
and
regulation,
particularly
around
LLMs
and
the
unauthorized
practice
of
law
(UPL).
Damien
highlighted
three
key
points:

1. 
   Reasonable
   Fees.
   
   Lawyers
   must
   balance
   efficiency
   with
   fairness.
   Charging
   10
   hours
   for
   a
   task
   that
   takes
   AI
   two
   minutes
   may
   no
   longer
   meet
   the
   ethical
   standard
   of
   reasonableness.
2. 
   Confidentiality.
   
   Firms
   must
   ensure
   that
   client
   data
   remains
   secure,
   even
   when
   using
   third-party
   AI
   tools.
3. 
   UPL
   And
   AI.
   
   Tools
   like
   ChatGPT
   and
   Google’s
   Gemini
   can
   draft
   legal
   documents,
   raising
   questions
   about
   whether
   AI
   constitutes
   unauthorized
   practice.

Damien
noted
that
regulators
face
an
uphill
battle
in
enforcing
UPL
laws
against
tech
giants
like
Google
and
Microsoft.
Smaller
legal
tech
companies,
however,
may
bear
the
brunt
of
these
disputes.

Opportunities
For
Lawyers:
5
Doors
To
Success

Damien
outlined
five
pathways
lawyers
can
take
to
thrive
in
the
age
of
AI:

1. 
   Leverage
   AI
   For
   Efficiency.
   
   Use
   LLMs
   to
   complete
   more
   work
   in
   less
   time,
   offering
   greater
   value
   to
   clients.
2. 
   Adopt
   Flat
   Fees.
   
   Lower
   costs
   through
   automation
   and
   compete
   effectively
   with
   in-house
   teams.
3. 
   Expand
   Down-Market.
   
   Serve
   middle-
   and
   lower-income
   clients
   who
   have
   historically
   been
   priced
   out
   of
   legal
   services.
4. 
   Go
   Up-Market.
   
   Meet
   the
   growing
   demand
   from
   heavily
   regulated
   industries
   like
   automotive
   and
   finance.
5. 
   Develop
   Technology.
   
   Create
   AI-driven
   tools
   to
   empower
   lawyers
   and
   clients.

What
About
The
Regulators?

Damien
predicted
that
bar
associations,
constrained
by
shrinking
membership
and
limited
resources,
may
struggle
to
enforce
strict
UPL
rules
against
major
tech
players.
Meanwhile,
cases
like


UpSolve

—
which
challenges
UPL
statutes
on
First
Amendment
grounds
—
could
pave
the
way
for
more
liberal
interpretations
of
what
constitutes
legal
practice.

However,
he
cautioned
against
relying
on
regulatory
inertia.
Lawyers
should
focus
on
adapting
their
practices
to
serve
a
broader
market,
rather
than
resisting
inevitable
changes.

Final
Thoughts

As
the
conversation
drew
to
a
close,
Damien
issued
a
challenge
to
the
legal
profession:

“If
we’re
not
serving
80%
to
90%
of
the
population,
we’re
failing.
AI
isn’t
the
enemy
—
it’s
the
tool
we
need
to
scale
our
impact
and
fulfill
our
ethical
obligations.”

The
rise
of
LLMs
is
less
a
threat
to
lawyers
and
more
a
wake-up
call.
By
embracing
new
technologies,
exploring
alternative
pricing
models,
and
serving
untapped
markets,
lawyers
can
not
only
maintain
their
standard
of
living
but
also
expand
access
to
justice.

The
future
of
law
is
about
choice:
Which
door
will
you
walk
through?

Olga
V.
Mack


is
a
Fellow
at
CodeX,
The
Stanford
Center
for
Legal
Informatics,
and
a
Generative
AI
Editor
at
law.MIT.
Olga
embraces
legal
innovation
and
had
dedicated
her
career
to
improving
and
shaping
the
future
of
law.
She
is
convinced
that
the
legal
profession
will
emerge
even
stronger,
more
resilient,
and
more
inclusive
than
before
by
embracing
technology.
Olga
is
also
an
award-winning
general
counsel,
operations
professional,
startup
advisor,
public
speaker,
adjunct
professor,
and
entrepreneur.
She
authored Get
on
Board:
Earning
Your
Ticket
to
a
Corporate
Board
Seat, Fundamentals
of
Smart
Contract
Security,
and  Blockchain
Value:
Transforming
Business
Models,
Society,
and
Communities. She
is
working
on
three
books:


Visual
IQ
for
Lawyers
(ABA
2024), The
Rise
of
Product
Lawyers:
An
Analytical
Framework
to
Systematically
Advise
Your
Clients
Throughout
the
Product
Lifecycle
(Globe
Law
and
Business
2024),
and
Legal
Operations
in
the
Age
of
AI
and
Data
(Globe
Law
and
Business
2024).
You
can
follow
Olga
on



LinkedIn


and
Twitter
@olgavmack.

The
pressure
against
pharmacy
benefit
managers
(PBMs)
continues
to
build.

On
Tuesday,
the
Federal
Trade
Commission
(FTC)
released
its

second
interim
staff
report
on
prescription
drug
middlemen.
The
report
examines
the
impact
of
PBMs
(specifically
CVS
Caremark,
Express
Scripts
and
Optum
Rx)
on
specialty
generic
drugs,
highlighting
substantial
price
markups
by
PBMs
on
medications
for
cancer,
HIV
and
other
conditions.
The
commission
voted
5-0
to
release
the
report.

“The
FTC
staff’s
second
interim
report
finds
that
the
three
major
pharmacy
benefit
managers
hiked
costs
for
a
wide
range
of
lifesaving
drugs,
including
medications
to
treat
heart
disease
and
cancer,”
said
FTC
Chair
Lina
M.
Khan
in
a
statement.
“The
FTC
should
keep
using
its
tools
to
investigate
practices
that
may
inflate
drug
costs,
squeeze
independent
pharmacies,
and
deprive
Americans
of
affordable,
accessible
healthcare
—
and
should
act
swiftly
to
stop
any
illegal
conduct.”

The
new
report
is
the
latest
development
in
a
battle
that
has
been
brewing
between
the
FTC
and
the
PBMs.
The
agency
released
its

first
interim
staff
report
on
PBMs
in
July,
which
detailed
how
concentrated
the
PBM
market
has
become.
In
addition,
the
FTC

sued
CVS
Caremark,
Express
Scripts
and
Optum
Rx
over
insulin
prices
in
September,
prompting
the
Big
Three
PBMs
to

countersue
the
agency
in
November,
claiming
the
agency’s
lawsuit
is
unconstitutional.  

While
several
healthcare
executives
are
coming
out
in
support
of
the
report,
the
PBMs
named
in
the
report
are
unsurprisingly
decrying
its
findings.

What
the
FTC
found

In
the
second
interim
report,
the
FTC
examined
specialty
generic
drugs
dispensed
between
2017
and
2022
for
members
of
commercial
health
plans
and
Medicare
Part
D
prescription
drug
plans
managed
by
the
Big
Three
PBMs.
This
differs
from
the
previous
report,
which
analyzed
two
specialty
generic
drugs.

The
FTC
found
that
the
top
three
PBMs
applied
markups
ranging
from
hundreds
to
thousands
of
percent
on
various
specialty
generic
drugs
dispensed
through
their
affiliated
pharmacies,
including
medications
for
cancer
and
HIV.
The
PBMs
also
reimbursed
their
affiliated
pharmacies
at
higher
rates
than
they
paid
to
unaffiliated
pharmacies
for
nearly
every
specialty
generic
drug
reviewed.

During
the
study
period,
the
affiliated
pharmacies
of
the
Big
Three
PBMs
earned
more
than
$7.3
billion
in
dispensing
revenue
above
their
estimated
acquisition
cost,
as
determined
by
the
National
Average
Drug
Acquisition
Cost
(NADAC),
on
specialty
generic
drugs,
the
FTC
also
reported.

In
addition,
the
three
PBMs
earned
about
$1.4
billion
of
income
from
spread
pricing
on
the
specialty
generic
drugs
analyzed
in
the
report
during
the
study
period.
Spread
pricing
is
when
PBMs
bill
their
plan
sponsor
clients
more
than
what
they
reimburse
pharmacies
for
prescription
drugs.

“These
results
illustrate
the
increasing
financial
importance
of
specialty
generic
drugs
to
the
Big
3
PBMs,
as
well
as
to
plan
sponsors
and
patients,”
the
FTC
stated
in
the
report.
“The
results
also
reveal
that
the
two
case
study
drugs
analyzed
in
our
First
Interim
Staff
Report
were
not
isolated
examples.
This
report
confirms
that
the
Big
3
PBMs
impose
significant
markups
on
a
wide
array
of
specialty
generic
drugs.”

The
response

The
Big
Three
PBMs
have
largely
criticized
the
FTC
report.

A
spokesperson
for
CVS
Health
argued
that
the
FTC
has
drawn
broad
conclusions
from
“cherry-picked”
specialty
generic
outliers
in
both
of
its
interim
reports.

“Between
2017-2022,
specialty
generic
products
have
represented
less
than
1.5%
of
our
clients’
total
drug
spend
and
only
51
out
of
thousands
of
drugs,”
said
David
Whitrap,
vice
president
of
external
affairs
at
CVS
Health,
in
an
email.
“In
contrast,
branded
specialty
products
represent
more
than
50%
of
our
clients’
total
drug
spend
and
are
entirely
ignored
by
the
FTC.”

Express
Scripts,
meanwhile,
declared
in
a
statement
that
“nothing
in
the
FTC’s
report
addresses
the
underlying
cause
of
increasing
drug
prices,
or
helps
employers,
unions,
and
municipalities
keep
prescription
benefits
affordable
for
their
members.”

An
Optum
spokesperson
told
MedCity
News
that
the
company
is
still
reviewing
the
report,
but
pointed
to
work
it
is
doing
to
decrease
drug
prices.

“Optum
is
lowering
the
cost
of
specialty
medications,
which
comprises
half
of
all
drug
expenditures,
and
providing
clinical
expertise,
programs
and
support
for
patients
with
complex
and
rare
conditions,”
the
spokesperson
said.
“In
2024,
we
helped
eligible
patients
save
$1.3
billion
and
the
median
out-of-pocket
payment
for
these
patients
was
$5.”

While
the
PBMs
are
strongly
criticizing
the
findings
of
the
report,
one
industry
expert
—
Antonio
Ciaccia,
CEO
of
46booklyn
—
said
he’s
glad
not
to
be
the
only
one
working
to
expose
PBM
practices.
He
said
he
launched
46brooklyn
in
2018
with
an
exposé
on
how
Medicaid
programs
were
being
overcharged
for
generic
Gleevec,
one
of
the
drugs
mentioned
in
the
report. 

“We
were
told
by
PBMs
that
our
focus
on
this
drug
was
an
exercise
in
cherry
picking.
Since
then,
we
have
identified
a
litany
of
other
examples
of
these
exorbitant
markups
on
generic
specialty
drugs
and
how
PBM
conflicts
of
interest
in
the
specialty
pharmacy
market
have
resulted
in
excessive
charges
to
employers,
Medicare,
and
patients,”
he
said.
“I’d
love
to
say
I’m
surprised
by
the
findings,
but
I’m
not.
I’m
just
happy
to
no
longer
feel
like
I’m
alone
in
identifying
these
unfortunate
realities.”

Ellen
Rudolph,
CEO
of
autoimmune
digital
health
company
WellTheory,
noted
that
the
FTC’s
findings
“underscore
a
critical
issue
in
our
healthcare
system:
the
significant
markups
on
specialty
drugs
not
only
strain
patients
but
also
create
substantial
financial
burdens
for
employers.”

Another
healthcare
executive
called
on
policymakers
to
step
up
based
on
the
findings
of
the
report.

“Patients
would
be
well
served
if
these
so-called
specialty
drugs
were
able
to
be
dispensed
by
their
preferred
community
pharmacy,”
said
Douglas
Hoey,
CEO
of
the
National
Community
Pharmacists
Association.
“Instead,
however,
for
the
PBMs’
financial
gain,
patients’
choice
is
oftentimes
limited
to
PBM-owned
mail-order
pharmacies
and
their
care
is
unfortunately
disrupted.
This
is
just
the
latest
obvious
signal
to
policymakers
that
they
must
pass
PBM
reform
that
would
include
paying
for
prescriptions
based
on
the
cost
of
the
drug
plus
a
transparent
pharmacist
professional
dispensing
fee.”

Photo:
z_wei,
Getty
Images

When
it
comes
to
finding
precedent
deal
data
and
what’s
market,
transactional
lawyers
are
frustrated.

It
often
takes
in
excess
of
6-8
hours
to
find
a
precedent
deal
and
identify
relevant
deal
points
from
firm
documents.
And,
even
then,
lawyers
may
not
feel
they
are
getting
a
complete
picture
of
the
data.

Now
multiply
these
hours
exponentially
when all recent
precedent
deal
points
are
needed
as
a
reference
for
drafting
and
negotiation.

For
many
lawyers,
the
process
is
further
frustrated
by
the
number
of
steps
—
and
people
—
required
for
manual
deal
data
extraction.

When
a
new
deal
comes
in,
or
a
client
is
in
immediate
need
of
critical
information,
lawyers
start
the
hunt.
Often,
details
can’t
be
found
quickly,
and
others
are
engaged.
An
urgent
email
goes
out
looking
for
help.

From
accounting
to
knowledge
management
to
business
development,
professionals
across
the
firm
drop
everything
to
help
with
the
search.
Other
priorities
are
put
on
hold
as
the
team
scrambles
to
assemble
the
information,
often
from
various
sources,
all
while
the
client
waits.
The
team
puts
together
the
best
information
they
can
find
and
hopes
it
will
be
enough. 
  

Regardless
of
the
outcome,
this
is
not
an
ideal
process.

Enter
Litera’s
new
solution
for
transactional
lawyers
and
knowledge
management
teams: Foundation
Dragon.

This
easy-to-use
platform
helps
lawyers
instantly
answer
complex
questions
by
using
GenAI
to
extract
deal
points
from
firm
deal
documents
and
pairing
it
with
matter
experience
data
to
quickly
and
accurately
get
you
the
answers
you
need,
when
you
need
them.

That
6-8
hours
it
can
take
an
associate
to
pull
deal
points
from
just
one
deal?
It’s
now
cut
down
to
minutes.

Furthermore, all of
your
firm’s
deals
are
in
one
searchable
place,
so
finding
the
most
relevant
precedent
deals
and
their
deal
points
for
comparison
is
simple
for
any
attorney
to
find
—
no
staff
needed.

The
tool
verifies
data
with
minimal
human
input,
ensuring
the
highest
standard
of
accuracy
while
still
being
simple
and
intuitive.

Getting
Started

Lawyers
typically
lack
the
time
to
learn
a
complex
new
system,
and
ease
of
onboarding
is
a
key
goal
for
any
legal
technology
tool.

Foundation
Dragon
is
intuitive
and
easy
to
use.

When
a
deal
closes,
simply
upload
the
closing
documents
to
Dragon,
select
the
appropriate
deal
type
and
Dragon
will
extract
and
load
the
deal
data
from
the
documents
into
the
system
quickly
and
easily.

To
help
get
a
new
system
off
the
ground,
Litera
also
offers
a
service
to
pre-populate
Foundation
Dragon
with
all
of
a
firm’s
historical
data.

Contrast
this
process
with
that
of
many
law
firms,
which
collect
experience
data
by
circulating
a
blank
survey
form
to
a
transaction
team.

The
latter
approach
requires
lawyers’
time
and
effort
to
fill
a
blank
page
—
and
often
achieves
mixed
results
in
collecting
usable
data.

With
Foundation
Dragon,
the
system
will
automatically
extract
nearly
300
deal
points
for
an
M&A
transaction
within
minutes
of
a
document
upload,
and
the
commercial
real
estate
acquisition
version
of
Foundation
Dragon
extracting
over
90
deal
points.
Foundation
Dragon
now
supports
several
new
document
types,
including
commercial
real
estate
leases,
credit
agreements,
limited
partnership
agreements,
and
NDAs,
with
plans
to
introduce
more
in
the
coming
year.

The
system
then
delivers
a
populated
dashboard
of
all
the
deal
points
that
have
been
extracted.

Instead
of
a
blank
survey,
a
transaction
team
receives
a
pre-existing
draft.
They
only
need
to
verify
the
accuracy
of
the
deal
point,
and
the
process
for
doing
so
is
intuitive.

A
click
on
a
deal
point
value
automatically
brings
up
the
relevant
portion
of
the
underlying
document.
With
one
click
of
the
button,
the
deal
point
can
then
be
marked
“verified”
in
the
system
or,
on
rare
occasions,
edited
to
the
correct
figure.

This
creates
a
workflow
where,
after
the
closing
of
a
deal,
an
attorney
who
worked
on
the
matter
can
verify
all
of
the
deal
points
in
a
matter
of
minutes.

The
extracted
deal
points
will
then
be
accessible
to
all
lawyers,
be
included
in
aggregate
metrics,
and
be
available
for
marketing
and
business
development
efforts. Foundation
Dragon’s
insights
become
even
more
impactful
when
combined
with
Litera’s
experience
management
solution,
Foundation,
as
it
allows
you
to
push
the
extracted
deal
data
over
to
Foundation’s
matter
profiles.
This
means
firms
can
reap
the
benefits
of
automatically
populating
enhanced
deal
profiles
in
Foundation
with
minimal
effort.

Accessing
Your
Insights

Once
your
deals
have
been
uploaded
into
the
system,
your
users
can
put
the
data
to
work
through
an
efficient,
user-friendly
interface
that
displays
all
of
the
metrics
that
have
been
collected.

One
view,
called
“market,”
contains
all
of
the
deal
points
as
aggregate
metrics,
based
on
every
deal
the
firm
has
uploaded.

The
resulting
dashboard
allows
you
to
instantly
answer
the
question
of
“what’s
market?”
for
any
of
the
deal
points
the
system
collects.

Looking
for
insights
based
on
a
specific
matter
or
group
of
matters?
A
few
clicks
narrow
the
data
points
down
to
that
subset.

Each
deal
point
here
represents
the
type
of
data
that
would
often
have
to
be
found
by
having
a
knowledgeable
professional
comb
a
200-page
document
for
hours
on
end.

A
group
of
up
to
five
deals
can
be
compared,
and
the
data
can
be
directly
exported
to
Excel.

The
simplicity
of
the
design
is
particularly
helpful
when
comparing
deals.

Here,
all
of
the
deal
points
being
compared
are
laid
out
right
next
to
each
other
for
easy
visualization.

From
document
upload
to
data
visualization,
Foundation
Dragon
provides
a
simple,
intuitive
process
that
requires
minimal
onboarding
while
delivering
impactful
insights
that
save
lawyers
time
and
a
client
billable
hours.

Putting
Data
to
Work

For
the
legal
industry,
manually
curating
data
from
transactions
has
long
been
a
time-consuming
task
requiring
skilled
practitioners
and
delivering
mixed
results.

Some
firms
have
devoted
decades
to
creating
a
bespoke,
reasonably
efficient
process.
These
firms
have
distinct
advantages
in
accessing
data-driven
insights
from
precedential
deals
when
negotiating
transactions
and
advising
their
clients.

Firms
that
lack
such
a
system
often
rely
on
“reply
all”
emails
and
firmwide
fire
drills
instead
—
a
process
that
needlessly
consumes
resources
and
delivers
inferior
results.

As
Foundation
Dragon
shows,
this
is
a
situation
that
can
be
effectively
addressed
by
generative
AI.

Foundation
Dragon
offers
elite
data
tracking
and
reporting
to
all
transactional
lawyers
—
with
only
minimal
effort
on
the
lawyers’
part
to
get
it
up
and
running.
Dragon
gives
lawyers
the
ability
to
negotiate
from
a
position
of
strength
and
deliver
unparalleled
client
outcomes.

*
Counsel
feeling
pinch
as
non-equity
partner
tier
grows.
[American
Lawyer]

*
A
crypto
business
breaking
the
law?
No
way!
[Law360]

*
What
do
we
know
about
online
law
schools.
[ABA
Journal]

*
North
Carolina
GOP
effort
to
toss
60,000
votes
to
win
a
state
supreme
court
seat
they
have
lost
on
multiple
recounts
includes
some
“surreal”
challenges.
[WRAL]

*
Supreme
Court
makes
wage
theft
just
that
little
bit
easier.
[Reuters]

*
Remote
control
trains
trouble
unions
who’ve
already
been
sidelined
by
billion
dollar
transportation
companies
running
skeleton
crews
on
ridiculously
long
shifts.
But,
hey,
what
can
go
wrong
with
an
out-of-control
train?
[Bloomberg
Law
News]

Ed.
Note:
Welcome
to
our
daily
feature

Trivia
Question
of
the
Day!

According
to
Firm
Prospects’
2024
Am
Law
200
Lateral
Hiring
Report,
which
firm
hired
the
most
laterals
in
2024?

Hint:
The
firm
hired
a
total
of
448
laterals
last
year.

See
the
answer
on
the
next
page.

I
live
not
too
far
away
from
the
Eaton
fire
which,
as
of
Tuesday
night,
is
35%
contained.
When
the
fire
started
last
week
due
to
high
winds,
the
surrounding
area
(which
includes
where
I
live)
had
its
power
shut
off
for
up
to
48
hours.
Not
only
that,
the
ash
from
the
fire
was
visible
in
the
air
and
turned
the
streets
into
ashtrays.
The
air
quality
was
so
bad
that
many
residents
voluntarily
evacuated
to
other
cities.

Eventually,
the
multiple
fires
in
Los
Angeles
County
will
be
contained.
But
the
damage
has
been
done,
and
the
current
estimated
cost
of

$250
billion
is
likely
to
rise.

Many
would
expect
that
insurance
would
cover
the
losses.
But
some
insurance
companies
have
either
dropped
their
fire
insurance
coverage
in
California
or
stopped
accepting
new
applications.
This
means
that
some
homeowners
had
to
turn
to
the
state’s
last-resort
insurance
coverage,
which
is
more
expensive
and
provides
less
coverage.
Others
had
no
insurance,
which
means
they
will
be
out
of
luck,
which
is
particularly
painful
for
those
who
owned
multimillion-dollar
houses.

But
the
majority
who
have
insurance
will
file
claims
with
their
insurers.
Given
the
size
of
the
damages
and
recent
efforts
by
insurance
companies
to
stop
accepting
new
clients
in
California,
it
may
make
people
wonder
how
they
will
handle
the
large
number
of
claims.

California
has
been
undergoing
an
insurance
crisis
for
the
past
few
years.
Since
2022,
several
major
insurance
companies,
including

State
Farm,

Allstate,
and

Farmers,
have
stopped
or
limited
new
fire
insurance
applications
in
California,
particularly
in
fire-prone
areas.
They
cite
various
reasons,
including
climate
change,
rising
labor
and
material
costs
as
a
result
of
inflation,
and
the
payouts
made
due
to
the
2017
and
2018
wildfires.

Also,
California
has
strict
laws
which
limit
how
much
insurance
companies
can
charge
for
premiums.

Proposition
103
requires
insurance
companies
to
obtain
approval
before
implementing
a
premium
rate
increase.
While
this
was
designed
to
protect
consumers
from
arbitrary
rate
increases
and
has
kept
premiums
low,
this
has
also
resulted
in
stricter
underwriting
requirements,
and
the
termination
of
new
applications
mentioned
earlier.

Furthermore,
Senate
Bill
824
prohibits
insurance
companies
from
canceling
insurance
policies
for
up
to
one
year
after
a
state
of
emergency
has
been
declared.
Indeed,
Insurance
Commissioner
Ricardo
Lara
used
this
to

declare
a
moratorium
on
cancellations
as
a
result
of
the
recent
wildfires.

But
in
2023,
in
an
effort
to
bring
insurance
companies
back,
the
California
Department
of
Insurance
implemented
a

major
regulatory
overhaul.
This
would
allow
insurance
companies
to
use
wildfire
catastrophe
modeling
to
set
rates
and
allow
them
to
pass
on
some
of
the
costs
of
reinsurance
to
customers.
This
generally
means
substantially
higher
premiums
in
exchange
for
accepting
new
insurance
applications
and
continuing
existing
coverage.

It’s
hard
to
be
an
insurance
company
in
California.
Rate
increases
must
be
approved
by
the
insurance
commissioner.
Since
the
commissioner
is
directly
elected
by
the
voters,
a
huge,
arbitrary
rate
increase
could
result
in
the
commissioner
being
unelectable
in
the
future,
or
—
worse
—
being
recalled.
If
insurance
companies
can’t
bring
in
the
enough
premium
revenue
to
pay
out
claims
and
maintain
operations,
why
bother
operating?

Some
may
ask,
why
doesn’t
the
state
become
an
insurer?
It
could
expand
its
current
FAIR
program
to
cover
more
people
and
make
it
affordable.
Since
the
state
may
have
less
of
a
profit
motive
than
the
private
sector,
wouldn’t
they
be
trusted
to
pay
claims
fairly
and
quickly?

While
that
sounds
nice,
it
hasn’t
worked
out
that
way.
Not
only
is
the
state’s
FAIR
program
a
“last
resort”
policy,
the
insurance
commissioner
is
trying
to
bring
private
insurers
back
to
the
table.
For
reasons
only
the
commissioner
and
legislators
know,
the
state
does
not
want
to
get
too
deep
in
insurance.
Maybe
it
is
too
much
work.
Maybe
taxpayers
and
voters
in
modest
and
less
disaster-prone
areas
would
be
angry
to
see
their
tax
bills
go
up
so
that
their
celebrity
and
business-titan
neighbors
in
the
Pacific
Palisades
can
get
their
seven-
or
eight-figure
casualty
claims
paid.

And
then
there
is
the
matter
of
addressing
the
insurance
companies’
grievances
or,
as
some
of
them
have
done,
they
will
simply
stop
taking
new
customers
and
slowly
exit
the
California
market.
Premiums
will
have
to
increase
to
account
for
inflation
and
to
pay
laborers
fairly,
but
a
system
should
be
set
up
to
increase
premiums
gradually
so
customers
will
not
suffer
sticker
shock.

But
there
is
the
matter
of
climate
change,
which
only
Mother
Nature
can
fully
control.
It
is
also
a
controversial
topic
with
its
fair
share
of
skeptics.
But
at
least
insurance
companies
acknowledge
its
existence
and
its
impact
on
the
environment
and
its
customers.
That
can
be
a
common-ground
starting
point
for
discussing
how
all
stakeholders
can
do
their
part
to
improve
everyone’s
financial
bottom
line.

The
recent
California
fires
have
unfortunately
displaced
a
lot
of
people
from
all
tax
brackets.
In
the
near
future,
we
will
see
how
insurance
companies
treat
their
customers
who
were
impacted.
It
is
a
complicated
business
but
in
light
of
a

recent
tragedy,
doing
the
right
thing
can
greatly
improve
the
companies’
public
images
and
make
customers
feel
slightly
better
about
paying
a
higher
premium.

Steven
Chung
is
a
tax
attorney
in
Los
Angeles,
California.
He
helps
people
with
basic
tax
planning
and
resolve
tax
disputes.
He
is
also
sympathetic
to
people
with
large
student
loans.
He
can
be
reached
via
email
at




[email protected].
Or
you
can
connect
with
him
on
Twitter
(@stevenchung)
and
connect
with
him
on LinkedIn.

Well,
it’s
a
wrap
for


CES
2025.
Five
and
a
half
days
of
keynotes,
educational
sessions,
walking
exhibit
floors,
networking,
and,
well,
partying
have
come
to
an
end.
I’m
pooped.

I
covered
the
show
for
Above
the
Law
last
week
and
have
been
posting


my
opinions

about
what
I
have
seen
and,
most
importantly,
how
what
I
have
seen
impacts
the
law. 

The
Top
10

Now
that
I
have
returned
to
reality
and
had
a
chance
to
catch
my
breath,
here
are
my
top
10
overall
impressions
—
both
legal-related
and
general.

1.
First,
the
numbers:
The
final
statistics,
courtesy
of


CES,
are
themselves
pretty
staggering.
4500+
exhibitors
and
141K+
attendees,
including
6K+
media.
No
wonder
I’m
worn
out.
The
number
of
exhibitors
and
attendees
was
slightly
up
over
last
year.
See
my


2024
Wrap-Up.

2.
As
expected,
AI
was
front
and
center,
everywhere,
all
the
time.
While
many
presenters
went
out
of
their
way
to
establish
that
AI
was
becoming
embedded
in
products
and
what
we
all
do,
just
like
the
internet
or
electricity,
you
couldn’t
tell
it
from
the
exhibit
floor.
The
AI
capabilities
of
every
product
were
being
shouted
from
the
rooftops,
whether
AI
actually
had
a
significant
role
in
what
was
being
offered
or
not.
We
are
not
over
the
hype
cycle
in
consumer
products
or
in
legal
by
any
means.

3.
It
did
seem
clear
to
me
that
there
is
a
recognition
that
the
business
workforce
(and,
for
that
matter,
legal
workforce)
is
changing.
It’s
trending
younger
(think
Gen
Z),
and
workers
come
to
work
with
expectations
of
how
technology
should
empower
and
assist
them,
just
as
technology
does
in
home
life.
Law
firm
management
and
older
partners
need
to
realize
these
expectations
and
attitudes
toward
technology
in
supervising
workers,
training
workers,
and
in
the
hardware
and
software
they
provide.

4.
AI,
spatial
computing,
and
the
increased
blurring
of
the
real
and
virtual
worlds
are
coming
things.
While
I’m
not
sure
we
see
it
yet
in
the
workforce
to
the
extent
many
presenters
claim,
the
fact
that
we
are
witnessing
this
blurring
in
deepfakes
and
misinformation
suggests
we
can’t
ignore
it.

5.
I
was
impressed
by
how
many
women
and
people
of
color
were
presenters
and
offered
keynotes.
Keynote
speakers
and
key
women
presenters
included:

I
would
like
to
think
these
speakers
reflect
a
crack
in
the
glass
ceiling.
The
reality,
of
course,
is
white
men
still
hold
a
disproportionate
number
of
C-suite
positions,
particularly
in
the
tech
industry
and
legal.
Kudos
to
CTA,
though,
for
making
an
effort
to
showcase
women
and
minorities.

6.
Ahh,
the
products.
With
over
4,500
exhibitors,
it’s
impossible
to
see
even
the
tip
of
the
proverbial
iceberg
when
it
comes
to
the
products
displayed.
Here’s
the
thing,
though.
I
would
guess
some
75-80%
of
the
products
displayed
will
never
see
the
light
of
day
again.
They
are
just
too
experimental
and
pie
in
the
sky
to
go
mainstream,
at
least
not
yet.
Some
15-20%
of
the
products
displayed
do
something
that
other,
more
established
products
already
do.
That
leaves
a
small
percentage
of
products
that
we
will
actually
see
in
the
marketplace.
Why
bother
with
the
exhibit
halls,
then?
It’s
to
see
possibilities.
It’s
to
see
concepts
and
ideas.
It’s
to
see
products
that
may
morph
into
products
that
actually
do
make
it. 

What
product
did
I
see
that
I
think
may
go
mainstream?
Eyeglasses
that
double
as
hearing
aids.
It
is
too
a
good
fit
between
practicality
and
vanity
to
not
work.
One
other
end
of
the
spectrum
was
the
flying
car
that
was
touted
as
the
first
flying
car
to
fit
in
your
trunk.
WTF? 

Strangest
product
experience?
The
golden
retriever
service
dog
trying
to
get
its
head
around
the
natural-looking
golden
retriever
robot. 

7.
Robots.
There
was
an
increased
emphasis
on
robots
this
year.
Most
fit
in
the
enchanted
cute
pet
category.
A
few
exhibitors
displayed
human-looking
robots
that
could
perform
assembly
line
type
tasks.
My
guess
is
that
a
more
efficient
robot
would
be
less
human-looking
and
more
practical
oriented.
I
don’t
think
we
are
beyond
the
cute
stage
for
human
robots
quite
yet.

8.
One
thing
I
didn’t
report
on:
the
Yaccarino
Keynote.
Why?
She
said
everything
you
would
expect
someone
who
works
for
Elon
to
say.
Everyone
is
on
X.
All
the
advertisers
are
back.
The
best
way
to
fact-check
is
to
let
the
“community”
decide
what’s
true;
independent
fact-checking
be
damned.
DOGE
should
be
something
every
American
should
applaud.
(Unless,
I
suppose,
you
are
on
Medicaid,
Medicare,
or
Social
Security
and
happen
to
like
NPR).
Move
along;
nothing
to
see
here.

9.
Another
thing
I
didn’t
report
on
is
quantum
computing.
I
did
go
to
several
sessions
and
tried
to
get
my
head
around
it.
(One
presenter
said
classic
computing
is
based
on
math,
and
quantum
computing
is
based
on
physics.
I
sort
of
get
it.)
The
best
I
can
tell
from
all
the
presentations
is
that
quantum
computers
will
be
supercomputers
that
exponentially
increase
what
can
now
be
done
by
classic
computers.
But
most
agree
the
technology
is
not
yet
far
enough
along
to
know
precisely
what
applications
can
be
developed
to
work
with
these
computers.

The
use
of
quantum
computing
in
legal
is
unclear
other
than
being
able
to
do
some
things
better
and
faster.
One
thing
that
all
the
quantum
presenters
did
talk
about
(and
about
which
they
were
visibly
concerned)
was
the
impact
of
quantum
on
cyber
security.
The
sheer
power
of
these
computers
could
very
well
render
most
cyber
security
protections
obsolete.
And
precious
little
appears
to
be
being
done
about
it.

10.
Covid?
What
Covid?
Very
few
people
were
wearing
masks.
Very
few
references
were
made
to
Covid
anywhere.
I
got
the
distinct
impression
that
the
fear
of
Covid
has
faded
into
the
woodwork.
I
got
the
impression
that
this
show,
more
than
any
other,
has
entirely
returned
to
the
pre-Covid
normal.
We
shall
see
post-show,
I
suppose.
Pre-Covid,
it
was
a
standard
joke
that
most
attendees
came
down
with
the
“CES
crud”
post
show.
It
may
be
that
even
if
Covid
hits
attendees,
we
won’t
hear
much
about
it. 

What
About
Legal?

What
did
I
see
and
hear
that
will
have
the
most
significant
impact
on
legal?
Three
things:

1.
While
I’m
not
sure
agentic
agents
will
advance
as
far
and
as
fast
as
some
at
CES
seem
to
think,
I
do
believe
we
will
see
LLMs
advance
over
the
next
year
to
the
point
that
they
can
successfully
respond
to
prompts
with
multiple
tasks
and
questions.
And
make
decisions
and
recommendations
based
on
the
prompts.
This
ability
will
enable
lawyers
and
legal
professionals
to
reduce
time
on
nonproductive
work
and
enhance
efficiencies.
I
wrote
a


post

at
the
show
on
this
subject. 

2.
The
deepfake
problems
and
potential
are
real
and
getting
worse.
It
will
bedevil
lawyers
and
judges.
We
don’t
have
a
systemic
way
to
deal
with
this
crisis
and
the
gap
between
what
is
real
and
what
isn’t.
It’s
going
to
affect
litigation
and
legal.

3.
Law
firm
management
and
supervising
lawyers
need
to
deal
with
the
different
expectations
of
the
workforce
when
it
comes
to
technology.
Law
firm
management
needs
to
think
about
how
to
deal
with
the
workforce
disruption
that
is
coming
as
AI
does
more
and
more
tasks
that
humans
now
do.
If
management
doesn’t
plan,
it
will
be
faced
with
replacing
current
workers
who
know
and
understand
firm
culture
with
workers
who
may
have
the
skills
but
not
the
institutional
knowledge
and
commitment.

The
bottom
line
is
that
it’s
time
for
law
firms
and
in-house
legal
departments
to
stop
chasing
shiny
new
AI
objects
and
get
a
better
vision
of
what
the
technology
means
and
how
it
will
impact
what
we
do
and
how
we
do
it.

CES:
always
a
great
and
invigorating
Show.
Thanks


Above
the
Law

for
the
opportunity
to
cover
it.

Stephen
Embry
is
a
lawyer,
speaker,
blogger
and
writer.
He
publishes TechLaw
Crossroads,
a
blog
devoted
to
the
examination
of
the
tension
between
technology,
the
law,
and
the
practice
of
law.

Ed.
note:
Welcome
to
our
daily
feature,

Quote
of
the
Day.

There
will
never
be
an
enemies
list
within
the
Department
of
Justice.

—
Former
Florida
attorney
general

Pam
Bondi,
President-elect
Donald
Trump’s
nominee
for
U.S.
attorney
general,
in

comments
given
during
her
confirmation
hearing
before
the
Senate
Judiciary
Committee.
“If
confirmed,
I
will
fight
every
day
to
restore
confidence
and
integrity
to
the
Department
of
Justice
–
and
each
of
its
components,”
she
said.
“Under
my
watch,
the
partisan
weaponization
of
the
Department
of
Justice
will
end.
America
must
have
one
tier
of
justice
for
all.”

Staci
Zaretsky is
a
senior
editor
at
Above
the
Law,
where
she’s
worked
since
2011.
She’d
love
to
hear
from
you,
so
please
feel
free
to

email
her
with
any
tips,
questions,
comments,
or
critiques.
You
can
follow
her
on Bluesky, X/Twitter,
and Threads, or
connect
with
her
on LinkedIn.

The
wild
ethical
scandal
birthed
via
Texas
bankruptcy
judge

David
R.
Jones’s
romantic
relationship
just
keeps
on
getting
bigger.

Jones,
the
(now
former)
federal
bankruptcy
judge,
was
involved
with

Elizabeth
Freeman,
the
(now
former)
bankruptcy
partner
of
a
major
law
firm
—
Jackson
Walker
—
but
he
continued
to
hear
cases
involving
that
partner/law
firm.
That
led
to
his
resignation
from
the
bench
and
a
whole
mess
of
legal
issues.
Now,
the
Department
of
Justice
is
suing
Freeman’s
former
firm
to
try
to
disgorge
up
to
$23
million
in
fees
it
collected
in
cases
overseen
by
Jones.

As
part
of
that
case,
Kirkland
&
Ellis
partner
Joshua
Sussberg
gave
a
deposition
where
Jones
had
a
“lapse
in
judgment.”
Which,
honestly,
seems
like
an
understatement.
As

reported
by
Bloomberg
Law,
during
the
deposition
he
made
it
clear
what
Kirkland
would
have
done
if
they
knew
what
was
going
on
—
for
the
record
Sussberg
said,
“We
were
absolutely
shocked,”
when
news
of
the
relationship
became
public.

“To
the
extent
that
we
were
aware
of
an
actual
financial
relationship,
I
can’t
tell
you
exactly
what
it
was
we
would
have
done,
but
we
absolutely
would’ve
made
certain
that
that
was
out
in
the
open
for
fear
of
disrupting
an
existing
case
or
go
forward
cases,”
Sussberg
said.

Kirkland
worked
extensively
with
Jackson
Walker
on
bankruptcy
matters
in
Texas.
And
Sussberg
said
during
the
deposition
that
had
he
known
about
the
Freeman/Jones
relationship,
he
would
have
blown
the
whistle.
Not
*necessarily*
out
of
a
higher
ethical
standard
but
because
Kirkland
has
“reputation
and
a
brand
that
it’s
protecting.”

Sussberg
went
on
to
note
that
even
if
the
bankruptcy
regulations
do
not
specifically
mandate
disclosure
of
the
Jones/Freeman
relationship,
Kirkland
errs
on
the
side
of
disclosure.
“There’s
all
sorts
of
different
legal
rules,
regulations,
and
ability
to
challenge,
and
remedies
and
the
like,
but
I
would
absolutely
say
that
I
do
believe
it
tarnishes
all
these
cases,”
Sussberg
said.
“And
that’s
a
great
concern
from
our
perspective.”

Jackson
Walker

maintains
Freeman
misled
the
firm
about
the
nature
of
her
relationship
with
Jones.
The
disgorgment
case
is
slated
to
go
to
trial
in
April.

Earlier:

Former
Judge
Gets
Combative
When
Pressed
On
His
Romantic
Relationship

Who
Knew
What
When?
The
Latest
In
The
Judge/Partner
Romantic
Scandal
Rocking
The
Legal
World

You
Have
To
Read
The
Texts
Uncovered
In
The
Judge/
Biglaw
Partner
Romantic
Scandal

Federal
Judge
Slams
Biglaw
Firm,
Says
Firm
‘Defiled
The
Very
Temple
Of
Justice’

Biglaw
Firm
Still
Paying
The
Price
For
Former
Partner’s
Romantic
Scandal

Scandal-Ridden
Former
Federal
Judge
Seeks
To
Squash
Lawsuit
That
Started
It
All

The
Wild
Ethical
Lapse
That
Led
To
The
Resignation
Of
A
Top
Bankruptcy
Judge

Kathryn
Rubino
is
a
Senior
Editor
at
Above
the
Law,
host
of

The
Jabot
podcast,
and
co-host
of

Thinking
Like
A
Lawyer.
AtL
tipsters
are
the
best,
so
please
connect
with
her.
Feel
free
to
email

her
with
any
tips,
questions,
or
comments
and
follow
her
on
Twitter

@Kathryn1 or
Mastodon

@[email protected].