AI & Law: Legal Charges By The Nanosecond

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Charging for legal advice by the hour and ultimately by the nanosecond

by Dr. Lance B. Eliot

For a free podcast of this article, visit this link https://ai-law.libsyn.com/website or find our AI & Law podcast series on Spotify, iTunes, iHeartRadio, plus on other audio services. For the latest trends about AI & Law, visit our website www.ai-law.legal

Key briefing points about this article:

  • Lawyers tend to charge for legal advice based on hourly work (or fractions thereof)
  • ABA stipulations indicate that those lawyering fees are to abide by “reasonableness” factors
  • The future of lawyering will encompass AI-based legal reasoning systems
  • Those AI systems will run based on nanoseconds (one billionth of a second)
  • How will lawyerly legal advice be charged when AI can do so on such fractions of time

Introduction

The famous line about time being money is one that equally applies to lawyers and the practice of law. One could readily assert that the bread and butter of being an attorney is the proffering of legal services and legal advice and that this is done to both serve the cause of justice and also to put food on the table, as it were.

Typically, a lawyer will charge by the hour.

This can be arranged to occur in fractions of an hour, such as some law offices that charge on a basis of one-tenth an hour or for every six minutes of legal effort consumed, while others use a one-sixth minimum unit of ten minutes and some use a half-hour as their lowest core unit of time.

Per the stipulation of the ABA, a lawyer is to charge a fee that entails a semblance of “reasonableness” and ought to include a mixture of several factors in ascertaining that it comports with being reasonable, and therefore, presumably, does not reflect an unreasonable charge. One of those factors as stated by the ABA is that the reasonableness is based on “the time and labor required, the novelty and difficulty of the questions involved, and the skill requisite to perform the legal service properly.”

Of course, charging by the hour is not the only way to go.

There are flat fee arrangements that can be made, though this is generally a rough road to travel since it can be problematic to predetermine what makes sense to charge for a case in its totality.

You either find yourself essentially over-charging by doing a lot less legal work than originally anticipated, and possibly drawing ire from the client (despite the presumed a priori agreement to a flat fee, there can nonetheless be buyer remorse or more like enmity if it seems ultimately unbalanced), or you can potentially under-charge and are said to lose your shirt in the process because you didn’t get fully compensated for your efforts. The latter instance encompasses a lost opportunity cost too of having usurped using your legal billable acumen toward other more fruitful payment opportunities.

The headline-grabbing form of legal effort compensation consists of contingency fees.

We’ve all witnessed the whopping windfalls that at times can occur in legal cases involving contingency payment arrangements. Indeed, circumstances that seem nearly too good to be true are oftentimes bandied around in court as to the “reasonableness” versus “unreasonableness” and attempts after-the-fact are made to alter or adjust the compensation accordingly. A long-standing argument usually made is that the upfront core risk of not getting paid or getting a pittance is the other side of the coin that can sometimes happen to land on the side that perchance brings in the big dough.

By-and-large, though a myriad of fee arrangements can be made, it seems safe to suggest that predominantly the billable time of lawyers is done on an hourly basis (or fraction thereof) and pretty much is the standard fare and generally accepted practice for today’s legal profession.

Let’s assume that this per hour basis as a golden rule will continue.

Down To The Split Second In Timing

Maybe the per hour approach will inevitably turn into the per nanosecond rule-of-thumb.

How’s that?

First, to clarify, a nanosecond represents one billionth of a second.

That’s a quite minuscule amount of a second and certainly a quite microscopic amount of an hour’s worth of time. You might be tempted to say that it is no more than the blink of an eye, but that would actually be woefully undercutting the briefness of a nanosecond since eyeblinks are about 100 milliseconds in duration (you might recall from your metric system lessons that 100 milliseconds is 100,000,000 nanoseconds, which is a boatload of nanoseconds).

Okay, so how in the world could a lawyer charge for their legal services based on a billionth of a second, given that there is no “reasonable” way to measure your legal mental processes such that somehow your neurons and synapses generated legal advice at that infinitesimal level of thought?

The answer is that we need to shift our attention momentarily away from the preoccupation with human thought and focus instead on computational processing and the role of AI-based legal reasoning systems.

We are gradually witnessing the adoption of Artificial Intelligence (AI) into the field of law and the practice of law. This initiative will initially consist of semi-autonomous AI legal reasoning systems that are devised to work hand-in-hand with human lawyers. The AI as a legal tool will be at the fingertips of lawyers preparing for a case and provide augmented legal guidance and legal suggestions about how to proceed.

Eventually, there is bound to be created more fully autonomous AI-based legal reasoning, and thus no need for working directly with a human lawyer per se. That’s to say, the AI system would be considered the equivalent of a human lawyer in terms of dispensing legal advice and can work directly in that capacity as a legal advisor. Human lawyers could certainly still interact with and utilize such AI, but this would be due to the desire to have a lawyer-to-lawyer kind of dialogue and not because the AI system is lacking in legal acumen and needs the added crutch of relying on a human attorney.

For details on this and other AI and law topics, see my book entitled “AI and Legal Reasoning Essentials” at this link here: https://www.amazon.com/Legal-Reasoning-Essentials-Artificial-Intelligence/dp/1734601655

When it comes to charging for legal advice, an AI-based legal reasoning system works on the speed of computing, traditionally taking place based on nanoseconds, and it could be that a legal case can be assessed, and legal advice rendered, in that timeframe.

Would you, therefore, charge the client based on nanoseconds worth of legal advice?

Seems laughable today. Imagine the reaction of a client. What’s this charge for a thousand nanoseconds doing on my bill?

Also, the question arises as to what dollar amount might be charged for AI-based legal advice. If you charge the same as the hourly rate of human lawyers, you likely won’t be in business for very long, since even the largest of human lawyering rates if divided into billionths is a fraction of a fraction of a fraction of a cent.

Conclusion

Of course, some say don’t worry about it now, we’ll simply cross that bridge when that day arrives.

Yes, this can seemingly be postponed until then, though the odds are that whence those attorney fee struggles arise, we’ll be arguing about picoseconds (one trillionth of a second) and those old-time nanoseconds will seem like snail-paced legal advice in comparison.

For the latest trends about AI & Law, visit our website www.ai-law.legal

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Copyright © 2020 Dr. Lance Eliot. All Rights Reserved.

Dr. Lance B. Eliot is a renowned global expert on AI, Stanford Fellow at Stanford University, was a professor at USC, headed an AI Lab, top exec at a major VC.

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