How in-house counsel are increasingly turning to generative AI

Episode Notes

Transcript

Announcer:

Welcome to the A v ABA Journal Legal Rebels Podcast, where we talk to men and women who are remaking the legal profession, changing the way the law is practiced, and setting standards that will guide us into the future.

Victor Li:

We’ve talked a lot on the show about how generative AI has changed the practice and business of law in a short amount of time. That’s especially been the case for in-house counsel. According to an October report from the Association of Corporate Counsel, generative AI use among in-house lawyers has more than doubled. Over the last year, more than half of respondents are now actively using Gen AI in their practice compared to only 23% last year. The survey also said that two thirds of respondents are using it so that they can eventually rely less on outside counsel, and over 60% are likely to push for a change in how legal services are priced. In other words, could this be the latest blow to the billable hour and survived a lot of things over the years? Recessions, pandemics, bubble bursts? Could gen AI be the one that finally kills it once and for all? Today’s guest is Jason Brown, CEO of the Association of Ke Corporate Counsel. He’s here today to talk about generative ai, how in-house lawyers are using it and where things might be heading as far as the adoption and advancement technology goes. Welcome to the show, Jason.

Jason L. Brown:

Thank you for having me, Victor. I’m thrilled to be here.

Victor Li:

Great. So today is what, your 10th day in the job?

Jason L. Brown:

Exactly. Day 10. You’re absolutely right. It’s been a fast moving 10 days, but it has been 10 days. Yes,

Victor Li:

I can imagine. Well, welcome aboard. And could you tell me a little bit about yourself and your background and how did you come to become CEO of the A CC?

Jason L. Brown:

Well, I’ve been a lawyer for about 25 years almost, well, actually, yeah, exactly a little over 25 years, which is kind of shocking for me to even think about. I did a lot of lawyers. I started my career as a private practice attorney working in law firms, my hometown in Minneapolis and then also in Chicago. But I’ve been an in-house lawyer for the past 22 years, so actually A CC was one of the first door associations I joined after becoming in-house, and I’ve volunteered and engaged as a volunteer leader with a CC almost from the beginning, serving as everything from a board member to chapter president in Chicago to serving on the global board the last few years before I stepped down and then stepped into this role. So I have a long history with a CC, almost 20 years history of a CC and just really happy to be entrusted to take the reins right now,

Victor Li:

If you could go back in time, like 20 years and tell yourself, Hey, in 20 years time you’re going to be CEO of this organization that you just joined. Would you have believed it? What would you have said?

Jason L. Brown:

Oh, absolutely not. I would’ve laughed at the thought of moving, first of all, moving beyond the practice, the active practice of law in a day-to-day basis. I just 20 some odd years ago, I was still really young in my career, so I couldn’t have thought of anything different. But knowing the size and the scope and the complexity of a CC and what it was doing then, and even now, what it’s doing now, what we’re doing now, it would’ve just been kind of an awesome thought to be entrusted with leading an organization of the size. But as time has moved on, as my career has grown and as my engagement with the association and also with the legal industry has moved forward and advanced, I can’t think of a better place for me to be and I’m really excited for the transition and what’s ahead.

Victor Li:

We talked about practicing law and what now? Was there a reason why you decided to stop practicing and move to more of an administrative role or was just the opportunities that were afforded to you, you just went with it?

Jason L. Brown:

Yeah, that’s a good question, Victor. I would say my career, I spent the last 12 years or so as a general counsel for two companies, and I think when you’re the general counsel, you start to get a lot of focus and you do a lot of focus more on the business aspect of the practice of law industry aspect of the practice of the law, not just specifically what’s happening in a particular discipline and that kind of focus. And so I think for me, in taking those types of roles, I’ve had more of a strategic view of the practice of law, more strategic view of the impact of it within the entire industry, not just the particular role that I had. So as I started to engage more, especially being on the board of the Association of Corporate Counsel, thinking of stepping away and jumping into this type of role, just excited me because at the focus that I had in my career and thinking of things through as far as what makes us work, what makes us tick, I mean in-house lawyers and the legal industry in general, just being able to take the opportunity to move into a leadership role of this size and scope.

At this point in my career with the experience I had, it wasn’t so much as abandoning the law. It’s actually kind of embracing it even more in a bigger way to see how I can take energy, take my background, my learnings, my history, and bring it forth to the entire association to entire organization and see what impact that could make.

Victor Li:

Gotcha. Can you talk a little bit about the history of the relationship between in-house counsel and outside lawyers? What kind of work does in-house counsel keep and what kind of work do they typically send out?

Jason L. Brown:

Yeah, so it is a very complex question because it really depends on the organization itself. I think that there are certain corporations that have a large, robust in-house counsel panel of attorneys, employees that work within the company that cover the gamut of all things related to intellectual property, corporate contracts, which can range quite a bit. There’s attorneys that do regulatory work for the company to make sure that they’re abiding by any of the regulations that their industry is mandated to be aware of and those types of things. However, there are still some areas where I do think that there’s still consistently a heavy reliance on outside counsel. I think when you’re doing a very large scale, mergers and acquisitions you usually have in outside counsel involved in that quite a bit. No matter what the size of the organization, when you have large scale litigation, you’ll definitely have outside counsel assisting you with that type of work and managing those types of things.

I do look at new areas of the law that pop up or new regulations that pop up. You may want to lean on outside counsel to assist you in engaging your business and how you’re better prepared to respond to these types of new regulations or standards or policies that come from whatever agency or organization is of regulating your industry. So it really depends to give you the lawyer answer to how people are utilizing in the relationship. But it goes back honestly to the beginning of the formation of corporations. I mean, you lean on outside counsel to help form your corporation to file articles of incorporation, make sure that those things are aligned to understand how to formulate your board and complete the required documents if you’re a publicly traded company. Those types of things have always historically been something that outside counsel has leaned in over time just because of sheer magnitude of cost, the repetition of that work.

Much of that work has been brought inside by in-house counsel, chief legal officers across the board to assist the company in doing those types of things in a more efficient manner. However, does not mean that there aren’t occasions where it is still needed to go out there for the expertise that you have without outside counsel in certain niche areas or just in broad scope because you need the resources necessary to deal with, like I said, maybe a large scale acquisition, large scale litigation, or there are other types of matters that you may want a little bit of complexity or need a little bit of complexity in what happens when it comes to outside counsel.

Victor Li:

So ideally, what should the relationship be like between in-house counsel and the outside attorneys? Do they need to talk all the time and coordinate all the time, or can it be more of a hands-off relationship or where do you think the sweet spot is on that?

Jason L. Brown:

The best ones I believe always work when it’s a partnership, but I say that almost any type of business relationship, because it is a business relationship, it is largely transactional when it just comes down to it. However it best work when each party understands the needs of the other meaning, Hey, listen, I want to know what the type of expertise you have within your firm. I want to know when I can lean on that to the benefit of my company. So it’s great for me to understand that there’s a nuanced area in the law that I have not heard about or maybe my team isn’t well positioned for, and you’re that opportunity to me to say, Hey, we can provide these services to you or give you a look and some advice on this that maybe your company hasn’t looked at. That happens when you have a strong partnership that happens when you have a feeling between the outside counsel and house counsel of trust to match that.

Sometimes you get the work, sometimes you don’t. But there’s that feeling of collaboration that I think works long-term when you have that relationship. And then also I think when you’re trying to build that connection, the better the outside counsel knows the company, the clients that they work for, the better the services that they provide. So as an in-house lawyer, one of the things you try to do is make sure that you speak frequently with your outside counsel on things that are related to or important to your business so they understand your business, they know how different you may be from some of their other clients so that they can better serve you. It always works better when obviously that’s not transactional, meaning that’s not for a fee, but that is for the development of the relationship so that both parties can get the best out of each other from a work standpoint, work product standpoint and also relationship standpoint.

Victor Li:

One thing I wanted to ask you is very often when, I mean I don’t talk to general counsel or in-house counsel all that much, but whenever I do talk to them or I hear them speak very often, they talk about value and wanting to make sure that they get value from their relationships with outside counsel. What does that mean? What does that mean to you? Value?

Jason L. Brown:

You’re right. You’re going to hear it a lot from outside counsel. I think we say it a lot because it becomes one of those things that we’re pressed upon within our business in-house counselor asked, this is kind of one of those cliched statements, but it’s true to do more with less, meaning that you are trying to create a greater, generate, a greater amount of product or output from your services of your department with increasingly diminishing resources or that funds in order to do that. So value to me and to many in-house counsel is I want to partner and work with an outside counsel that the amount of money and energy that I’m expending in that relationship is equivalent to the value that they’re getting out of it. So I don’t want to pay a premium, but all of a sudden I’m getting mid-level or low level value work.

If I’m going to pay a premium, I should be getting premium work that has premium value to my company and premium value to my department. And oftentimes the struggle is you are working with a law firm that is solid, they do great work, but you end up paying a premium for what really relates. It really comes down to is very routine legal work. It doesn’t mean that that legal work isn’t important, but it is routine and you don’t need to pay top dollar for it. You can actually bring that work or maybe find another service provider that is providing a lower rate so that you can actually see value for what you’re actually paying for. So as in-house counsel, part of what the demand is is to understand that dynamic. No matter how much you love your outside law firm, you’ve got to understand that so that for the purposes of the business and for the betterment of the business, you’ve got to make sure that you’re bringing value.

Victor Li:

Okay, interesting. So yeah, we’ll talk a little bit more about that and how generative AI has changed that as far as in-house counsel go. But let’s take a quick break for a word from our sponsor and we’re back. So let me ask you now about generative ai. So lawyers have historically been slow to adopt technology. What is it about generative AI that’s been different in your eyes?

Jason L. Brown:

Generative ai, I believe because it is new and it’s so rapid in the advancement of how folks are using it in their personal lives, in their business lives. Attorneys specifically in-house are really trying to take a measured approach in how it impacts us. And I think that is why we have been slow to react and respond to a lot of things. But gen ai, just because it is something that is personal for everyone, everyone can use it. Everyone can use it for their own personal benefit, I think has shown a bit of a different nuance. And as people become more comfortable with it, they really start to realize the efficiencies that it has almost immediately. So I believe that the adoption level of technology right now, specifically as it relates to AI, is moving much faster because people actually realize like, oh, wow, not only does this work, but it’s making my life a little bit easier, so let me get on that and figure out a way to utilize it in the most efficient way possible.

Victor Li:

And that’s the other thing I wanted to ask you about generative ai. So obviously it’s a broad brush, it could incorporate all kinds of things. So how is it being used as far as in-house counsel go? What is it that they’re actually doing as far as generative ai? How would you describe the work that they’re doing and what they’re using it for?

Jason L. Brown:

So it is across the board for in-house counsel, the things that they’re starting to use it for. I think the first thing that you’ll see is many of ’em are using it as a drafting tool to assist in some of the regular general requirements that they have for the job about revising and drafting, whether it’s a letter or a document that is looking at advice or a deep dive on a policy or a regulation that comes out just to summarize it and to bring that to bear. It actually has some attachment in looking at things like some legal research and that kind of thing where you’re trying to compare a couple pieces of advice from before as they see new regulation and see how they can improve upon that. Now, I think also what I’ve heard of just from the people that I work with in the past and other in-house counsel really has been just general efficiency in just your day-to-day operation using AI with everything from your emails to manage that in your day-to-day structure, how to manage emails, how to manage pace of work, and those types of things are really seeing a lot of engagement with ai.

Victor Li:

And so how has it changed the relationship between in-house counsel and outside lawyers? What kind of work are in-house lawyers now keeping more for themselves, and has that led to them demanding lower fees from outside counsel?

Jason L. Brown:

Well, we have done a survey that you’ve mentioned right off the top and looking into some of that, and majority of our folks have not done anything specific with the law firms to say, Hey, we are changing the way our relationship works. I think largely it’s still too new to get to that point where you are actually actively changing the methodology in which you work with your law firms or pulling large scale work away. I don’t think it is that, but I do believe that there is a lot of the simple data-driven engagements as far as, Hey, can you assist me in, as I said, drafting a letter? Can you assist me on reviewing some of these contracts or some of these things that from an overflow standpoint, you just need the bodies and the resources to help you do. Now you can get some of that work done via AI where you’re getting that type of a review. You still have to double check it. Obviously there’s still engagement in it in that kind of way, but just the management of flow of work is starting to improve a bit where people are engaging more with ai, but the jury is still out, as they would say, on exactly what that means in the next year or so with law firms and that engagement. It’s coming, you better, believe me, it’s coming. But how that really does that impact, we haven’t seen any demonstrative evidence that people are making changes right now.

Victor Li:

Gotcha. I mean, is it more a sense where it’s like, okay, you guys, just in the way that you’re using it as in-house lawyers, you see all the time savings that these tools are capable of. And so the understanding is kind of like, all right, well if we’re saving all this time and all this energy and all these resources, then maybe outside counsel should be able to as well. Is it just kind of like that at that stage where you’re just kind of still in that germination stage as far as what this technology is capable of and what others could be doing with it?

Jason L. Brown:

Yeah, absolutely. And I think the other side of it too is just there’s that collaboration side of it as well. So there’s things that in-house can do on their side that can set up a matter in a very different way than before to their outside counsel. So maybe some of the beginning stages of that work that before was dropped on outside counsel, they had to start from, let’s call it stage one and work through a matter, whether it’s litigation or commercial work or m and a or anything like that. Now, maybe in-house is able to get that to stage two or three with the assistance of ai. So the law firm is coming in and starting at a different level. It helps from an efficiency standpoint and a value standpoint because you don’t have to pay for the first two stages, but also from the law firm standpoint, they’re able to bring in their best and their brightest to tackle an issue and say, oh, I don’t have to worry about some of the earlier stages of addressing this issue and unpacking it. It is here, right here ready for me to go. And maybe if I have, the law firm has its own AI tool that maybe they can leapfrog into stage four, four or five in the assistance in driving that as well before they get their hands dirty, getting eyeballs on papers and pens and out, those kinds of things. So the evolution of this, we’re still seeing, and we’re still all trying to figure out is each different company, each different industry, especially within our association, tackles how they best utilize ai.

Victor Li:

Gotcha. And so now the $10,000 question, do you think this could lead to an end or a significant modification of the billable hour? And what do you think it would take for Virginia AI to get rid of it once and for all?

Jason L. Brown:

Victor? That is the, you’re right, that’s the big question. I wish I had a crystal ball to tell you how to answer that. And honestly, I’ve been practicing law for, as I said, over 25 years, and I’ve heard the end of the bill of hour several times and it is still there. I don’t know the right answer to that. I do believe if there was anything that challenges that model, it probably is AI and how we go about really measuring the way in which we work and the output, which is most important at the end of the day. I think there’s alternative fee arrangements that go on right now that people have developed over the last several years, decade or so in trying to harness what that is and get that value. Those I think, are great measures to look at seeing how we use those when it comes to valuing how AI can help measure the cost and the value of legal services to assist outside counsel in charging for it and in-house counsel for understanding the value that they’re getting. But right now, I don’t think it’s, it’s definitely not a 2026 issue, but probably 2027 and beyond, I think there’s going to be more aggressive conversations about how we go about restructuring many companies and their law firms will go about how we go about restructuring the relationship that we have and how we pay for legal services. I think that’s coming and it should be expected

Victor Li:

Tack back on the value prospect as well. You’re talking about trying to determine how to get value and based on how much things cost, and I assume looking at historical data and whatnot, does gen AI make it that much easier for you guys to be able to do that kind of work?

Jason L. Brown:

It does. I think one thing that in-house counsel are able to do is really use AI over time to track efficiency of the department, the time in which it takes them to complete specific tasks, how heavy laden the resources are required for certain tasks. I think the thing that you have to look at and understand now is it really takes time to understand what that looks like. So in engaging in certain areas in ai, it may look different from September of 2025 to February of 2026 and to see if it’s really made a significant shift to invest in a different way or building up a different model. So we’re in that stage right now, I believe most in-house counsel are evaluating the efficiencies that it sees and then trying to determine how do you take that and action that within your company. The next phase of that is how that impacts how you work with your outside counsel on the same or similar tasks or if you move them entirely. And that is, I think in kind of response to your question is how we are really looking at the future as it pertains to how we manage this and then how that evolves to the work that is done by outside counsel.

Victor Li:

Gotcha. Alright. So let’s take another quick break for a word from our sponsor and we’ll get back to talking about generative ai. And you’ve mentioned crystal ball earlier. I’m going to ask you to break out your crystal ball for this next segment, and we’re back. Let’s talk about potential drawbacks of ai. Obviously there have been a lot of headlines about hallucinations and other problems. How should in-house counsel utilize AI responsibly and what can they do to make sure their outside lawyers are doing that too?

Jason L. Brown:

Well, first and foremost, you have to educate yourself on the tool, what it can do, what it can’t do, and understand the risks, inherent risks that are involved in this. And I believe in-house counsel, they’ve placed themselves in a position to be able to do this and do this well because you’re always leveraging your business acumen and the legal risks and everything that you do day to day within the work that you do for your company. So I do think it is really important to look at how you’re using this technology, what it can do, and not overstate what it can do and the response of the work that needs to be done. Understanding that you’re right, there are some hiccups within AI that is creating and generating false information or improper or incorrect information. So you always want to be there to double check and sense check things, but I also think it is a tool is no better than the person that’s using it. So you have to really understand the tool and how you want to use it in order to get the best out of it. So I do think that in-house counsel really and even outside counsel, really have to look at and understand the inherent risks that come with it, the challenges that you may face in managing how you work with AI, and really kind of develop your strategy about how it’s going to help you in the future, first and foremost.

Victor Li:

Yeah, I’ve always looked at it like AI can make a good lawyer better, but not going to make a bad lawyer into a good one, right? I mean, you can look it like that, I guess, right?

Jason L. Brown:

No doubt. And with us and the a CC, we have really been looking at this for the better part of a year plus, and through that we have developed our A CC Center of Excellence focused specifically on ai. And that AI Center of Excellence really tries to hone in on educating our members on how to utilize ai, educating them on the right steps to take in the evolving AI technology that is coming. AI today is not going to be as great as the AI that comes out next week. So it’s not just something that you learned today and then put it away. You’ve got to constantly continue to evolve. So that’s what we’re trying to bring to our members to make sure that they have that opportunity to learn and engage from it and engage from others and benchmarking and seeing how other folks are using it. And we’re seeing not just the access of that, but also the usage of our members of AI just grow exponentially.

Victor Li:

So talking about where the technology is heading, where do you see generative AI going and how do you think it’ll affect in-house council in the short term and in the long term?

Jason L. Brown:

I think it is going to be inexplicably tied to how we operate day to day. I just don’t see the in-house council moving away from it. And I’ll say that because the companies that most of us work for are becoming more comfortable and fully engaging in ai. So it is not just a practice of law issue, it is just a way in which we operate work. It is probably the most transformative tool that has come to our disposal since the internet, to be honest with you. We are noticing back when I started practicing law, there were some partners at my law firm who did not have computers on their desk that they were still kind of operating in this new phase of, well, we’ll let the young people jump in and work the internet and engage in that. We’re kind of still in this old school mindset now that it’s just laughable to think that that’s not how everyone is engaged in the company to the CEO to the most senior partner of any law firm.

They have computers, they’re online, they’re engaging with social media because that is the way in which you have to understand your consumers and understand the way that you work. AI is moving to the front of that where everyone is going to be figuring out ways in which they use AI to enhance their day-to-day. So it is not just a practice of law thing, it’s an operation of business thing. And within the operation of business, it just comes to in-house counsel, being able to figure out a way with outside counsel support and engagement and how we’ve actually managed how the law works in all of this, which is the most complex thing that we still haven’t figured out yet, to be honest with you, Victor. But the most complex thing that we’re going to have to face is the legal complexities of AI in everything that we do.

Victor Li:

Yeah, and also one thing I wanted to ask you was about age agentic ai. How would you define age agentic ai and how do you thinkhouse council might utilize it?

Jason L. Brown:

So I would define age agentic AI as basically the operation of the systems and AI being able to autonomously operate and work for the benefit of the task in which you’ve set up. So as you are right now using ai, it is just a kind of a, you put it input and it spits out output, and that’s something that is really helpful. But energetic AI is moving towards, you don’t need to be there to orchestrate or direct on a day-to-day basis. It is something that a system can build up that as things come in, as issues pop in or as challenges are evolved or elevated, the system itself can see it, recognize it autonomously, deal with it, and then execute the output that was intended. So I think that that’s something that is going to be desired and it’s something that is needed for many of the operations in-house because that is going to be one of the best ways that we can improve efficiency. How do you deal and manage with the lawsuits that are coming in the door every day and making sure they get to the right place? How do you respond to the inquiries that are coming in from various sources and that kind of thing? Is the system set up to deal with that at least get things or triage things in the right manner or just solve it all together if it can, is going to be highly beneficial and assist with the efficiency I’ve been talking about during this cast.

Victor Li:

And finally, I did want to piggyback off something that you said earlier, talking about sort of legal complexities of AI and whatnot. So with so much unknown and government literally at a standstill as far as providing guidance or passing rules and laws and whatnot, how should lawyers approach this technology in a way that’s cautious and doesn’t expose ’em to any kind of potential liability or malpractice, but still allows ’em to be able to utilize this technology in a way that will help them with their work?

Jason L. Brown:

An easy phrase is to say trust but verify, and that’s just kind of one of the things that you think through almost anything that you utilize. The folks that have been working on advancing and truly engaging in the development of AI are hypersensitive about the accuracy of AI for everyone because once it becomes wholly inaccurate and lose value, no one is going to use it. So there’s definitely value to there, but it doesn’t mean that they catch everything and that there’s not holes in it. And as I said before, it only works as well as the user. So you yourself have to be well versed in knowing and making sure that you’re doing the right thing. So I think you need to trust the system that it can work. I think you verify and just do some spot checking to ensure that the details and the data is accurate.

But I think there’s nothing short of actually learning and understanding for yourself how best to utilize the system and how best to utilize AI in general. Just like we have all learned how to operate, all of the things that exist in the world and the internet when we’re all learning how to do legal research and that kind of thing, there’s a science to it as well as an art. And the best people who are going to be able to utilize it and avoid a lot of issues are those who are going to take the time to be educated on how it works, be understanding of the limitations that it has, knowing full well that those will probably change week after week, month after month. But it’s really about being diligent in your focus in the craft and the art that is the practice of law to know that this isn’t going to be the fail safe solve for everything, but it can definitely help you and knowing how it can do that in the best way in which it can help you and your organization, there’s really no substitute for that. You guys got to take the time to learn it.

Victor Li:

And to wrap up, if our listeners wish to follow your work with the a CCC or get in touch with you, what’s the best way to do that?

Jason L. Brown:

Well, I would just point ’em directly to our website, acc.com. It is a wealth of information there. You can see the data for you that are in-house. You can join a CC. We provide a lot of information as well that you can access if you are not a member, just to get some basics of what I’ve talked about today and some of the things that we are trying to do to benefit the entire legal industry and not just in-house. So I would suggest just going to acc.com as your starting point, kind of see what’s going on, engaging there. If you care to follow us on socials that are out there, whether it’s LinkedIn, on Facebook as well, you can do that and really track some of the things that we’ve been talking about specifically on AI and even our A CC AI Center of Excellence that I’ve talked about as well. Things that we’re sharing of what’s coming out of that as well. We do that on those websites and social media that’s available to anyone.

Victor Li:

Great. Thanks again for joining us today, Jason. I appreciate it

Jason L. Brown:

And thank you, Victor, for the time and appreciate it.

Victor Li:

If you enjoyed this podcast and would like to hear more, please go to your favorite app and check out some other titles from Legal Talk Network. In the meantime, I’m Victor Lee and I’ll see you next time on the ABA Journal Legal Rebels Podcast.

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