Smart Software and Law Firms: Realities Collide
February 19, 2025
This blog post is the work of a real-live dinobaby. No smart software involved.
TechCrunch published “Legal Tech Startup Luminance, Backed by the Late Mike Lynch, Raises $75 Million.” Good news for Luminance. Now the company just needs to ring the bell for those putting up the money. The write up says:
Claiming to be capable of highly accurate interrogation of legal issues and contracts, Luminance has raised $75 million in a Series C funding round led by Point72 Private Investments. The round is notable because it’s one of the largest capital raises by a pure-play legal AI company in the U.K. and Europe. The company says it has raised over $115 million in the last 12 months, and $165 million in total. Luminance was originally developed by Cambridge-based academics Adam Guthrie (founder and chief technical architect) and Dr. Graham Sills (founder and director of AI).
Why is Luminance different? The method is similar to that used by Deepseek. With concerns about the cost of AI, a method which might be less expensive to get up and keep running seems like a good bet.
However, Eudia has raised $105 million with backing from people familiar with Relativity’s legal business. Law dot com suggests that Eudia will streamline legal business processes.
The article “Massive Law Firm Gets Caught Hallucinating Cases” offers an interesting anecdote about a large law firm’s facing sanctions. What did the big boys and girls at the law firm do? Those hard working Type A professionals cited nine cases to support an argument. There is just one trivial issue perplexing the senior partners. Eight of those cases were “nonexistent.” That means made up, invented, and spot out by a nifty black box of probabilities and their methods.
I am no lawyer. I did work as an expert witness and picked up some insight about the thought processes of big time lawyers. My observations may not apply to the esteemed organizations to which I linked in this short essay, but I will assume that I am close enough for horseshoes.
- Partners want big pay and juicy bonuses. If AI can help reduce costs and add protein powder to the compensation package, AI is definitely a go-to technology to use.
- Lawyers who are very busy all of the billable time and then some want to be more efficient. The hyperbole swirling around AI makes it clear that using an AI is a productivity booster. Do lawyers have time to check what the AI system did? Nope. Therefore, hallucination is going to be part of the transformer-based methodologies until something better becomes feasible. (Did someone say, “Quantum computers?)
- The marketers (both directly compensated and the social media remoras) identify a positive. Then that upside is gilded like Tzar Nicholas’ powder room and repeated until it sure seems true.
The reality for the investors is that AI could be a winner. Go for it. The reality is for the lawyers that time to figure out what’s in bounds and what’s out of bounds is unlikely to be available. Other professionals will discover what the cancer docs did when using the late, great IBM Watson. AI can do some things reasonably well. Other things can have severe consequences.
Stephen E Arnold, February 19, 2025
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