> this paper focuses specifically on the zero-sum nature of AI labor automation... When AI automates a job - whether a truck driver, lawyer, or researcher - the wages previously earned by the human worker... flow to whoever controls the AI system performing that job.
The paper examines a world people will pay an AI lawyer $500 to write a document instead of paying a human lawyer $500 to write a document. That will never happen.
I’m not sure what your expectation is, but even your claim about the assumption the paper makes is incorrect.
For one thing, the paper assumes that the amount that will be transferred from the human lawyer to the AI lawyer would be $500 + the productivity gains brought by AI, so more than 100%.
But that is irrelevant to the actual paper. You can apply whatever multiplier you want as long as the assumption that human labor will be replaced by AI labor holds true.
Because the actual nature of the future is irrelevant to the question the paper is answering.
The question the paper is answering is what impact such expectations of the future would have on today’s economy (limited to modeling the interest rate). Such a future need not arrive or even be possible as long as there is an expectation it may happen.
And future papers can model different variations on those expectations (so, for example, some may model that 20% of labor in the future will still be human, etc).
The important point as far as the paper is concerned is that the expectations of AI replacing human labor and some percentage of the wealth that was going to the human labor now accrues to the owner of the AI will lead to significant changes to current interest rates.
This is extremely useful and valuable information to model.
We seem pretty likely to be headed towards a future where AI-provided services have almost no value/pricing power, and just become super low margin businesses. Look at all of the nearly-identical 'frontier' LLMs right now, for a great example.
Do you think we will be doing in 5 or 10 years the same things we do today, but with AI? Every capability increase or cost reduction stimulates demand. AI is no different, it will stimulate both demand and competition. And since everyone has AI, and AIs are not much different between them, then the differentiating factor remain the humans. Even if we solve all our current problems with AI there is no reason to stop there, we could reduce poverty, pollution, fight global warming, conquer space. The application space is unbounded. Take electricity or internet for example and think how they expand the scope of work. Programming has been automating itself for 60 years, with each new language, library or open source project, and yet we have great jobs in the field.
No matter how much we have, we want more. Our capability of desiring progress is faster than AI capability to provide it.
The question the paper is tackling is how human behavior today (limiting this to modeling interest rates) would change if people generally expected money to transfer from labor to AI.
A future where this happens isn’t necessary for this paper to be valuable. Heck, even if people never believe this will actually happen makes this paperback less valuable.
As an analogy, let’s say someone wrote a paper on how humanity could respond to a catastrophic hit by a large meteor.
This paper would be valuable even if the earth is never hit by a meteor while humans are still here. Further, it would be additionally valuable because the insights gained here could then be applied to other, less catastrophic scenarios, such as a volcano eruption that destroys a single city.
It's an absurd assumption made by AI investors everywhere. They can't handle a world where everyone already has an AI lawyer at home that they trust, that they have because they once paid $100 for it at a kiosk in the mall or pirated it. The real future is an AI lawyer on your keychain and an extreme devaluation of the skill of knowing the law and making legal arguments.
Instead, we're going to have a weirder world where you show up to court and the court already has a list of your best legal arguments that they generated completely independent of you, and they largely match the list of arguments that your own AI advisor app gave you. They'll send you messages regarding your best next steps, and if your own device agrees, all you'll have to do is reply 'Y.'
For simple document preparation, I'm pretty sure that your phone will be able to handle it, and AI at the point of submission would be able to give you helpful suggestions if the documents were inadequate.
LLMs can almost do things of this degree of difficulty reasonably well now. Where will they be (or their successors be) in 10 years? Why do we think they will be as expensive as lawyers, who you have to send to difficult schools for a long time, feed, and flatter?
The whole AI will cause interest rates to shoot up thing seems a bit mad.
Labor automation is not zero sum. This statement alone makes me sceptical of the conclusions in the article.
With sufficiently advanced AI we might not have to do any work. That would be fantastic and extraordinarily valuable. How we allocate the value produced by the automation is a separate question. Our current system would probably not be able to allocate the value produced by such automation efficiently.
The proponents of AI systems seem to mostly misunderstand what you're paying for really. It's not writing letters.
Love this story so much I just posted it. Although it's from an era in which you'd buy CDs and books containing contracts, it's still relevant with "AI".
> “No lawyer writes a clause who is not prepared to go to court and defend it. No lawyer writes words and let’s others do the fighting for what they mean and how they must be interpreted. We find that forces the attorneys to be very, very, very careful in verbiage and drafting. It makes them very serious and very good. You cook it, you eat it. You draft it, you defend it.”
Lawyers are humans. They make the same mistakes as others humans. Quality of work is variable across skills, education, and if they had a coffee or not that day.
I would appreciate a version of this paper that is worth reading, FWIW. The paper asks an important question: shame it doesn't answer it.
there will be caste of high-tech lawyers very soon which will be able to handle many times more volume of work thanks to AI, and many other lawyers will lose their jobs.
She's got international experience and connections but moved to a small town. She was a magic circle partner years ago. Now she has a FTTP connection and has picked up a bunch of contracts that she can deliver on with AI. She underbid some big firms on these because their business model was traditional rates, and hers is her cost * x (she didn't say but >1.0 I think)
Basically she uses AI for document processing (discovery) and drafting. Then treats it as the output of associates and puts the polish on herself. She does the client meetings too obviously.
I don't think her model will last long - my guess is that there will be a transformation in the next 5 years across the big firms and then she will be out of luck (maybe not at the margin though). She won't care - she'll be on the beach before then.
Lawyers have a duty of care and of candor and of confidentiality, and a ChatGPT-ish model like that can violate all three.
-- [0] https://www.americanbar.org/content/dam/aba/administrative/p...
I think "quite possibly malpractice" does a lot of work. It's "quite possibly malpractice" to use an associate to draft an opinion. The associate could secretly take photos of the document and sell them to the opposition or the press, the associate could make stuff up, the associate could get drunk in a bar and tell everyone what they are doing. Who knows. You better have appropriate management controls, working practices and training in place! Even partners do this stuff sometimes though...
It could also be malpractice to use a networked computer to prepare documents - that could be hacked into and your duty of care could be shown to be breached.
If there's no deception and appropriate care is taken then is there an issue?
I'm not saying "it's probably malpractice" just to say it, I'm saying it because the ABA has put out guidelines saying that, and so have most state bars.
If you're putting client data into ChatGPT, for example, that's violating your duty of confidentiality. Telling someone you're doing it doesn't excuse it.
And yes, many of the other situations you mentioned would also be grounds for censure or losing your license. An associate is an attorney, you might be confusing the term with paralegal.
An associate doing those things would likely lose their license. And law offices are required to use best practices for security controls.
The funny part is that people think we will run out of things to do. Most people never hire a lawyer because they are much to expensive.
And to be transparent I'm very bearish on what we are being marketed to as "AI"; I see value in the techs flying underneath this banner and it will certainly change white collar jobs but there's endless childish and comical hubris in the space from the fans, engineers, and oligarchs jockeying to control the space and narratives.
Is your theory that the next week there will be an AI lawyer that charges only 400$, then it is a race to the bottom?
There is a proven way to avoid a race to the bottom for wages, which is what a trade union does - a union by acting as one controls a large supply of labour to keep wages high.
Replace that with a company and prices, it could very well be that a handful of companies could keep prices high by having a seller's market where everyone avoids a race to the bottom by incidentally making similar pricing calls (or flat out illegally doing it).
The core problem is lawyers already automate plenty of their work, and lawyers get involved when the normal rules have failed.
You don't write a contract just to have a contract, you write one in case something goes wrong.
Litigation is highly dependent on the specific situation and case law. They're dealing with novel facts and arguing for new interpretations, not milling out an average of other legal works.
Also, you generally only get one bite at the apple, there's no do-overs if your AI screws up. You can hold a person accountable for malpractice.
this is true - and the majority of work of lawyers is in knowing past information, and synthesising possible futures from those information. In contracts, they write up clauses to protect you from past issues that have arisen (and may be potential future issues, depending on how good/creative said lawyer is).
In civil suits, discovery is what used to take enormous amounts of time, but recent automation in discovery has helped tremendously, and vastly reduced the amount of grunt work required.
I can see AI help in both of these aspects. Now, whether the newer AI's can produce the type of creativity work that lawyers need to do post information extraction, is still up for debate. So far, it doesn't seem like it has reached the required level for which a client would trust a pure ai generated contract imho.
I suspect the day you'd trust an AI doctor to diagnose and treat you, would also be the day you'd trust an AI lawyer.
US automotive, labor, and manufacturing unions couldn't remain competitive against developing economies, and the jobs moved overseas.
In the last few years, after US film workers went on strike and renegotiated their contracts, film production companies had the genius idea to start moving productions overseas and hire local crews. Only talent gets flown in.
What stops unions from ossifying, becoming too expensive, and getting replaced on the international labor market?
Labor action, such as strikes.
You can even use the same argument line against the wheel, electricity, or farming.