Toby Brown
Toby Brown, CEO at DV8 Legal Strategies and CEO at NextGenLPM, joined Amy Monaghan for an insightful conversation at ILTACON 2024. They discussed discuss various topics, including Toby’s career, the latest developments in the legal industry, and his insights into the impact of generative AI on law firm economics. If you missed it, you’ll find a recap of Amy and Toby’s conversation here.
Toby Brown – Background and Current Role
Toby Brown began by sharing a brief overview of his professional journey. Known as one of the original pricing experts in the legal sector, Toby’s role has evolved over time. Today, he focuses on practice management, legal project management, and client innovation. As CEO of DV8 Legal Strategies, Toby brings his expertise to a wide range of projects, aiming to enhance law firm profitability and operational efficiency.
Focus at ILTACON: SALI Standards and Generative AI
At ILTACON, Toby was involved in several initiatives. One of the main topics he discussed was the SALI standards—a comprehensive set of legal industry standards aimed at improving data quality and consistency. Toby highlighted the importance of clean data for successful generative AI applications, emphasizing that improving data quality is crucial for firms looking to implement AI solutions effectively.
Toby also shared exciting news about the upcoming release of a generative AI tool designed to help legal firms and departments code their data according to the SALI standards. This tool aims to automate data coding, which has traditionally been a manual and time-consuming process.
The Economic Impact of Generative AI on Law Firms
Toby delved into the economic implications of generative AI on law firms, drawing from his recent papers on the subject. He pointed out that while AI promises increased productivity—allowing firms to complete tasks more efficiently—this might not directly translate to higher profits. In fact, his analysis suggests that a significant reduction in billable hours could lead to decreased revenue and profitability.
For instance, disrupting 5% of partner time and 20% of associate time in M&A matters could result in a 13% revenue decline and an 8-10% drop in profitability.
Strategic Deployment of AI in Law Firms
Toby emphasized the need for a strategic approach to AI investments in law firms. He noted that AI technology and skilled professionals are expensive, and law firms must carefully choose where to allocate resources to maximize ROI. Random or scattered AI adoption efforts will not yield the desired economic benefits. Instead, law firms should focus on specific practice areas or tasks where AI can have the most significant impact.
In summary, Toby’s insights at ILTACON underscored the transformative potential of generative AI in the legal industry. However, he cautioned that law firms must adopt a strategic and economically informed approach to harness its benefits effectively. By focusing on data quality and targeted AI applications, firms can navigate the evolving landscape and ensure long-term profitability.