Comment by iliaxj
21 hours ago
The article doesn't seem to take his train of thought quite far enough.
If AI suddenly makes it possible for a law firm to be run with a skeleton crew, then what's stopping all those people you fired from starting new law companies, where AI also does most of the work, and competing with you for the same market?
And ultimately, if AI gets to be so good that it can competently do a lawyer's job, what reason do big law firms even have to exist? Who is going to hire them if they can just hire AI?
The companies that are rushing so hard to replace their workers don't realise that AI is eventually going to replace them too.
I foresee a wave of entrepreneurship coming. AI will empower more people to provide useful services directly to other people, with less middlemen and menial work, and more direct problem solving.
> If AI suddenly makes it possible for a law firm to be run with a skeleton crew, then what's stopping all those people you fired from starting new law companies, where AI also does most of the work, and competing with you for the same market?
Money. They won't have the money to pay for the tokens, or the best models, because they'll be unemployed. They also won't have the connections to get the clients.
When you're playing a game of "who has the best capital," the scrappy underdog worker with vastly less won't win.
The idea that making the economy even more capital intensive will some how equalize things is an insane fantasy only a software engineer could swallow.
It has become a meme at this point but this sentence still stands: "The underlying purpose of AI is to allow wealth to access skill while removing from the skilled the ability to access wealth".
Haven’t heard that meme, but it seems like you could replace “AI” with “civilizational striving/class struggle” and extend it across the whole of human history
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Taste and experience are so much more important than the raw talent. You can't fix this with money.
https://youtube.com/shorts/akcSX81KOv4
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Sorry that's no realistic. People start businesses, including law firms, all the time with little to no capital.
Assuming token costs will be prohibitive assumes:
A) tokens will be really expensive and B) you need to fund tokens before you have revenue.
Your asserting AI makes the economy more capital intensive, when I think you'll see in practice it's the opposite.
People start businesses all the time yes.
But like 80% shuts down before reaching 2 years as they run out of money.
> People start businesses, including law firms, all the time with little to no capital.
Those people are usually very talented and work 16/7. And they need to convince other similar people to work for them, usually at a lower-than-market rate.
The premise here is "talented humans working hard" will stop being a valuable thing due to AI.
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> Sorry that's no realistic. People start businesses, including law firms, all the time with little to no capital.
You're clinging past: what you is true when human capital counts for something, but what happens when it doesn't? Where the party who can spend the most tokens on the case wins (or has a much greater chance of success)?
Law might not be the best example of that, but (under current trends) a lot of areas will be.
> Your asserting AI makes the economy more capital intensive, when I think you'll see in practice it's the opposite.
You're claiming AI will make the economy more labor intensive? Huh?
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In the same way that you cannot compete against Ford at making cars without capital because Ford used their capital to automate manual labor at prices and speeds you'll never be able to reach.
"Intellectual" jobs, that require thought were yet spared, as the only way to use capital for that was just to pay for more meat: see Accenture, CapGemini, IBM, etc. You could carve yourself a spot for some people because it was hard for this capital to reach them. Now that AI, a literal machine that automates thought, is here, the costs for reaching bumfuck nowhere to take the clients away from you has dropped drastically for them, but not for you. They get economies of scale, already established patterns, tools, internal databases. You're starting with hopes, dreams and a $20 Claude sub that runs out at 10AM.
There is not infinite need for lawyers, there being more lawyers does not create more legal opportunities and cases past a certain point, and you're then dependent on other things like there being enough judges.
Robots transformed capital into manual actions and killed most manufacturing jobs save for precious few experts or things that are too expensive to automate still. AI will transform that capital into intellectual labor and crush you, take all opportunities away from you.
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It's ok. AI will have replaced most VCs by then and increase the efficiency of capital allocation. The right people will get funded, competition will work it's magic, and consumers will benefit mightily. Nobody's profit margins are safe.
Of course, who knows. There's always another angle you can look at this from
So you’re saying banks (who can loan new money out of thin air) will end up being the winners of all this.
There's definitely going to be cheap or open source models
> There's definitely going to be cheap or open source models
What makes you think your "cheap or open source model" running on your piddling desktop cluster will be able to complete against a SOTA one running in a billion-dollar datacenter?
It's a cyberpunk fantasy. It won't work out that way.
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Eventually AI-run banks will refuse credit to non-AI customers, directly or indirectly
It's nice to know they picked up their training data's penchant for racism in loans.
The price of their work will go down and it might not be economical to do it at all. Theirs skills (as also many IT skills) will not be needed at that scale. In the same way as typing on a typewriter was a skill that gave economic opportunity not so long time ago. Now everything is an email and part of it is speech to text. When something becomes a commodity, the skilled providers need to find something new to sell on the market.
About the law firms, part of the job of a law firm is to give the corporate employee a "guarantee" that he won't be held accountable for doing something legally stupid. So a new lawyer is at great disadvantage if he don't have the contact he has build trust with. From a freind's law company with 50+ lawyers I know that junior lawyers fresh from uni need at least 4-5 years to build their client base. Then, they can leave and start their own taking part of that client base with them. This limits the number of people who can start their own company and most of them won't risk it in the age of AI, because it will be sales and marketing that will feed them, not their legal wizardry, especially when tasks like "check this agreement" won't be billed at the current insane rates.
Law firms are already limited by sales and marketing, and I believe the concept of ‘legal wizardry’ is misplaced. There’s almost nothing one law firm can do that another couldn’t do just as well. The only thing clients want are the ‘you don’t get fired for buying IBM’ factor and asking ‘how high’ when they say jump. The first is all based on cultivating an image and that’s just marketing and sales, and the second is just pure workaholic-fueled hustle.
Great example. Typewriter skill is computer typing skill. You no longer have to return the carriage. The typing is the same. It's not obsolete.
> I foresee a wave of entrepreneurship coming.
why would anyone pay anyone else for anything when they could just get an AI to do it? any service would now be worthless, there will be people with hardware and people without. 3 futures:
one where the hardware is shared.
one where it is not.
one where the first person with enough of it kills everyone else.
Why would everyone want to do everything themselves? No comparative advantage at all and infinitely capable robots?
The entire discussion is predicated on the arrival of an AI future where AI can do any human labor at incredibly low costs and all but eliminating the value of human expertise. If getting something done resembles "doing everything themselves" then that future did not arrive.
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The author’s implied argument is that capital control’s the entrepreneurship game already.
There is only 1 top law firm, financiers of law firms have no interest in starting a race to the bottom. Foundation model labs will take a significant portion of the value, the remainder will be captured by entrenched monopolies.
We can take your train of thought further still. If AI ever becomes super good at lawyering, why would we even need law firms and lawyers at all?
We could feed legislation and constitution into the model and have it argue against other lawyer bots in court in front of a judge bot.
Because you need a human lawyer to appear before a jury. AI can fill in forms but not appear in person.
Only a very small percent of cases go before a jury; the vast majority are decided by a judge by himself.
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Responsibility, reputation, reliability, human connection and empathy (ahem lawyers, right…)
Brand value of the ‘prestigious’ law firms will still count for something in the minds of C suite executives (who of course will ensure they themselves are not trampled on by AI). The same dynamic will likely happen with high-powered consulting, big 4 audit/accounting firms and so on, even if inside those companies it’s just a shell of its former self.
Not buying the judge not part. A human being judged by a non-human will be very far in the future. Bots can’t be held accountable. It’s also an “us vs. them”, for some people it’s hard to accept being judged by a different gender, ethnicity, etc. A bot telling you to go to prison? Tough sell.
I can easily see a two tiered justice: a human judge for those who can afford it, and AI judge for rest of us plebs.
Exactly right, it's Porter's Five Forces with Threats of Substitutes and Threats of New Entrants, which means that margins will be compressed massively, which means that being a lawyer will often mean lower wages. The p99() of lawyer wages will probably decline, but the max() will likely increase for the niches that are not adequately covered by AI use cases.
Yeah... Take it even one step further, why would AI companies even sell access at all? They could just run competitor firms directly themselves, and that outcome is really the only way they can ever hope to make ROI, so for sure they'll do it if it ever becomes possible.
Lawyers will be fine they will work with legislators to make it illegal for AI to practice law. Then, even if the lawyers job is mostly presenting the work of a legal AI, they will still be employed. Other knowledge workers will need to wisen up and do the same.
Edit: same for any profession that requires professional accreditation: lawyers, doctors, cpas, professional engineers, etc.
For some reason AI is able to replace engineers, doctors, lawyers but can do CEO’s and PR specialists. (!)
Every time these AI discussions happen, it’s my first thought, they even talk about the 1 person billion $ company concept but for some reason it’s never the CEO’s replaced and it’s never their industry taken over by the 1 person unicorn.
It’s very weird, it’s just obvious that once you are made redundant you just fill the gaps with AI and become the competitor.
Maybe they imagine that they have the X factor(unlike those engineers or musicians that are being replaced) and the people they laid off were low tier players anyway.
It simply doesn’t compute. The only possible way is to AI companies steal all the businesses of everyone and then unless they find a way to run a system where everyone is happy enough and occupied the “permanent underclass” overruns the AI folks and it becomes a public domain and the concept of intellectual property ownership disappears and other forces like vanity take over and after some conflict a brand new society emerges that runs like a cult with self imposed limits so that they can maintain a structure and healthy competition.
In that scenario, the AI owners become rentiers - able to charge as much as the market will bear for brokerage - and everyone else gets to offer their services via said brokerages, which charge the customer the most they can bear, and pay the worker the least.
Any economy of scale - which is, in a way, what allows knowledge economies to exist at all - will accrue to the middleman.
Good news for those able to master manual, craft skills to a degree most cannot. High-end tradespeople, specialist installation technicians and so on. Bad news for everyone else besides rentiers.
> I foresee a wave of entrepreneurship coming. AI will empower more people to provide useful services directly to other people, with less middlemen and menial work, and more direct problem solving.
What services would those be? You already stated the AI will eliminate the need for companies in many areas so I'm not sure how this fits in with that statement.
Here's another train of thought because you don't seem to understand how incentives or even lawyering works.
> then what's stopping all those people you fired from starting new law companies, where AI also does most of the work, and competing with you for the same market?
Your thinking is similar to the someone saying you can use LLMs to "research" stock market edges. The rub lies in knowing what research to do and what inputs to provide.
Big law firms are not big because they create similar outputs and that can be done using AI. They are "big" because they have connections and also know how to create better outputs.
Still to your point:
> I foresee a wave of entrepreneurship coming. AI will empower more people to provide useful services directly to other people, with less middlemen and menial work, and more direct problem solving.
If this was true then what you are saying is every thing is going to be commoditized due to AI. There is no quality difference.
That will drive prices down in the short term and in the long term people will form cliques like "Forum for AI enabled lawyers" or something similar to OECD and drive prices up. Thereby delivering even lesser value for increased cost. Enshittification at its finest. Not exactly the utopia you seem to be picturing.
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but just imagine the brave new world, where a law firm has super-duper-frontier model and you're trying to argue with it in a court with your latest best local oss model (only 6 month behind the bestests ones).
Interestingly, I have a conflict with my municipality. I fed the articles of law and their arguments of why and how they apply to notebooklm and asked it for fallacies. It not only gave me the fallacies in their reasoning, but also an excellent counter argument and motivation why they are interpreting this law incorrectly. The result is now that they are handing over the entire case to an independent third party to evaluate which interpretation is valid.
This isn't any different than paying more for a better lawyer with a lighter caseload instead of using a public defender
So, best make sure the court has a significant internet outage on the day your case is scheduled, while you have your model running in your pocket? :)
By your logic, aren't the entreprenuers also middlemen?
straight to the point. users will do it themselves, thanks to God-like Google Gemini super-app that does everything and owns whole internet.
The best early example of this is that Anthropic is already eating the lunch of all the new “AI security audit” companies. And they were only a few years old.
Those guys certainly thought they were being novel and creative, using AI to disrupt an expensive and labor intensive business model. But now with Claude Security, their own market share is going to be gobbled up before they can even get established.
> what's stopping all those people you fired..
Reputation, (or lack of it) and the big clients that come with it.
Isn't that obvious?
Law firms are useful because they have connections to the prosecution and judges. You can't just open up a law firm without that.
The big picture can be extended to all economic branches, where steady competition drives down profit margins to near zero, like it is the case for eg. grocery chains already. Functioning markets are solving distribution problems and maybe, some day we will even consider something like algorithmic/HF trading not as a margin siphon but as a (public) service of automated distribution. The bigger picture has to go beyond the How/Who into the the Why/When, which opens up the end conditions of profit driven enterprise and capitalism itself.
You realize that the limit of this is that the only people worth existing is the people with capital?
> I foresee a wave of entrepreneurship coming. AI will empower more people to provide useful services directly to other people, with less middlemen and menial work, and more direct problem solving.
Why do I need to buy products/services from this startups when I can just reverse engineer their product and use all my capital to make them?
> only people worth existing is the people with capital? replying to this with my thoughts
IMO The missing link is that, as long as humans still have political power, that is the basis of their economic power under the new system. The reason is that it is a continuation of the dynamic we see now in western decadence - politicians bribe the populace for votes. So on one side you have the market for political support, balanced with the market for capitalist robot operations, on either side of the political arena.
Historically when people had no power they held violent riots to reassert that they do. Happened as recently as Jan 6 2021 (unsuccessfully that time).
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What exactly do you mean by “politicians bribe the populace for votes” ?
> IMO The missing link is that, as long as humans still have political power, that is the basis of their economic power under the new system.
It's because of this Big Tech is busy undermining the basis of democracy, isolating people in bubbles, poisoning political discourse with slop and pimping would be autocrats. They want to strip political power from common citizens, turning toward sefdom.
> I foresee a wave of entrepreneurship coming
I foresee Claude etc being able to do much of that on a self-serve basis. The entrepreneurship you mention to me looks exactly opposite to what you are describing - a middleman between the customer and the product, which is offered by a third party. In my mind that’s why they launched this deployment company for example, to do just that in house as well
I agree in the short term. But in the long term, the owners of the compute will become disgustingly rich without a wealth tax, nationalization, or local AI becoming competitive and ubiquitous. There are still problems to solve; the alternative is an absolute oligarchy.
what do you mean short term? We aren't even in the short term yet (has the AI revolution truly begun?) and the owners of compute are already disgustingly rich.
I agreed that AI will enable entrepreneurship but yes everyone will continue to lose ground to the owners of compute.
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