An example of how contract playbooks designed by lawyer experts can be applied to commercial contracts using GenAI.


As the revolution in large language models (LLMs) makes its way into new startups and applications, would-be customers ask: How is my private data protected? Can commercial AI providers use my input data to train their models? The emergence of retrieval augmented generation (RAG), which can inject private data into prompts, has made this an urgent issue, particularly for companies building applications on top of LLMs since they often use those services on behalf of their customers. 

The big worry is that intellectual property, trade secrets, other sensitive information, or private information is unknowingly leaked to the public via an LLM’s future output for a different customer. Here is a sample nightmare scenario: Continue Reading Fine print face-off: which top large language models provide the best data protection terms? (352)


The summer of our discontents


Two months ago, if you prompted Version 3 of the AI-art generator MidJourney to generate depictions of an “otter on a plane using wifi,” you were rewarded with the nonsense in the left panel of our lead graphic. A month later, Version 4 could take the same prompt and render, in seconds, multiple detailed drawings that are likely beyond 80% of the population’s imagination and certainly beyond 99.9% of the population’s acumen at illustration (above right panel).

Imagine what our new year will bring.

This matters. And we shall return to our wifi-enabled Mustelidae further down.

This lengthy essay has a lengthy preview essay authored by CSO Casey Flaherty. See Post 347. These two essays reflect nearly everything we are learning through our industry meetings. Although the act of writing is a crucial step in crystalizing our thinking for ourselves and our clients, we’ve done our best to make these essays enjoyable for readers.Continue Reading LexFusion’s Second Annual Legal Market Year in Review (348)


Winter is coming and many legal departments will be left in the cold.


Let’s get a difficult conceptual issue out of the way. This is a long post that some might construe as a criticism of large corporate legal departments. It’s also a preview of LexFusion’s Second Annual Legal Market Year in Review. See Post 280 (First Annual Review). So it’s fair to ask, “why is LexFusion’s Chief Strategy Officer spending so much time delivering a difficult set of truths to his company’s largest category of customers?”

My answer is two-fold. First, the LexFusion model does not work over the long run, or nearly as well as it could, unless we are helping solve significant operational and strategic problems. See Post 203 (discussing LexFusion business model). Second, as a lawyer counseling other lawyers, I owe them my honest assessments. And more so than any of my prior legal jobs, the LexFusion perch, with literally thousands of industry meetings per year, lends itself to root cause analysis. Root causes can be difficult to communicate and even more difficult to hear, but they’re also the ground floor of virtually all sustainable solutions.

With two years under my belt at LexFusion, I have more to say than last year. Hence, Bill has been kind enough to publish this preview essay. Taking advantage of the elongated Holiday weekend, tomorrow we’ll publish our co-authored Second Annual Legal Market in Review. See Post 348. Many thanks for your readership.Continue Reading Preview of the LexFusion Second Annual Legal Market in Review (347)


Legal technology is slowly becoming core to the legal business. It’s time to commit to a cross-functional team approach.


In the legal profession, attorneys with specialized subject matter expertise (e.g., discovery, trial work, corporate transactions, appellate, regulatory, and many others) provide tremendous value to their clients.  Similarly, technologists supporting the legal profession typically include accomplished programmers, skilled engineers, application experts, integration specialists, security ninjas, and the like. In both disciplines, specialized expertise is incredibly valuable.   

The premise of this post is that individual capabilities and excellence (either legal or technical) standing alone are not enough to ensure long-term, sustainable success.  No superstar technologist or lawyer is equipped to do it all, as there are too many specialties and functional roles which need to be filled.  Rather, a better approach is to construct team-based, cross-functional units that offer greater operational efficiency while building in layers of redundancy that reduce the potential for surprises, errors, or disruption.  Cf Post 323 (Patrick McKenna’s “rules of engagement” for high-performing legal teams).
Continue Reading The expanding role of technology in the law firm business model (338)


“Firms outside the Premier and Championship leagues are playing a different sport.” Thus, the winning strategies are different.


Jae Um, in her bracketing exercise for The American Lawyer magazine, arrays the 2022 AmLaw 100 based on the structure of the English football league system. At the top are 22 firms in the Premier League. Next is the Championship League, with 23 firms focused intently on getting promoted to Premier.  The third group is “Everybody Else,” which includes all the corporate law firms playing in lower-tier leagues.

Yet, as Jae Um pointed out during her visit to my Law Firms class, “it’s a mistake to extend the soccer metaphor to all 300 US/UK law firms that are doing significant amounts of corporate legal work.”  Jae explains that Premier and Championship League firms have some combination of practice areas (type, quality, depth), sector focus, and geographic footprint that enable them to attract price-insensitive work from the world’s largest and wealthiest clients. See Part II (332) (discussing market power of these firms).

Jae continues, “The 250+ firms outside the Premier and Championship leagues are playing a different sport.”
Continue Reading Learning about law firms, Part III: Innovation at “Everybody Else” firms (335)


Lawyers are coming around to the “why” for transformation, but struggle with the “how.” That’s change we can work with.


[Editor’s note:  To keep things fresh, Anusia is periodically handing her NewLaw Fundamentals baton to other provocative change agents in her network.  This month, we are pleased to welcome Anna Lozynski, who, as General Counsel of L’Oréal in Melbourne, Australia, led a large and successful transformation of the company’s legal function.  See “2019 In-House Leaders,” Australasian Lawyer.  Since January 2021, Anna has been in demand as a legal Innovation consultant, tech advisor, influencer & freelance GC. As evidenced by today’s essay, Anna is one of the legal industry’s most persuasive voices for change. wdh]


In 2015, when I pioneered the implementation of legal technology as a General Counsel and self-taught Legal Operations aficionado at the world’s leading cosmetics company, the prevailing questions in the legal industry being posed by skeptical legal lips were “Is Innovation hype?” and “Is it a lawyer’s role to innovate?”

Swipe forward the better part of a decade, in this post-pandemic world, we are observing a plethora of socioeconomic shifts. Many businesses face unprecedented change and guiding the organization and the legal department through this period of transformational change can feel like an oversized ask.
Continue Reading Out with the old, in with the … bold? (331)


Four key elements: caps on total liability, exceptions to cap, limitations on type of damages, and exceptions to limits.


In recent posts, I have postulated that commercial contracting is on the following path of evolution:

  1. Reliable data as to what is market for key contracting terms will become readily available as utility models, powered by large data sets and AI, become prevalent. See Post 225 (“Can contract analysis operate like a utility?”).
  2. Companies will look to remove friction from their businesses by aligning their contract terms (and negotiating practices) with market, with some companies offering better-than-market terms in an effort to achieve competitive advantage. See Post 211 (“Competition based on better commercial contract terms”).
  3. Moving to market terms will lead to contract standardization, less contract complexity, and significant returns to the companies that adopt this approach, benefitting the economy as a whole.  See Post 228 (“The cost of contract complexity”); Post 236 (“Case study: impact of AI and Big Data on low-risk contract negotiations”); Post 292 (“The emergence of data-driven contracting: notes from the field”).

The critical foundation for this evolution is that all parties to a negotiation have reasonable access to information regarding what constitutes market.  (For a discussion of the problems associated with information asymmetry, see the works of Joseph Stiglitz.)
Continue Reading What is “market” for limitation of vendor liability? A look at the data (322)


An effort to close the communication gap between legal technologists and the lawyers and called legal professionals they serve.


This post is for lawyers and allied legal professionals who are not legal technologists but want to understand some of the basic principles of constructing and operating an effective litigation management system.

The development of legal profession software —more specifically the forging of sophisticated litigation matter management systems, has been one of my core vocational functions for a period of time far longer than I wish to admit.  See Post 108 (discussing my initiation to legal in the legal department of Bristol-Myers Squibb).   It is particularly important to master and adopt advanced software of this nature when attempting to manage some of the more expansive civil litigation issues of our time (e.g., Roundup, Juul)
Continue Reading Best practices for effective litigation tracking systems (316)


An emerging role in legal tech companies that ties together sales, marketing, and customer success.


At Legal Evolution, we often return to the above “five stages of evolution” graphic as a reminder that the legal industry has entered a period of profound tumult and uncertainty.

The tumult is driven by the cost, quality, and service delivery advantages of systematized & packaged legal solutions, which has set off a gold rush in legal tech. See Post 255 (Zach Abramowitz tracking legal tech investment).  The uncertainty is driven by the need for new business models combined with the lack of established, sales channels that enable end-users to buy with confidence.  Cf Post 279 (Jae Um observing that legal vertical is composed of multiple markets that are both fluid and segmented in nonobvious ways).

Well, what about solutions—is anything on the horizon?
Continue Reading How Chief Revenue Officers are making legal tech better (284)


An honest and candid assessment of corporate legal, circa 2021


Several months ago, before we had even completed our first year of operations, Bill invited us to write a legal market year-in-review.  His reasoning was simple—our business model entails a lot of listening.  Over the past twelve months, we heard the hopes, dreams, and fears of 240 law firms and 327 law departments (corporate legal) spread over 2,600 meetings.

Perhaps you’re anticipating a conversation about what’s hot in Legal Tech and NewLaw.  And back when we accepted Bill’s invitation, that seemed like a logical direction.  Yet, much to our own surprise, we find ourselves writing a year-in-review essay that focuses on the primacy of culture and cultural adaption.
Continue Reading LexFusion’s Legal Market Year in Review (280)