Thought Leadership

Assessing the Accuracy and Quality of Answers from Your Legal AI Tool

cassieq — Thu, 29 Aug 2024 19:01:00 GMT

Accuracy and quality are key components of sound legal research. Learn how to assess the accuracy and quality of answers from your AI tool.(read more)

5 Keys for Monitoring Antitrust Compliance: A Guide for In-House Counsel

beng — Wed, 28 Aug 2024 13:00:00 GMT

U.S. District Judge Amit Mehta fired the latest shot in the recent acceleration of U.S. antitrust enforcement August 5 with a dramatic ruling that Google has violated federal antitrust law by monopolizing the market for internet search.

“Google is a monopolist, and it has acted as one to maintain its monopoly,” wrote Judge Mehta, finding that Google violated Section 2 of the Sherman Antitrust Act. “Importantly, the court also finds that Google has exercised its monopoly power by offering supra-competitive prices for general search text ads. That conduct has allowed Google to earn monopoly profits.”

A second phase of the proceedings will determine the remedies to Judge Mehta’s ruling. Google has vowed to appeal the decision.

DOJ Keeps Big Tech Antitrust Cases Coming

The ruling was the first decision holding a major technology company liable for antitrust violations in a government action since the landmark Microsoft case that settled in the early-2000s. The immediate global reaction to the Google ruling has brought into focus the escalation of federal antitrust enforcement strategy in the world of Big Tech.

“A backlash against powerful tech companies is reaching a fever pitch in the U.S., as enforcers with the U.S. Department of Justice and the Federal Trade Commission now have pending lawsuits accusing Apple, Amazon, Google and Meta of monopolizing key digital markets,” reported Law360.

The news service noted that “state-level enforcers have gotten in on the action as well,” either by joining federal enforcement actions or bringing cases of their own.

The resurgence of aggressive antitrust enforcement strategy should prompt in-house counsel to recalibrate their risk profiles and review their antitrust compliance programs. Having a comprehensive antitrust compliance program in place is not enough; it is also essential to have an effective system for monitoring the implementation and effectiveness of the program.

Monitoring specific compliance activities ensures the success of a company’s antitrust compliance program by checking on the health of that program and evaluating its effectiveness. LexisNexis® published a practice note, “Antitrust Compliance: Program Monitoring,” by Douglas Tween, an antitrust partner at Linklaters LLP and Practical Guidance contributing author for LexisNexis. The practice note explains what in-house counsel should do after they have established an antitrust compliance program.

Mr. Tween explains that the key design elements of an effective antitrust compliance monitoring system include frequency of monitoring, the team involved and controlling awareness of the monitoring activity. To establish a smart monitoring system, he highlights the importance of five key elements.

5 Key Elements for an Effective Antitrust Compliance Monitoring System

Nature of your business

As with other facets of the compliance program, the monitoring system must be specifically tailored to your company’s unique circumstances and history. In planning your monitoring system, consider the nature of your business and industry, the size of your workforce, the integration of existing monitoring systems, the company’s structure and culture, and the information gathered based on your own antitrust risk assessment.

Industry Best Practices and Legal Environment

Next you should consider the legal environment in which your company operates. Review the websites of the antitrust enforcement agencies in the jurisdictions where you do business and determine whether they have issued any industry-specific guidelines affecting your company. If so, you will want to build into your monitoring tool the questions that help determine whether the company is acting in a manner consistent with those agency guidelines. It can also be useful to look at industry best practices regarding monitoring compliance programs and then implement any such standards into your own monitoring system.

Relevant Data Points to Monitor

The next element is to identify relevant data points to monitor (e.g., employee behaviors, company practices, etc.) that will provide you with appropriate insight into the effectiveness of your program. These data points will tell you whether employee behaviors and company conduct correspond to the stated aims of the existing antitrust compliance program. For instance, you might want to track factors such as antitrust training attendance rates and online antitrust compliance course completion rates—or measure other antitrust controls that are part of the compliance program.

Person in Charge

An antitrust attorney who works either as the company’s outside counsel or who is employed as an antitrust lawyer by the company itself must take the lead in any antitrust compliance program monitoring. Only an antitrust specialist will be able to perceive the antitrust implications of the company’s program and any deviations by its employees.

Frequency of Monitoring

Generally, antitrust compliance program monitoring should take place annually as this strikes a balance between diligence and cost. The recommended frequency for monitoring may vary depending on your unique business situation and conditions within your industry. For instance, you may need more frequent monitoring if there is high employee turnover, recent changes to a company’s compliance program or an influx of a substantial number of new employees following an acquisition. You should also conduct more frequent monitoring if your company has been the subject of adverse antitrust agency actions.

Antitrust Compliance Programs for In-House CounselꟷPractical Guidance Resources in Lexis+®

The Lexis+ experience offers a breadth of Practical Guidance antitrust law resources to help guide in-house counsel with developing and maintaining effective antitrust compliance programs. Content includes:

Antitrust Compliance Resource Kit
Antitrust Compliance Policy Drafting and Implementation: How-To Video
Antitrust Compliance Policy Manual
Monopoly Power Antitrust Risk Assessment Checklist

Get a free trial of Practical Guidance within Lexis+.

All of these resources are accessible to in-house legal teams via the Lexis+ General Counsel Suite, which provides a vast collection of legal resources, breaking business and legal news and Practical Guidance content.

Get more information or a free, 7-day trial of the Lexis+ GC Suite.

IP and Gen AI Technologies: Essential Guidance for In-House Counsel

beng — Wed, 14 Aug 2024 13:00:00 GMT

The proliferation of generative artificial intelligence (AI) technology has taken most of the oxygen out of the room in corporate offices. Virtually every major company has aggressively investigated how they can either develop Gen AI tools, implement Gen AI tools and/or protect themselves from the impact of commercially available Gen AI tools.

For in-house counsel, the challenges are especially acute. Their organizations want to leverage Gen AI technologies, but they face important challenges related to managing intellectual property (IP) risks. These include a new legal landscape that is being created daily by Gen AI involving patents, copyrights, licensing and trade secrets.

“While artificial intelligence systems have existed for decades, recent systems — such as ChatGPT, Stable Diffusion, Claude, Gemini and Grok — have brought AI applications and their implications into public view,” reported Law360. “Regulatory capture, deepfakes, algorithm bias and black box decision making are just a few of the problems posed by AI today that are bubbling to the surface. Foundationally, questions remain as to the ownership of content created using AI.”

In-house counsel will be expected to lead the charge for their organizations when it comes to navigating this rapidly evolving framework around Gen AI and IP law.

USPTO Guidance on AI-Assisted Inventions: Key Takeaways for Patent Protection

LexisNexis had the opportunity to cover some of these important issues in a recent two-part LexisNexis webinar series, “AI/IP Issues,” in which we explored emerging challenges with protecting patent portfolios and managing licensing provisions (Part 1) as well as a review of current patent litigation and a forecast of where these litigation trends may be headed (Part 2).

One of the important subjects that we addressed is the guidance issued by the U.S. Patent and Trademark Office (USPTO) earlier this year on patents for inventions developed using AI, which makes it clear that “help from the technology does not foreclose getting a patent, but sets standards that will spur litigation and create new obligations for attorneys,” according to Ryan Davis of Law360.

Some of that key guidance from the USPTO includes:

Patents on AI-assisted inventions are allowed

AI-assisted inventions are able to be patented, although the USPTO warns that the “inventorship analysis” should focus on human contributions since patents are intended to function to incentivize and reward human ingenuity. The guidance clearly indicates that AI can be used as a tool, just like any other tool that might be used in a new invention.

Every claim needs a human contribution

The standard that must be met is that humans must contribute to every claim in a patent and that “inventorship is improper” if a patent application includes a claim in which at least one natural person did not significantly contribute to the claimed invention. This requirement will be a central focus for in-house counsel going forward. It will be important to identify a human contribution to every element in order to mitigate the risk of a patent being rejected because a single claim was invented solely by AI.

Patent teams must probe how AI is used

The guidance makes it clear that everyone associated with the submission of a patent application has an obligation to conduct their own reasonable inquiries to ensure the information on the application is correct and to disclose any relevant information about how AI was used in the invention process. In-house counsel will need to collect information from their colleagues about whether and how they used AI and, where necessary, obtain detailed records that illustrate the significance of human contributions to the invention.

Prepare for disputes about human contribution test

The USPTO provides hypothetical scenarios in which AI was used in an invention process and what each one might contribute to the ability to secure a patent. These scenarios spell out that simply making or using an invention suggested by AI does not amount to a significant human contribution, but overall the “significant contribution” test is still a fairly vague standard. This is likely to lead to real-world disputes in the patent office and the courts as we proceed.

View our LexisNexis "AI/IP Issues" webinar on-demand.

Essential AI and IP Resources for In-House Legal Counsel

The Practical Guidance team for LexisNexis has developed a number of valuable resources to give in-house counsel information and tools to lead the charge for their organizations in managing IP risks associated with the proliferation of Gen AI technology. These resources include:

Generative Artificial Intelligence Resource Kit, which aggregates a breadth of practice notes, checklists and templates that are organized by area of practice and updated regularly with new developments;
Artificial Intelligence: Intellectual Property Regulatory Tracker, which highlights recent guidance, decisions and actions taken by the U.S. Patent and Trademark Office and U.S. Copyright Office related to AI; and
Copyright Registration of AI-Generated Works Checklist, which outlines key considerations that attorneys should review when advising whether and how to copyright AI-generated works in the U.S.

All of this information is accessible to in-house legal teams from Lexis+® General Counsel Suite, which provides a vast collection of legal resources, breaking business and legal news, and Practical Guidance content.

Click here for more information about Lexis+ GC Suite or to register for a free 7-day trial.

New Revenue Streams: Time to Start Law Firm Business Innovation

beng — Thu, 08 Aug 2024 13:00:00 GMT

By Geoffrey D. Ivnik, Esq. | Director of Large Markets, LexisNexis

Leaders of America’s largest law firms have decided to move full speed ahead with the adoption of generative artificial intelligence (Gen AI) technology because they see these tools as keys to unlocking greater value for clients and greater revenues for their firms.

More than half of the Am Law 200 (53%) have purchased at least one Gen AI solution and 45% of them are already using it for legal matters, according to the 2024 LexisNexis Investing in Legal Innovation Survey. Moreover, our survey found that three in four (77%) senior lawyers at Am Law 200 firms believe that Gen AI tools will enable them to offer new value-added services to clients, with 54% reporting they are already exploring these potential opportunities.

The pace of Gen AI innovation means that law firms have little time to waste when thinking about how to adopt the technology and — for firms still on the fence — every minute of delay will put them further behind, according to the new report, Gen AI in Law: Unlocking New Revenues.

The risk of analysis paralysis

Unlike previous legal technology developments, where law firms could generally move at their own analytical pace, Gen AI is taking the timeline out of their hands.

“There have not been many points in the last 30 years where a firm would be substantially disadvantaged by a slow adoption,” says Jeff Pfeifer, chief product officer at LexisNexis. “Gen AI adoption is different because there are fundamental advantages that we’re seeing, not only in law but in other vertical industries, that create material differences in the way work is done. And so for a firm that’s slow on this front, they will find themselves in a constant mode of catch-up.”

Industry experts emphasize that the opportunity has not yet passed and there is still time for firms to explore how they can use Gen AI tools — but the clock is ticking and those who get paralyzed by analysis risk lost opportunities to drive revenue growth and being left behind their competitors.

“I do think firms that are on the leading edge are going to see the benefits of it and appreciate the benefits of it more than a firm that is just going to wait another 24 to 36 months to really see how it shapes out before they start to think about implementing,” says James Metzger, chief financial office at Reed Smith.

Start innovation now

The implications for law firms that don’t move fast enough on Gen AI adoption may also become apparent in pricing models for their legal services. Experts warn that these firms won’t be able to compete with firms that can do the same work at a much lower cost thanks to the innovation that comes from Gen AI tools.

“With the billable hour being what it is and not having those efficiencies being created by Gen AI, other firms are going to take two, three, four times as long to do something as firms that have adopted Gen AI can do,” says Krista Ford, director of knowledge, research and information services at Steptoe & Johnson. “Firms that don’t adopt it will not be able to keep up with the volume of work and analysis that firms who are using Gen AI can.”

By taking some of their steps spelled out in the new report, Gen AI in Law: Unlocking New Revenues, and transforming their working practices, law firms of all sizes have the potential to expand into new business areas and thrive in the increasingly competitive world of legal services.

Gen AI tools can help firms innovate and unlock new revenue opportunities, while also improving client service by streamlining workflows and enabling lawyers to dedicate more time to solving their clients’ business problems.

REPORT: Gen AI in Law: Unlocking New Revenues

We interviewed a variety of AI leaders from the legal profession to explore how law firms and corporations that embrace Legal AI can generate new revenues through the use of this technology. In addition to the section of the report we unpacked today, which explores why law firms should start business innovation now to maximize success, other sections of the report include:

An introduction to your new business development tool;
How law firms can seize new opportunities with the right skills in place;
The transformation of unprofitable practices into thriving businesses; and
How Gen AI is accelerating changes to client mindsets when it comes to assessing the value of legal work.

Read the full report now: Gen AI in Law: Unlocking New Revenues.

New Revenue Streams: Transform unprofitable practices into thriving businesses

beng — Thu, 01 Aug 2024 19:00:00 GMT

By Geoffrey D. Ivnik, Esq. | Director of U.S. Large Markets, LexisNexis

Law firm leaders perceive that generative artificial intelligence (Gen AI) technology is going to have a dramatic impact on how efficiently lawyers are able to complete work assignments for clients. The top priorities for law firms using AI-powered tech are all related to efficiency, according to the 2024 LexisNexis Investing in Legal Innovation Survey:

Legal research (57%)
Summarizing documents (53%)
Drafting documents (38%)

These anticipated gains in efficiency have the potential to benefit clients who will receive legal counsel faster, as well as law firms who may be able to expand into new practice areas or even rehabilitate certain practices that have been struggling.

Transform pressured practice areas

The ability to practice more efficiently has law firms eyeing Gen AI’s potential to support their business growth opportunities, according to the new report, Gen AI in Law: Unlocking New Revenues.

A quarter of Am Law 200 firm leaders say using Gen AI for business development reports is a top priority, with 21% saying they want to use Gen AI for real-time comparisons of law across different jurisdictions and connecting AI to organizational data.

“I expect that we’ll see a focus on new lines of business and on advisory services that are proactive, rather than reactive,” says Jeff Pfeifer, chief product officer at LexisNexis.

Gen AI could also help practice areas where margins are under pressure to become more profitable through repeatable process improvements.

“We hear this consistently among the firms that we’re speaking with: they’re looking for ways technologies can make a material improvement in work quality and work efficiency,” adds Pfeifer. “Doing so makes those lines of business more attractive from a margin perspective.”

For example, legal professionals who use Gen AI tools and services from LexisNexis typically free up seven to 11 hours per week, which Pfeifer notes can be used to either follow-up more rapidly on their next tasks or to expand services for other clients.

Clients expecting higher-value work

According to the Gen AI in Law: Unlocking New Revenues report, in-house teams also expect to see Gen AI tools free up their outside lawyers’ time so they can focus on higher value work.

“We don’t look at AI or Gen AI as being replacements to attorneys, but rather tools that augment what those attorneys are able to do with their own time,” says Christy Jo Gedney, senior manager at Liberty Mutual Insurance. “We want our attorneys, whether they’re in-house or outside counsel, to be practicing at the top of their licenses. We want them spending their time doing the things that are impactful, such as building relationships or prepping for trial. Using Gen AI tools will help give them the capacity to spend their time on more impactful matters.”

For example, McGuireWoods is starting to see notable efficiency gains through adopting Gen AI for M&A due diligence by reviewing hundreds of contracts much faster than would be possible with a team of humans.

“The ability to use AI to surgically go into each one of those contracts and extract the information that you need and organize it into a spreadsheet as the first step of diligence can be a huge time saver,” says Peter Geovanes, chief innovation and AI officer at McGuireWoods.

REPORT: Gen AI in Law: Unlocking New Revenues

We interviewed a variety of AI leaders from the legal profession to explore how law firms and corporations that embrace Legal AI can generate new revenues through the use of this technology. In addition to the section of the report we unpacked today, which explores how to transform unprofitable practice areas into thriving businesses, other sections of the report include:

An introduction to your new business development tool;
Adapting to changing client mindsets about how to assess the value of legal work;
How to seize new opportunities with the right skills in place; and
Why law firms should start business innovation now to maximize success.

Read the full report now: Gen AI in Law: Unlocking New Revenues.

Trust me I’m an AI: Winning lawyers will rethink the way they work

beng — Thu, 01 Aug 2024 13:00:00 GMT

By Geoffrey D. Ivnik, Esq. | Director of U.S. Legal Markets, LexisNexis

The transformative nature of Legal AI, generative artificial intelligence (Gen AI) technology trained for the legal profession, is destined to change the way that law firms work — but the firms who will see the greatest benefits from these tools will be the ones that are willing to develop new skills and new ways of thinking with their lawyers.

How should law firms be envisioning the path to this new frontier? According to the recent LexisNexis report, Gen AI in Law: A Guide to Building Trust, it starts with having an understanding of the opportunity legal AI tools present.

“A big part of my job is change management and trying to work through adoption and what that means,” said Krista Ford, director of knowledge, research and information services at Steptoe & Johnson. “Gen AI is a huge leap. It’s like nothing that we’ve seen before — it’s going to change absolutely everything. We’ve been talking about AI for a while, but most of that is machine learning. This is a completely different animal.”

Change management is the key

Firms therefore need to have a robust change management plan in place if they want to successfully adopt Gen AI technology and be certain that lawyers are using it effectively.

In fact, management consulting firm BCG suggests that introducing Gen AI should follow a “10/20/70 Rule”: 10% of effort should be spent on getting the data right, 20% should be spent on AI technology decisions; and the remaining 70% should be dedicated to transforming people and business models.

“Law firms need to ensure that the right training and support for a cultural shift is in place to help professionals who are making the journey to adopt and use these technologies in their day-to-day practice,” says Jeff Pfeifer, chief product officer at LexisNexis.

Investing in training

Building trust in the use of Legal AI tools often requires a degree of hand-holding given that lawyers will be laser-focused on client matters and hitting their billable hours targets, rather than having to spend time changing the way they work.

“If left to manage on their own, the attorneys won’t succeed, largely due to their hectic schedules which leave little room for adopting new tech,” says Peter Geovanes, chief innovation and AI officer at McGuire Woods. “That’s why we’ve committed to what we term as ‘foundational training’ to cover the basics, followed by workshop training a week later that focuses on their specific use cases and aids in their understanding of the tool’s capabilities.”

A big part of the foundational training involves being able to write effective questions for the Gen AI tool to answer — if the prompts they enter aren’t well-crafted, then they may not get the information they are seeking. McGuire Woods has also consulted with its professional liability insurer to put in place mandatory ethics and responsibility training for all of its lawyers on Gen AI use.

Developing new internal skill sets

While all lawyers may need to attain a basic level of AI skills, it is unlikely that all lawyers will need to become AI experts. Rather, AI will simply become another area of technology use in which some lawyers will be stronger than others.

However, as discussed in the Gen AI report, Legal AI adoption may require entirely new skill sets at firms. More than a third of Am Law 200 firms (38%) are planning to hire technologists and AI specialists this year to help with their Gen AI initiatives.

“We see law firms exploring the required resources and skills needed to power these capabilities within their own organizations,” says Pfeifer. “That may mean adding people that are proficient at various data labeling activities or data science work that is necessary to drive the right kind of outcomes from interaction with a generative AI toolset.”

Making trust real

Law firms need to build trust across their organizations to move from the experimentation stage to widespread Legal AI adoption. Right now, 40% of lawyers are on the fence when it comes to trusting Gen AI for legal work.

Firms may just need to be patient in building trust rather than expecting attitudes to change overnight. For lawyers to gain trust in the technology, some experts say it is all about getting as much hands-on experience with Gen AI tools as possible, enabling them to see the benefits up close for themselves.

“Ideally those early experiences create a foundation an individual can build skill and capability on top of,” says Pfeifer. “Leading organizations are helping their lawyers through that process by supporting training and other activities that help make that transition as smooth as possible.”

Gen AI has the potential to change how law firms operate and how lawyers do their jobs. As the head of knowledge management at a top 150 US firm told us, “You can’t escape it, Gen AI is going to become the new normal and people are going to need to get comfortable with it.”

By taking steps to build trust, lawyers will see the benefits of Gen AI — from enabling them work more efficiently to opening new service lines and revenue streams — so they are more competitive, more profitable and more relevant in an increasingly digital world.

REPORT: Gen AI in Law: A Guide to Building Trust

We interviewed a variety of AI leaders from the legal profession to explore how law firms and corporations that embrace Legal AI are building trust in the use of this new technology. In addition to the section of the report we unpacked today, which addresses the importance of rethinking workflow, skills and culture, other sections of the report include:

Key factors that drive trust with Gen AI;
Addressing concerns about accuracy and confidentiality; and
The steps to building trust.

Read the full report now: Gen AI in Law: A Guide to Building Trust.

Climate Risk Management in Insurance: Trends and Takeaways

beng — Wed, 31 Jul 2024 19:00:00 GMT

The insurance industry faces unprecedented challenges due to climate change. According to a report conducted by Ceres Accelerator for Sustainable Capital Markets, as extreme weather events become more frequent and severe, insurers must grapple with the impact on their investments, risk management strategies and overall business operations.

The Highlights

Of the 516 insurance groups who submitted responses, 94% of the largest U.S. insurance companies reported on their risk management processes, 86% on climate strategy, 81% on governance and 29% on the metrics and targets used to help assess climate risks.  

Created through the examination of disclosures insurance companies are making through the National Association of Insurance Commissioners (NAIC) Climate Risk Disclosure Survey, the report is Ceres’ second annual analysis that the company has conducted of major U.S. insurers’ climate risk strategies.

Insights from the NAIC Climate Risk Disclosure Survey

The National Association of Insurance Commissioners (NAIC) has been studying climate change's impact on insurance since 2005. Their continued efforts to collect and analyze data play a crucial role in shaping regulatory policies.

The recent analysis by the NAIC sheds light on how insurers are navigating this complex landscape. Here are the key takeaways:

Few insurers significantly alter their investment strategy due to climate change impacts on their investment portfolios. However, this area warrants further exploration as climate risks evolve.

Over half of all insurance companies engage in enterprise-wide climate risk management. This proactive approach reflects the industry’s growing awareness of the need to comprehensively address climate-related risks.

Most insurers, across various lines of business, actively engage in internal greenhouse gas management. This includes measuring emissions, setting reduction targets and integrating sustainability practices.

Powerful Resources for Insurance In-House Counsel

Insurers are increasingly recognizing the importance of climate-related activities. From risk assessments to sustainable investment practices, the industry is actively adapting to the changing climate landscape.

Insurers can navigate the impacts of the rising climate event risk with key Practical Guidance resources from LexisNexis®:

Navigate the legislative and regulatory efforts to mitigate climate change effects and discover how climate change influences workers’ compensation with The Impact of Climate Change on Workers and Employers: The California Experience.
Understand the climate change issues that might arise under a standard builder’s risk insurance policy for project owners, contractors and investors involved with renewable energy projects with Impact of Climate Change on Coverage under Builder's Risk Insurance Policies for Renewable Energy Projects.
Discover the emergence of parametric insurance with an outline of its origins, the operation of claims payment and trigger events and learn more about its U.S. and global coverage with Parametric Insurance: Addressing the Gaps in Traditional Coverage.

Get additional resources tailored for insurance in-house counsel with a 7-day free trial of Lexis+® General Counsel Suite.

Buying Assets in Bankruptcy: 10 Essential Tips for In-House Counsel

beng — Wed, 31 Jul 2024 07:00:00 GMT

Petersen Health, an Illinois-based company that operates nursing facilities in the Midwest, filed for Chapter 11 bankruptcy protection in March 2024. Within one month, the company had received 20 bids from potential buyers seeking to purchase various Petersen assets out of the bankruptcy proceedings and, on July 3, Law360® reported that U.S. Bankruptcy Judge Thomas Horgan granted permission for them to accept the highest bid for their skilled nursing facilities.

As noted in our post earlier this month, U.S. corporate bankruptcies have returned to a more normal level of activity this year, following a two-year decline in Chapter 11 bankruptcy filings in the immediate post-COVID period. Some bankruptcy experts forecast this trend will continue.

“A confluence of economic factors is expected to challenge companies in 2024, with a range of industries under enough pressure to potentially see a rise in bankruptcies this year,” reported Law360.

In-house counsel need to be prepared for the emergence of strategic opportunities for their organizations to acquire strategic assets that may become available during other companies’ Chapter 11 bankruptcy proceedings. Court approval must be obtained for asset sales under Section 363 of the Bankruptcy Code, which means that in-house counsel may be called upon to advise their executive teams on the process for purchasing assets—that counsel includes communicating key benefits, disadvantages and potential roadblocks.

10 Key Considerations for Buying Assets in Bankruptcy Section 363 Sales

The Practical Guidance team at LexisNexis® published a Buyer’s Considerations in a Section 363 Sale Checklist, which can be used to guide in-house counsel who are assisting potential purchasers of assets in bankruptcy proceedings. Here are 10 tips excerpted from that checklist:

Public Process — The terms of the sale will be publicly disclosed as the debtor must file the asset purchase agreement and related sale pleadings on the bankruptcy docket to obtain court approval.
Auction — A Section 363 sale is generally implemented through a public auction rather than through a private sale. Prospective purchasers should be aware that they could be outbid at the auction.
Fast Timeline — Bidders for assets in a bankruptcy sale are often faced with formal, court-mandated bidding procedures that impose strict (and often short) deadlines for submissions of bids, as well as for the auction, the court hearing and the closing of the sales.
Multiple Parties — A Section 363 sale will usually involve other parties who seek to influence the sale and/or wish to have a seat at the negotiating table. This could include the Creditors’ Committee, the lenders and other parties asserting liens on the assets to be sold.
Sale Free and Clear — An asset may be sold free and clear of any interest in such property of an entity other than the bankrupt estate if any one of the statutory conditions of Section 363 is satisfied. This provision can provide purchasers with broad protection from third-party claims.
Rejecting Contracts — The buyer is not bound to all of the debtor’s contracts as the debtor can generally reject any executory contracts or unexpired leases that are not purchased. In most cases, this relieves the debtor (and the buyer) from future performance.
Fraudulent Transfers — Buyers purchasing assets under Section 363 can avoid the risk that a court will void the transfers to the purchaser under a fraudulent transfer claim.
No Collusion — Section 363 governs collusion and provides that for the avoidance of sales where there was an agreement between potential bidders that controlled the price at bidding. Counsel representing prospective purchasers should be advised of these rules.
Credit Bidding — Credit bidding is the right of a secured creditor to bid at the auction for the purchase of the secured creditor’s collateral using the amount of the debt that is owed by the debtor to that creditor, as opposed to paying in cash or some other form of value. Secured parties that “credit bid” have a significant advantage against other interested bidders.
Sales to Insiders — Asset sales in bankruptcy proceedings will be subject to a stricter scrutiny standard and entire fairness tests usually associated with insider transactions. It may be advisable to have an independent fiduciary appointed to review and negotiate for the debtor so that the transaction can be conducted at arm’s length.

Bankruptcy Asset Sales: Practical Guidance for In-House Counsel

In-house counsel need to stay informed of the key legal issues involved with the sale of assets as part of a Chapter 11 bankruptcy plan so they are prepared to advise corporate executives and boards of directors of emerging strategic opportunities. LexisNexis offers a number of Practical Guidance resources to assist with these insights, including the Bankruptcy Transactional Resource Kit and the Asset Acquisition Resource Kit.

These resource kits include detailed practice notes, templates and checklists to provide in-house counsel with the practical resources they need. Get a free trial of Practical Guidance from LexisNexis.

All of these news, analysis and practice resources regarding Chapter 11 bankruptcy filings are accessible from the Lexis+® General Counsel Suite, providing in-house counsel with a vast collection of legal resources, breaking business and legal news, and Practical Guidance content.

Get a free 7-day trial of Lexis+ GC Suite.

New Revenue Streams: Getting the right skills in place is essential

beng — Thu, 25 Jul 2024 19:00:00 GMT

By Geoffrey D. Ivnik, Esq. | Director of U.S. Legal Markets, LexisNexis

The rising adoption of generative artificial intelligence (Gen AI) technology in the legal profession is having an impact on all areas of law firm operations, including staffing decisions.

Nearly four in 10 (38%) of senior Am Law 200 lawyers say their firms are planning to hire technologists such as data scientists or engineers to support their Gen AI programs, according to the 2024 LexisNexis Investing in Legal Innovation Survey.

According to the new report Gen AI in Law: Unlocking New Revenues, law firms are quickly discovering the importance of developing the right skills to capitalize on the potential of Gen AI to take advantage of new revenue opportunities.

Seize the opportunity to develop necessary skillsets

Adopting Legal AI technology, Gen AI tools trained for the legal profession, means that lawyers will need to be proficient in “prompting” the tools so they can interact with the technology and use it effectively. While lawyers may not need to become AI technologists, firms should increasingly expect lawyers to have some degree of understanding of how to use these tools when they are making new hires, according to the new report, Gen AI in Law: Unlocking New Revenues.

In fact, another key reason for firms to accelerate their Gen AI programs is to help them attract the best new law school graduates.

“What we’ve seen when hiring new associates out of law school is that during the recruitment process they’re asking questions about legal tech and legal AI, and if your firm is not using these tools, you’re viewed as old-fashioned, stodgy, and maybe a place that the best candidates don’t want to work,” says Peter Geovanes, chief innovation and AI officer at McGuireWoods.

Industry leaders are also quick to point out that lawyers are in the business of providing legal counsel, not in the IT business, and other skillsets will need to be developed internally for Legal AI tools to flourish.

“Firms will be looking for people who will be able to integrate the tools into their day-to-day activities,” says Tod Cohen, a partner at Steptoe. “Five years ago, we wouldn’t have guessed that Zoom would be used as much. Yes, there was a pandemic. But if you don’t use Zoom or you don’t use any type of video conferencing, you’re not really doing any work in most instances, so it’s really just about trying to get Gen AI integrated without any effort by the attorneys.”

Law firms may also increasingly lean on non-fee earning lawyers or other support staff, such as knowledge management attorneys or librarians, to advance their AI use.

“There is a need for specialist searching and research that the tools certainly will enhance, so there will be people using Gen AI tools to assist in research and librarians are going to have a large role in this,” says Cohen.

Mitigating risk from Gen AI

As with all new technologies, there are a variety of potential risks that law firms need to be aware of and mitigate with respect to Gen AI tools. According to the Gen AI in Law: Unlocking New Revenues report, a good place to start is by reviewing professional liability insurance to determine whether the carrier will include AI-assisted work in their coverage.

“We have seen examples in the U.S. of certain insurance carriers making proactive statements about what’s covered and not covered, but the field of insurance is still evolving as it learns and understands what the key risks are,” says Jeff Pfeifer, chief product officer at LexisNexis. “While we have seen a few insurance companies suggest that AI-based product work is not covered in malpractice insurance, it is by far the minority position.”

Aside from professional liability questions, there are general risk mitigation strategies that firms should put in place to safeguard AI use. One key guideline is to ensure client data is not being shared by the AI system.

For example, to help firms mitigate risk and share the precautions with their clients, LexisNexis has made data security and privacy for customers a priority by opting out of certain Microsoft AI monitoring features to ensure OpenAI cannot access or retain confidential customer data.

REPORT: Gen AI in Law: Unlocking New Revenues

We interviewed a variety of AI leaders from the legal profession to explore how law firms and corporations that embrace Legal AI can generate new revenues through the use of this technology. In addition to the section of the report we unpacked today, which explores how law firms can seize new opportunities with the right skills in place, other sections of the report include:

An introduction to your new business development tool;
Adapting to changing client mindsets about how to assess the value of legal work;
The transformation of unprofitable practices into thriving businesses; and
Why law firms should start business innovation now to maximize success.

Read the full report now: Gen AI in Law: Unlocking New Revenues.

Trust me I’m a legal AI: how to conduct a Gen AI pilot at your firm.

beng — Thu, 25 Jul 2024 13:00:00 GMT

By Geoffrey D. Ivnik, Esq. | Director of Large Markets, LexisNexis

The largest law firms are moving the fastest with investments in Gen AI tools. Our 2024 Investing in Legal Innovation Survey found that 43% of firms in the Am Law 200 have set aside a dedicated budget for Gen AI tools, as compared to just 19% of other law firms who report they have established a Gen AI budget.

At the same time these firms are carving out resources for future investment, forward-thinking law firms are testing the Gen AI waters. They are experimenting with specific ways the technology can change the way their lawyers work and how they deliver legal services to clients.

According to the recent report, Gen AI in Law: A Guide to Building Trust, a key strategy for introducing Gen AI tools is to conduct pilot projects in which the firm studies appropriate use cases and spends time figuring out how Gen AI can be applied to their practice areas and workflows.

Legal transformation experts whom we have featured previously on this blog have suggested that 2023 was the year for proof of concept for Gen AI and that 2024 is the year for implementation with the right sort of adoption strategies and pilots. They caution that getting the pilots right internally is a challenge because lawyers need to participate in those test projects and see for themselves how they can benefit from the use of the technology.

“We have seen firms do wide-scale documentation of various use case opportunities, and then isolate opportunities where the value is perceived to be the highest,” says Jeff Pfeifer, chief product officer at LexisNexis. “We see organizations that go through a rigorous review first generally do better later when they actually implement the technology.”

Pfeifer notes that it is advisable to start with small, quick experimental projects — rather than wide-scale application of the technology — so the firm can learn from what goes well and identify where adjustments need to be made.

Law firms that are rolling up their sleeves with Gen AI pilots are also discovering that building trust in Gen AI requires including their attorneys on AI programs under consideration. This ensures that the technology is relevant to them and can add value to their day-to-day working practices.

“Our technology team has really been engaged with the attorneys on the introduction of generative AI tools and determining which ones make sense for the firm to invest in and which ones don’t make sense,” says Tod Cohen, a partner at Steptoe & Johnson.

Steptoe is then taking an approach of identifying small pockets of individuals within the firm who are likely to be enthusiastic adopters of Gen AI and asking them to test the technology.

“We also message this in practice group meetings with our department heads and our executive committee, and then we have those trusted leaders talk to individuals in their groups to build that trust, because a lot of it has to come from the top,” says Krista Ford, director of knowledge, research and information services at Steptoe.

Some firms, such as Reed Smith, are running multiple pilot projects to test different AI tools and see which ones end up working best in practice — both internally and externally for clients.

“We’re taking a ‘thoughtfully progressive’ approach to validate the maturity and usefulness of each system versus locking on to only one vendor’s AI technology,” says James Metzger, chief financial officer at Reed Smith. “We don’t want to place all of our bets in one basket at this point.”

As with all legal technology programs, not all lawyers will be instant converts — and some may even be openly resistant — but the experts advise it is not necessary to win unanimous support for the introduction of Gen AI tools. As the technology is deployed and the results speak for themselves, any resistance will decline over time.

REPORT: Gen AI in Law: A Guide to Building Trust

We interviewed a variety of AI leaders from the legal profession to explore how law firms and corporations that embrace Legal AI are building trust in the use of this new technology. In addition to the section of the report we unpacked today, which focuses on steps for building trust in the use of Gen AI, other sections of the report include:

Key factors that drive trust with Gen AI;
Addressing concerns about accuracy and confidentiality; and
Rethinking workflow, skills and culture.

Read the full report now: Gen AI in Law: A Guide to Building Trust.

Attention Buyer: Not All Legal AI Models Are Created Equal

Sherica Celine — Thu, 25 Jul 2024 12:00:00 GMT

By: Simon Weierman

A 2024 LexisNexis survey of managing partners and C-suite leaders at major law firms and Fortune 1000 companies found that nearly all legal executives (90%) expect their investment in Generative Artificial Intelligence (Gen AI) technologies to increase over the next five years. The survey also found that roughly one-half (53%) of Law360® Leaderboard Pulse firms have already purchased Gen AI tools including both general purpose and legal practice specific AI solutions

In addition to the variety of general-purpose AI tools available to businesses and consumers, the past year has also seen the emergence of commercially available Legal AI tools — Gen AI tools tailored specifically for the legal profession. Many legal professionals are trying to figure out how they can take advantage of the opportunities afforded by this new technology while minimizing the risks that are well-documented in the industry.

We recently published “The Definitive Guide to Choosing a Gen AI Legal Research Solution,” a free buyer’s guide that details what law firms and in-house legal departments should look for so they can select the most appropriate solution for their organization. Over the course of the next several weeks, we will be publishing a series of blog posts that are drawn from the five pillars addressed in the buyer’s guide.

We kick off the series today by unpacking the importance of the Gen AI model itself. Before proceeding on the journey to acquire a Legal AI solution, it’s important to understand that not all Gen AI models are created equal.

Strengths and Weaknesses of LLMs

There is no need to become an expert in software engineering in order to be a savvy buyer of a Legal AI solution, but it does help to learn a bit about Large Language Models (LLMs) — a type of AI that are trained on vast amounts of data to mimic human intelligence — and how they operate.

The fact is that different LLMs have their own strengths and weaknesses. Here are a few key differences between some of the LLMs used to power various Legal AI solutions you will find on the market:

Architecture — Different underlying “neural network architectures” will impact capabilities, which is why some LLMs are better at tasks such as translation or summarization.
Size — LLMs can range from millions to trillions of parameters, so larger models are generally more capable while smaller models can be more efficient.
Training Data — Models trained on legal data will have different strengths than those trained on general purpose text, an important consideration for law firms and in-house legal teams.
Fine-Tuning — LLMs can be further refined on niche datasets to improve their capabilities in specific domains.
Public vs. Proprietary — Open source LLMs allow for greater transparency, while proprietary models offer a deeper understanding of the user’s intent and can therefore deliver higher quality responses.

The Multi-Model Approach

There is another strategy available to Gen AI development teams that allows users to benefit from the unique capabilities of each LLM while balancing out each one’s weaknesses: A multi-model approach that draws from more than one LLM in the creation of a new tool, enabling it to produce results that surpass that of any one model.

Questions to Ask About the Gen AI Model

When evaluating a Legal AI solution, here are some questions to pose to the provider about their Gen AI model:

Do you use a single model or a multi-model approach for creating your product?
What is the average time the AI takes to return an answer?
Are there any limitations on the number of prompts you can pose each day?
What is the underlying architecture of the AI model and how does that design impact its capabilities to perform legal-specific tasks?
Was the Gen AI model trained on legal-specific data or open-source data?
Does your AI solution incorporate a retrieval-augmented generation framework to find and link relevant source documents?

Lexis+ AI is our breakthrough Gen AI platform that we believe will transform legal work by providing a suite of legal research, drafting, and summarization tools that delivers on the potential of Gen AI technology.

Lexis+ AI pairs our unsurpassed legal content with breakthrough Gen AI technology in a way that could redefine the way that legal research is conducted and legal work product is created. Its answers are grounded in the world’s largest repository of accurate and exclusive legal content from LexisNexis with industry-leading data security and attention to privacy. Click here to request a free trial.

To download a copy of The Definitive Guide to Choosing a Gen AI Legal Research Solution, please click here.

6 Enhancements to Lexis+ AI That Improve Legal Research and Drafting Workflow

Sherica Celine — Thu, 25 Jul 2024 00:00:00 GMT

Since our initial rollout last year of Lexis+ AI, the industry’s first comprehensive legal research platform powered by generative artificial intelligence (Gen AI), we have been pro-actively seeking feedback from our customers and carefully studying the performance of the product in various professional settings. This continuous feedback loop is important in the development of any tech-enabled offering, but it is especially crucial when it involves breakthrough Gen AI technology that relies on machine learning and refinement.

We unveiled our first major series of improvements to Lexis+ AI earlier this year, when we introduced our next-generation AI Assistant that delivers an even more personalized experience to help legal professionals deliver outstanding work. We’re excited to share the latest innovative features for Lexis+ AI, based on the suggestions and feedback collected from users in recent months.

The Platform

Lexis+ AI is the only Legal AI solution that provides linked citations in responses. All answers are grounded in the world’s largest repository of accurate and exclusive legal content from LexisNexis, including case law, statutes, treatises and more. One Lexis+ AI subscription provides a powerful suite of AI tools; there is no need to purchase add-ons.

The solution provides conversational search, insightful summarization, intelligent legal drafting, and document upload and analysis capabilities — all in a seamless user experience. It incorporates multiple large language models to match the best model for each research task, which is why Lexis+ AI performs at greater speed (2X faster than Westlaw) and at higher capacity than other Legal AI products on the market.

We recently announced a powerful set of customer-driven enhancements to Lexis+ AI that harness the power of Gen AI to streamline legal research, provide comprehensive and trustworthy legal analysis, and save additional time so legal professionals can focus on higher-value work.

6 Key Enhancements

The new features rolled out this summer once again elevate the customer experience on Lexis+ AI by putting users in the driver’s seat and giving them greater control over their prompts, jurisdictions and search history.

Here are six key new Lexis+ AI enhancements that will deliver superior answer quality and improve legal research and drafting for professionals:

Lexis+ AI Headnotes

This new feature is a potential game-changer in legal research because approximately 80% of cases have not been editorially analyzed by human researchers. Lexis+ AI now generates headnotes for every case, enabling users to better understand the points of law for each decision and to easily locate similar cases by related points of law. Our team of expert attorney-editors will continue to create high-quality headnotes for key cases — and they will personally oversee the AI-generated headnotes that are created — but unlocking the power of AI provides an important supplement to that human editorial work.

Shepardize Documents

Users can run a Shepard’s analysis on citation references within their uploaded documents by using the Lexis+ AI assistant, then link to LexisNexis Brief Analysis for a full report that identifies weaknesses in opposing counsel’s arguments and opportunities to strengthen their own arguments.

Integration with Law360 Legal News

Direct access to premium Law360 legal news content integrated into the AI assistant, complementing existing legal research capabilities for comprehensive legal analysis in one solution. Users can ask direct questions and request news results related to specific legal topics, complementing the existing content library built into the Lexis+ AI platform.

Shepard’s Citation Graph

Legal researchers using Lexis+ AI need to be able to surface answers that contain the highest and best legal authority. The new citation graph checks candidate authorities for responses to provide a deeper understanding of the grounding cases, ensuring users have access to the most authoritative and up-to-date legal sources.

Treatment Summaries

Lexis+ AI now provides a way to view an at-a-glance summary of the Shepard’s citation analysis within the AI conversation. This enables users to quickly determine if there is a case of interest to them and, if so, to seamlessly access the full Shepard’s report.

Side-by-Side Document Comparisons

A new grid view enables easy comparisons of multiple user-uploaded documents on one screen. This streamlines the research process by enabling side-by-side review and analysis for clear evaluation and efficient insights.

Other customer-driven enhancements now built into Lexis+ AI include: Default Jurisdiction, which allows users to set one jurisdiction as their default option so it appears as pre-selected each time they open the jurisdiction panel; History, which shows previous conversations with the Lexis+ AI assistant so users can easily find, review and/or re-run past queries; and the ability to Deliver the list of documents (and the underlying documents themselves) found in the “View More Materials” section of Lexis+ AI by either download, email or print functions.

Become an AI Insider

If you want to learn more about how Lexis+ AI can help legal professionals achieve better outcomes, or to sign up for the Lexis+ AI Insider program that provides the latest in Legal AI educational content, please visit www.lexisnexis.com/ai.

Click here to schedule a free trial of Lexis+ AI today.

Trust me I’m a legal AI: Addressing Accuracy and Confidentiality Concerns

beng — Wed, 17 Jul 2024 19:00:00 GMT

By Geoffrey D. Ivnik, Esq. | Director of Large Markets, LexisNexis

Law firm leaders are increasingly adopting Legal AI, Gen AI tools trained for the legal profession, but as with any breakthrough technology there is a healthy amount of skepticism that must be overcome.

Building trust in Legal AI will mean resolving concerns in several areas — from issues involving accuracy and security, to ensuring clients are comfortable with how firms are using AI to deliver legal services.

There are some simple things that firms can do to build their lawyers’ and their clients’ confidence in Legal AI tools, opening the door to new workflows that enable attorneys to work faster and smarter. One key step is pro-actively address concerns about accuracy and confidentiality with the use of Legal AI tools.

Avoiding hallucinated answers

We’ve all heard of the risks inherent in using open-web AI tools for legal research, illustrated by headline-grabbing news stories about lawyers who mistakenly relied upon search results provided by ChatGPT without verifying the accuracy of various case citations. These stories understandably have made some lawyers concerned about the potential of Gen AI to produce “hallucinated” answers.

According to the recent Gen AI report, Gen AI in Law: A Guide to Building Trust, bolstering confidence in the accuracy of AI-generated content is crucial for lawyers to trust the answers they are receiving to their legal research inquiries. This is where specialized Legal AI tools and each lawyer’s own legal acumen can help to close the trust gap.

“Companies like LexisNexis ensure that answers are generated with the appropriate source citations and references,” says Jeff Pfeifer, chief product officer at LexisNexis. “Doing so allows an individual to trust the answer quality and that the answers are backed by appropriate legal authority.”

For example, Lexis+ AI grounds its answers in an underlying legal content database that understands and optimizes prompts. The tool retrieves and ranks relevant source content to generate answers based on that authoritative material. References are included in the text so that users can check the sources themselves.

Ensuring data security and confidentiality

Another key consideration for law firms is making sure their Gen AI solution follows strict data security protocols and upholds all client confidentiality requirements. As discussed in the Gen AI report, this means ensuring that contracts with third-party Gen AI providers do not allow firm data to be shared with the provider, a provision that general-purpose Gen AI companies often include in their terms and conditions under the pretext that sharing data will improve their service.

“Gen AI are data intensive tools, they’re like the ravenous plant from ‘The Little Shop of Horrors’ — they always need to be fed,” says Tod Cohen, a partner at Steptoe. “For a law firm, that’s really a question of what we are feeding the tools with and how do we make sure that the tool isn’t being fed with confidential and proprietary data, then is reused by other clients and potentially by downstream users inside and outside of the firm? That’s really the most difficult part.”

Ensuring data-sharing clauses are removed from contracts can provide reassurance of confidentiality, while improvements in commercial-grade cloud infrastructure have also made using Gen AI much more secure than earlier generations of the technology.

For example, LexisNexis has made data security and privacy for customers a priority by opting out of certain Microsoft AI monitoring features to ensure OpenAI cannot access or retain confidential customer data.

“We spend significant time working with our clients to help them understand the technology infrastructure and the extensive steps that we’ve taken to ensure that their experiences are highly secure and highly confidential,” says Pfeifer.

Law firms can also increase confidence in Legal AI tools by putting in place policies and guidelines that govern how the technology can be used. Aside from not entering client information that could compromise confidentiality, those policies should also require that attorneys are fact-checking any content provided. This is no different than using other legal research tools where, if an attorney is citing a case, they must read and understand the content if they want to avoid the risk of committing malpractice.

REPORT: Gen AI in Law: A Guide to Building Trust

We interviewed a variety of AI leaders from the legal profession to explore how law firms and corporations that embrace Legal AI are building trust in the use of this new technology. In addition to the section of the report we unpacked today, which focuses on the importance of addressing concerns about accuracy and confidentiality, other sections of the report include:

Key factors that drive trust with Gen AI;
The steps to building trust; and
Rethinking workflow, skills and culture.

Read the full report now: Gen AI in Law: A Guide to Building Trust.

New Revenue Streams: Firms must adapt to changing client mindsets

beng — Wed, 17 Jul 2024 13:00:00 GMT

By Geoffrey D. Ivnik, Esq. | Director of U.S. Legal Markets, LexisNexis

More than three in four (77%) of senior lawyers at Am Law 200 firms believe that generative artificial intelligence (Gen AI) technology will enable them to offer new value-added services to clients, with 54% reporting they are already exploring these potential opportunities, according to the 2024 LexisNexis Investing in Legal Innovation Survey.

One important question that firms need to contemplate is how they can best adapt to shifting client mindsets about the value of the work that outside counsel does and how they expect to be billed for that work.

Client mindsets changing about how to assess value

The adoption of Gen AI tools into law firms’ workflows will reduce the time lawyers need to spend on labor-intensive tasks and therefore accelerate changing perceptions among in-house counsel about what they are prepared to pay for legal services, according to the new report, Gen AI in Law: Unlocking New Revenues.

“Corporate counsel do expect that their firms using this technology are going to deliver business benefits back to them, so that might mean faster or more efficient production of the information,” says Jeff Pfeifer, chief product officer at LexisNexis. “Ultimately, they expect to see some financial benefit in the way their work is managed by their outside counsel.”

Indeed, the Investing in Legal Innovation Survey found that 80% of in-house teams believe that the adoption of Gen AI means their external legal bills will fall.

But veteran observers of the legal services industry point out that the value of Gen AI is found in helping law firms complete work more efficiently. That type of work has already been carved into fixed-fee arrangements that more accurately reflect the value provided, while legal work that requires human judgment is unlikely to be impacted by Gen AI with respect to billing rates.

“The legal profession is more insulated than most, because ultimately most of the legal profession’s skill is in judgment and foresight — that’s what people pay an attorney for — and that’s the hardest part to translate to a machine,” says Tod Cohen, a partner at Steptoe.

Perhaps a more likely implication is that law firms will need to adapt to shifting client expectations about the nature of the work they are billed for.

“I think as Gen AI becomes widely used we would expect to see a shift in how time is billed to us,” says Christy Jo Gedney, senior manager at Liberty Mutual Insurance. “I would expect to be billed more for detailed legal strategy, risk analysis and the refinement of legal documents, and less for the routine analysis and for the initial drafting of documents.”

Advising clients on AI

One specific illustration for how law firms can adapt is spelled out in the new report, Gen AI in Law: Unlocking New Revenues. Law firms should be moving aggressively to capitalize on the emerging need for reliable AI-related legal advice and expertise as companies seek help with navigating the fast-changing regulatory landscape — and the subsequent legal implications — for how they can utilize AI technologies.

“We’re building out an AI practice that is global because so many of our clients have users globally and this is going to be regulated worldwide,” says Cohen. “We’re working with clients to establish AI governance policies and structure them in the world in which they exist, as opposed to just a single narrow jurisdiction.”

Industry thought leaders forecast that this potential boom in AI advisory work for law firms is going to increase demand for lawyers who have technical expertise and experience on top of their legal acumen.

“There may be a bit of a war for talent around those with the technology skill sets, trained as lawyers that can provide these kinds of advisory services to their clients,” says Pfeifer.

For example, firms that have sophisticated patent practices may be well-placed to extend this into Gen AI capabilities because they will likely already have attorneys who are skilled around technology questions and issues.

REPORT: Gen AI in Law: Unlocking New Revenues

We interviewed a variety of AI leaders from the legal profession to explore how law firms and corporations that embrace Legal AI can generate new revenues through the use of this technology. In addition to the section of the report we unpacked today, which explores how Gen AI is accelerating changes to client mindsets when it comes to assessing the value of legal work, other sections of the report include:

An introduction to your new business development tool;
How law firms can seize new opportunities with the right skills in place;
The transformation of unprofitable practices into thriving businesses; and
Why law firms should start business innovation now to maximize success.

Read the full report now: Gen AI in Law: Unlocking New Revenues.

Chapter 11 Bankruptcy Filings Rise in 2024: Key Elements In-House Counsel Need to Know

beng — Thu, 11 Jul 2024 07:00:00 GMT

After a two-year decline in Chapter 11 bankruptcy filings in the immediate post-COVID period, U.S. commercial bankruptcies have returned to a more normal level of activity, according to CFO Magazine. Economic uncertainty and technology disruptions in many sectors portend additional stress on bottom lines in the months ahead.

S&P Global Market Intelligence has recorded 275 corporate bankruptcies so far in 2024, roughly on pace with last year, in spite of a slowdown in inflation and cooling labor market.

In-house counsel need to be prepared for all of their potential options in the event of deteriorating business conditions. This includes the important steps that need to be taken to prepare for a possible Chapter 11 bankruptcy filing.

Gary L. Kaplan, a partner in the Business Restructuring & Reorganization Practice at Jones Day, contributed an insightful Practical Guidance article for LexisNexis, Contents of a Chapter 11 Plan. The article discusses the mandatory and optional provisions of a Chapter 11 plan, as well as the classification and treatment of claims and interests in a plan.

4 Key Elements of a Chapter 11 Bankruptcy Plan for In-House Counsel

Mandatory Provisions

The Bankruptcy Code sets forth seven provisions that must be included in every Chapter 11 plan other than a plan for an individual: Designation of classes of claims and interests; Specification of unimpaired classes; Specification of treatment of impaired classes; Equality of treatment of each claim or interest within each class; Adequate means for implementation; Voting powers; and Provisions consistent with public policy.

Optional Provisions

The Bankruptcy Code gives broad discretion as to the types of provisions that may be included in a plan after ensuring that the mandatory provisions are present, as long as such provisions are not inconsistent with the Bankruptcy Code. A non-exclusive list of optional provisions may include: Impairment of claims or interests; Assumption or rejection of executor contracts; and Appointment of representative.

Classification of Claims and Interests

A plan must also designate classes of claims, except certain priority claims, and classes of interests for purposes of voting on the plan. In formulating classes of claims and interests, the objective is to facilitate confirmation of the plan by ensuring that either each class will vote in favor of the plan or the plan may be confirmed over a dissenting class’s objection. Equity interests are typically separated into classes based on the type of interest, such as a class for preferred equity interests and a class for common equity interests. The plan should clearly establish the general rules for these classifications, how unsecured claims will be treated, how secured claims will be treated and provisions for subordination agreements.

Treatment of Claims and Interests

A Chapter 11 plan must specify the treatment of claims and interests under the plan. Treatment generally refers to whether a particular class of claims or interests will be unimpaired or impaired under the Chapter 11 plan and, if the class is impaired, what the class will receive on account of its claims or interests. The treatment of a claim or interest will depend on a number of factors, including the nature of the claim or interest, the value of the debtor and the value available for distribution to stakeholders. The plan should spell out general rules for how it will treat a class of secured/unsecured claims and interests, how it will treat non-recourse claims, and how it will provide for a class of claims or interests that are impaired under the plan.

In-house counsel need to stay informed of these key elements in a Chapter 11 bankruptcy plan so they are prepared to advise corporate executives and boards of directors in the event it becomes necessary. LexisNexis offers a number of Practical Guidance resources to assist with this review, including the Filing for Chapter 11 Bankruptcy Resource Kit and the Chapter 11 Plan Confirmation Resource Kit.

These resource kits assist in-house counsel by providing detailed practice notes, templates and checklists. Get a free trial of Practical Guidance from LexisNexis.

All of these news, analysis and Practical Guidance resources regarding Chapter 11 bankruptcy filings are accessible from Lexis+® General Counsel Suite. Lexis+ GC Suite provides in-house counsel with a vast collection of legal resources, breaking business and legal news, and practice resources.

Get a free, 70day trial of Lexis+ GC Suite.