Nilay Patel (4:38)

Okay.

Nilay Patel (4:38)

Bridget McCormack, the president and CEO of the American Arbitration association and the AI arbitrator.

Nilay Patel (4:43)

Here we go. BRIDGET McCormack, you're the president and CEO of the American Arbitration Association. You're also the former Chief justice of the Michigan Supreme Court. Welcome to Decoder.

Bridget McCormack (5:05)

It's great to be here. Great to see you.

Nilay Patel (5:07)

You and I were on a panel a while ago. You Were talking about rolling out AI in arbitration. You're also talking about your history overseeing judges in Michigan, which was very funny. I'm very excited to talk about all of that with you. I just want to start at the very beginning. I suspect you and I are going to end up talking a lot about commercial disputes, business disputes. There's a lot there to discuss in the context of AI and arbitration. Most people's experience of arbitration is like they just sign a contract. You were the Chief justice of Michigan. You oversaw the literal legal system in that state. Now you oversee, I think the arbitration association is 100 years old. You oversee 100-year-old dominant provider of arbitration. Explain to people what the difference is.

Bridget McCormack (5:50)

So the thing about being the Chief justice of the Michigan Supreme Court is like every state supreme court, the supreme court has administrative oversight of all the courts of the state. And so when you're the Chief justice, you're kind of the CEO of public dispute resolution system that most people are stuck dealing with if they need a little justice or somebody wants a little justice from them, like other leadership roles. I had a leadership team, another 300 or so staff folks who reported up to the leadership team. And it was our job to try and figure out how to improve the experience of people across the state of Michigan who had to go to their local courts because of some legal problem. It's an enormous change management job for lots of reasons that are not true in my current job. The thing about running the public dispute resolution system, the state court system, is your funding isn't based on how well you do. Right. You can't perform well one year and have extra revenue for R and D. You have to walk over to the legislature and convince some brand new representative from Leelanau county that online dispute resolution is really going to increase access, access to justice. And you literally have to pick off legislators from around the state to try and fund what you know is going to be a better way of doing business. And at the same time, the judges across the state in Michigan, there are approximately 1,000 judicial officers. I say that because in addition to judges, there are magistrates that report up. They're all separately elected, and they work in counties that have their own funding system. So they're partly funded by the state, partly funded by their county. And the counties across Michigan are differently resourced. Right. So some counties have a larger tax base than others and they have a bigger budget to work with. So convincing separately elected judges with different budgets that we're going to do business a certain way going forward is super complicated. It's a very fun change management problem. The AAA on the other hand, it's basically a court system, but a private court system. Although I should say at the top. The AAA is a nonprofit. We're a fee for service nonprofit, but we're a nonprofit, but we've been administering alternative dispute resolution, arbitration, but also mediation and any other alternative process parties want for 100 years as of last Thursday. So we've been doing it for a long time. And we administer over half a million cases a year for the last few years. And not just domestically, but also cross border disputes. So most of them are B2B commercial disputes, but there are also B2C cases, employment, consumer cases, and a growing number of self represented parties. A lot of small and medium businesses, as I'm sure you know, can't afford legal help. They're legally naked. And so arbitration is a, is a easier way for them to manage disputes.

Nilay Patel (8:56)

It sounds like as the chief justice you had a role like advocating for the court system with the legislature inside the justice system. Most people never hear about the that never think about that. What was the split in your time? How often did you have to spend time just saying, hey, can you pay for the courts versus actually being the chief justice?

Bridget McCormack (9:17)

I would say the administrative part of the job was significantly more than half than the decisional part of the job. It's an enormous job. Yeah. I mean Michigan adjudicates between 3 and 4 million cases a year. And like every other state court, a majority of people who go to court to have cases resolved can't afford lawyers. This is the primary place people interact with their government. So the kind of justice we deliver, the quality of justice we deliver is it's pretty important to frankly like the rule of law and trust in institutions. And so I think it's one of the most important jobs in government.

Nilay Patel (9:59)

I'm curious about that because it feels like the experience you had there really leads to your perspective on how and why AI should enter the legal system. The reason I'm starting here with your previous experience and not your current job is I encounter this on our show and on our site all the time that people think the legal system is deterministic. Particularly our audience, the tech audience, thinks the legal system is a computer. Right. You can feed it inputs and it'll API, access the law and then you'll get some predictable outputs. And I'm always trying to convince people that that's not the case. And just even hearing you talk about the politics of running the legal system underlines for me that the legal system is absolutely not deterministic. Should it be? Because you're the first person I could just like straightforwardly ask that question to, should the legal system be more predictable and deterministic?

Bridget McCormack (10:49)

So it absolutely should be, at least in a majority of cases. In fact, if it were more deterministic, we would have fewer disputes. Right? It's because it's probabilistic and I agree with you. It for the most part is because it's run by humans who are. You've met humans, right? They're flawed. It therefore isn't always predictable. If it were more predictable, we would be a more efficient and effective system. We'd avoid a lot of disputes because people could plan their business around what in fact the rule was going to be and how it was going to be enforced and how they could count on it being enforced. That's true for in my view, most cases for which there is a rule of law and we know how it's been interpreted historically, or at least how it's been correctly interpreted historically by majority of courts, there are always going to be new frontiers in legal. So cases where courts are having to decide how to interpret a new statute, courts are going to have to figure that out for the first time. That's not going to be able to be deterministic. I mean, could get better and better. Frankly, I think AI could do a very good job at the front end of statutory drafting in making sure there was less ambiguity in statutory terms. I think so. I think AI could impact that. But there are even still modern questions about historic provisions in statutes and constitutions, state and federal, that, that we have entrusted judges to decide. So I don't think it can all be deterministic. I think an awful lot could be and it would improve the way the law operates.

Nilay Patel (12:37)

Where do you think that the sort of source of uncertainty in the legal system as people experience it today comes from? Is it just that most people can't afford a lawyer? Is it that some percentage of judges are just weird old guys like, where does that come from?

Bridget McCormack (12:54)

I don't think there's a single answer. I do think the fact that 92% of Americans can't afford help with their legal problems. And that's not just the kinds of cases individuals end up going to court for. It's also true for all small and medium businesses, for the most part can't afford lawyers. So there's an awful lot of trying to navigate legal risk and legal problems without lawyers. And that's complicated. That's actually frankly, very complicated for judges. Judges who are managing large dockets with many, many parties without lawyers try and do their best to work their way through those problems, but it's not easy. But I do think the fact that we have a legal system run by humans and humans are imperfect and busy. I want to be very careful that very clear that there's a big difference between state and federal court. Right. 95%, 96% of cases are heard in state courts, not federal courts. I mean, the federal courts do a very, very small, a much smaller number of cases and generally have larger staff to help them. State courts are managing most disputes with fewer resources and doing the best they can. But if you look at the rate of reversals by appellate courts, by intermediate appellate courts and state supreme courts, they're getting a lot wrong. Right. So, you know, humans get things wrong for, for lots of reasons. Yeah.

Nilay Patel (14:26)

That rate of reversal is just to unpack that. What you mean is someone goes to court, a state court judge decides there's an appeal which costs money, and that goes up to an appeals court and the appeals court is overturning that judge and you're saying that rate's going up or that rate is too high.

Bridget McCormack (14:39)

I don't know if it's going up. I could probably figure that out, but I don't know that off the top of my head. It is, it is the fact that it's quite high. The number of cases where an appellate court reverses the work of a lower court is not a low number. It's, you know, going to be different from state to state and different in the federal appellate courts. But you can, you can benchmark it and it's, it's not an insignificant number. I like to use the example of I did, I ran and I ran a non DNA innocence clinic like two careers ago. We know a lot about the rate of wrongful conviction as a result of the DNA exonerations over the last, I don't know, 30 years at this point point, because there's a database now and we've been able to learn both, like the rate at which mistakes are made. Sometimes they're made by juries, but often they're made by judges. And the kinds and qualities of the errors that lead to those mistakes. And it's sort of a shocking number. Like the wrongful convictions tell us that in 3 to 5% of cases there was an error made. And you might think, oh, that's kind of a low number. And if you're shooting free throws and probably it is A low number, but if you're landing planes, not a great number. Right. And I think the, you know, the criminal justice system should be more like landing planes.

Nilay Patel (15:53)

The reason I'm starting here is I think you perceive this as well as I do. The lack of faith and trust in our institutions is kind of pervasive across American society. And the legal system is just part of it now. Right. Like, especially if you show up and you don't have a lawyer, you don't have the money, and then it is a weird old guy and a judge, and then you're looking at the statistics and they're probably wrong, but you afford to appeal, or you're just reading the headlines every day. It just feels like there's more chaos in the formal legal system than ever. And I, I wanted to start there because I do feel like the lack of faith in our corporate institutions is equally high. And most people's experience with arbitration is, well, I just need cell phone service. I'm not going to read this contract or these 15 contracts to get my cell phone service. And there's a line here that says, well, I can't even sue AT&T. If they get something wrong, I'm going to end up in arbitration. And that arbitration is obvious. Like, like, of course it's just going to be against me. Like, there's nothing I can do. I'm just signing away my rights. How do you feel about that in this context? Because that feels like as big of a problem as anything.

Bridget McCormack (16:59)

Yeah. So let me unpack a couple of things you said. I completely agree that the declining trust institutions is. The courts are part of that problem. And in fact, the national center for State Courts kind of tracks that. And I think they're data shows declining trust in the courts. Frankly, that declining trust is faster in the federal courts than the state courts, but even the state courts are struggling with that. I happen to believe that the way most Americans are locked out of our formal justice system is as important to that declining trust as any other factor. And there are other factors. Imagine, like any other public good. Imagine if we said, if you want to drive on the highway, you can do that, but you have to hire a driver or, oh, you want to register your kit for public health. Public school, no problem. It's a public good. But you're going to have to hire a special person who will go, you know, sign you up for public school, because otherwise it's in Latin and you can't understand it. Like, we, we would never accept that, but we accept that most Americans are locked out of their formal justice system because they, I don't know why, because we set up a legal system 250 years ago and the legal profession is better than any other at avoiding any disruption. But to the second part of your question, I do think that there has been a narrative that if your consumer contract, whether you bought appliance or a cell phone or, you know, or sometimes employment contracts, designate arbitration as the forum for resolving disputes, that that must mean this is not going to go well for you. In fact, the data that we have is that people are far more likely to actually get a hearing and get some award when when they navigate an arbitration process than when they navigate a court process. And the reason for that probably is obvious. If you have to navigate a court process but you can't figure it out, that's really complicated. In arbitration, we can make resources available to parties who are representing themselves and do everything remotely, make it easier for people to actually navigate it. So cases are far more likely to actually go to a hearing and parties are heard in arbitration than they are in courts. But that perception definitely is out there. And it may well be the case that there are other providers that that have fewer resources for self represented parties or aren't as focused on it. At the aaa, we actually require businesses that want to put our clauses in contracts to file those contracts with us and they have to satisfy our due process protocols. And I'm not sure that's true of every organization. Many are for profit and that is probably an issue in other places.

Nilay Patel (19:44)

We need to take a quick break. We'll be right back.

Adobe Narrator (19:54)

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Nilay Patel (22:15)

Hey everyone.

Nilay Patel (22:16)

This segment of decoder sessions features my.

Nilay Patel (22:18)

Boss, Helen Havlak, the writer's publisher and l' Oreal Group's Global Vice president of.

Nilay Patel (22:22)

Tech and open innovation. I think you're going to enjoy this conversation.

Bridget McCormack (22:26)

We're going to start with a decoder classic question Giv what does tech and open innovation mean at l'? Oreal? Who is on your team?

Helen Havlak (22:33)

What kind of projects do you work on?

Helen Havlak (22:35)

Open innovation is all the partnerships that we have in l', Oreal, working with startups outside, and it's really a great time right now to be doing open innovation because we're doing things in vertical farming and sustainable cultivation and biotech. So we do all those partnerships and our team is responsible for them. And the augmented beauty team is all the tech that started 15 years ago when we kind of had a blank page. And now how can we bring beauty and tech together?

Bridget McCormack (23:00)

How do you decide which projects to invest in?

Helen Havlak (23:03)

At the beginning I was trying to push as much as I could to get people to think that beauty was relevant for tech. So we were really tech centric. And then over time we started thinking about how to look more at beauty products that we can upgrade thanks to tech. And so we have a little bit more kind of process behind how we choose projects. Now we try and kind of do things like upgrading the hair dryer to be able to do three out of four people have a hair dryer at home and so how can we make it better? Or this year like the flat irons that we're using and LED masks and stuff like that. So we do have a little bit of that kind of process, but we leave some space for serendipity and some creativity. So we have scientists all the way to engineers and we let the scientists kind of think of some new clever ideas too.

Adobe Narrator (23:52)

Support for this show comes from Doppel. Maybe that ping you just got is an urgent message from your CEO, or maybe it's a deepfake trying to target your business. Doppel is the AI native social engineering defense platform fighting back against impersonation and manipulation. As attackers turn to AI to power increasingly sophisticated strikes, Doppel uses it to fight back. Their digital risk management dismantles attacker infrastructure while human risk management builds team resilience through simulation and training with automated takedowns, multi channel coverage and AI defenses that build intelligence with every fight. Doppel works relentlessly to protect people, brands and trust. Doppel outpacing what's next in social engineering? Learn more@doppl.com that's d o p e l.com.

Nilay Patel (24:49)

We're back with Bridget McCormick, the head of the American Arbitration Association. Before the break, Bridget was explaining the nature of arbitration, how it differs from traditional court here in the United States, and how her experience as the former Chief justice of the Michigan Supreme Court shaped her philosophy on judicial outcomes. Now I want to get into the heart of the matter, which is the ambitious project to bring large language models and agents to dispute resolution, something called the AI arbitrator.

Nilay Patel (25:18)

I'm starting with this issue of fairness because I, I feel like when you automate the systems, all of the things that make things feel fair or unfair get heightened, get magnified in specific ways. And I'm, I, I just want to ask one more question here. Then. I do want to go into why should we automate some of these systems? The idea that just getting a hearing and some outcome is substantially more fair. I feel like we could unpack that for another, another week. There's a reason these companies want to not be in the formal justice system, right? They don't want precedent for the awards that they're made to give to the parties that come and sue them. They certainly don't want it in the public record that any of these things ever happen. They don't want discovery. All that stuff you don't have to do in arbitration. So maybe it's easy to participate in, but there's still a benefit to them that accrues over the long run. How do you balance that out?

Bridget McCormack (26:08)

Yeah, that's not true of employee Arbitration, those cases are reported, so they actually do have to live with those results. And it may well be that for some businesses, they're choosing arbitration because it's a more efficient way for them to resolve disputes. I don't know. You see them going back and forth between arbitration and litigation. I think Amazon recently wrote litigation back into all of their consumer, maybe not all, but a lot of their contracts. Because I think. I'm not going to speculate about why, but I think parties are always thinking about what the best forum is. You know, there's like a robust literature on procedural fairness, procedural justice that goes something like this. I won't waste, like, time on the details of it, but it's. It's. If parties feel like they were heard and that they understand the process, they understand, like, what happened and why it happened. In other words, if the neutral deciding the dispute can explain it to them, they're far more likely to grow trust in institutions. It used to be a sort of a big deal in. In training judges, we would remind judges how important it was that people feel heard. And even if you're gonna rule against them, they will take bad news for them and still grow trust in the institution if they feel heard and understood and they understand what happened. And that matters because today's parties are tomorrow's witnesses and tomorrow's jurors. Right. Like, you wanna grow trust, and in every case, usually one person is disappointed. That's just how disputes go. I'm not sure I agree with you that getting some award isn't important. There's data. A bunch of arbitration scholars, or really dispute resolution scholars, did some recent work on employment arbitration. And the number of cases that just get summaried out in court, where an employee has a claim or believes she has a claim against her employer, is quite high. Maybe not surprising to you. And that just simply doesn't happen in employment arbitration. In arbitration, you're far more likely to actually get to go tell your story. I'm not sure I agree with you that there's like a clear fairness narrative based on facts.

Nilay Patel (28:24)

The one thing I will definitely say here is, in my mind there, you know, we cover big tech companies. I am just thinking about the clauses that everybody has to sign in the terms of service agreements. And you're obviously thinking about employment arbitration. And there's like wild different universes. Another week we could spend on is, I think terms of service agreements should be illegal. But that's a different podcast for a different time, maybe with more boots. Yeah, you're mentioning the fact that people just feeling heard leads to trust, I think, is the transition I want to make to AI. You mentioned that idea to me the first time we spoke about this. I've been thinking about it ever since. If there's one thing an AI system can do, it is just make you feel heard. Like in every positive way that that can happen in a startling number of new and quite frankly, shocking negative ways. The AI systems will just listen to you, you over and over and over again. Is that something as you have developed the AI arbitration system is, Is that something that you've leaned into? Is that the heart of it? Because that feels like, well, if the technology can do one thing, it is just listen to these parties until they're done.

Bridget McCormack (29:30)

I do view it as a significant advantage of an AI dispute resolution system. And we can, we can, we can talk more about when that's appropriate and when it's not. I don't think, you know, know, every dispute should go to an AI dispute resolution system, but when parties prefer it. It was for me, at the front end of what we built, which is a very narrow product right now, but it was, I undervalued it and underappreciated it. So at the front end of our AI arbitration process, which is really a series of agents that operate across the process on the back end, even though the parties are interacting with one, the. The agents take in the party's complaints and their, whatever pleadings they're filing and whatever evidence they think supports their claims. And then a series of agents parses the claims, the elements of each claim, the evidence that may or may not support each claim, but the parties believe supports each claim and the legal framework that surrounds it. And then it goes back to the parties and says, here's my understanding of what, what the claims are, you know, what your claims are party A and yours party B, and what, what the elements are and what the evidence is and what the legal framework is. And did I get that right? And the parties get to say, you did or no, you didn't. You missed this one element, or this one claim, or the fact that this evidence supports both of these claims, not just one. And then it goes to work again. The agents go to work again until the parties are satisfied that they have been heard and understood. I mean, maybe we could do that in courts, but we would have to spend a whole lot more money. Like, imagine if judges in trial courts or even in, like, appellate courts. In appellate courts, you file briefs and then you wait by your computer for months and months and months. To see like when you, when some white smoke emerges from the, you know, state supreme court building and then you get a decision and the decision may or may not have even addressed all of the issues that you raised. You know, that happens to, happens all the time. You know, I reviewed 2,000 cases a year, 2,000 applications a year when I sat on the Michigan Supreme Court. And I can't tell you how many of them were the intermediate appellate court didn't even rule on issue number three. Like they just ignored it, you know, and we just want an answer. So imagine if courts could do that. Imagine if trial judges or appellate judges could pull the parties in and say, here's my understanding, did I get it right? And then we could actually be satisfied that they did. That's probably not going to work in our bespoke built for 18th century norm system, but it can work for disputes in an AI dispute resolution system.

Nilay Patel (32:17)

So let's talk about your actual product. Right now. I think it's just documents only in construction disputes. Right, that's where the product is. Describe why you picked that and then just walk me through step by step. How do you use this thing? Is it an app? Is it a website?

Bridget McCormack (32:32)

It's a website, although I assume we will have an app version of it and we have an app version of all of our services. You can log in on your phone, but you're logging into the case management system. So really it's two things. We built an AI native case management system for the AI arbitrator to operate on that effort, effort is time well spent because it will replace our legacy case management system for all disputes within two years. That's just going to be something everybody has an opportunity to benefit from, which saves time and money. But the AI arbitrator is, like I said, a bunch of different agents, probably 20, sometimes more, depending on the complexity of the dispute that operate across the arbitration process. A bunch operate at the front end. We talked about those that are parsing claims and organizing arguments and organizing claims, making sure the party is satisfied. And then there's a bunch of reasoning agents. And those reasoning agents take the summary of the dispute that the parties are satisfied with and start reasoning across it. And then there are agents that do a draft award. There's a human in the loop throughout. In the beginning it's the parties, they are the human that are making sure that it's, that they're heard and understood. Then we have a cohort of construction arbitrators who serve as the human in the loop arbitrator for the reasoning and award drafting. And it's the human arbitrator who ultimately issues the award, and she makes any changes that need to be made so that she's comfortable with the award. We started in construction. We have a long history with the construction industry and a very good relationship with the lawyers and parties and arbitrators in that industry. It's an industry where arbitration is important because as you know, in any big project, there are always going to be disputes. And if you have disputes along the way, you don't want your project ground to a halt. You want to be able to keep going. So they need speed and efficiency. They're not in it for confidentiality. They just need to be able to continue to move forward. It's also an area where AI is already impacting the underlying business. Right. The construction sites are being infiltrated with AI that's making what they do significantly faster and better. So it's an industry that we knew would be open to it. And we do so many of those cases. We had a good library of documents only construction cases that we could ground our agents in. You know, our, our agents are ultimately operating off a handbook. But that handbook, we were able to build that and train our agents on those historical cases and with the cooperation and collaboration with a bunch of our construction arbitrators and lawyers. So it was the right, like, place to start because we knew they'd want it and we could work together with them.

Nilay Patel (35:20)

Let me ask you a really dumb question. What is a documents only construction dispute look like?

Bridget McCormack (35:25)

I mean, it could be a lot of things. There are a million different ways it shows up, but something was supposed to be completed on a certain timeline and wasn't. And who's responsible for that delay? There might be supplier disputes. There's all kinds of disputes that happen like in the course of a construction project that don't need testimony. Right. You can decide them completely on the paperwork. And that was also important for us in starting this. In a first offering of an AI arbitrator. We were not prepared to have witness testimony evaluated by agents that might come one day. But we're not there today.

Nilay Patel (36:02)

Yeah, so you ordered the pallet of steel beams. It had a delivery date on it. They showed up. You can mark the delivery date and you can say, okay, that's obviously later than what we said. Said, you owe me some money. And then you can.

Bridget McCormack (36:16)

And here's what the contract says about why that should have happened. And here's, you know, but here's my response. And. And then it's pretty straightforward, like many disputes are.

Nilay Patel (36:24)

Honestly, I 100% feel like I'm a 1L back at the University of Wisconsin right now talking, talking about construction litigation in this. In this and contract disputes in this way. So you had the library of previous arbitration in cases that looked very similar to this. You obviously have the experience and the history with the industry.

Bridget McCormack (36:45)

Yep.

Nilay Patel (36:45)

Did you have the software engineers you needed to build this?

Nilay Patel (36:48)

How did that work?

Nilay Patel (36:49)

Did you go higher out to do that? Did you hire in? Where did this come from?

Bridget McCormack (36:54)

No, it's a great question. So we started transforming our operation in early 2023. I took this job in September of 2022, but I didn't start until February 2023. And everybody knows that in November of 2022 we all thought like, oh, wow, what's happening? So I spent most of my six weeks off learning everything I could about large language models and trying to figure out what it was going to mean for the legal profession and therefore our little subset of the legal profession. And I was convinced it was going to be extremely impactful. Like you said, it can make people feel heard. And that's a wake up call for any dispute resolution provider that's obviously going to have an impact. Impact. So when I got to the AAA, we gave everybody enterprise ChatGPT licenses. And I mean everybody, like not just our engineers, but our caseworkers and our legal team and our marketers and our. Because I think with any general purpose technology, you need the domain experts to figure out where it's going to impact them. And we started building point solutions. And so our AI engineers were not historic AI engineers, but like everybody else, they learned pretty quickly. And so we do have a very talented set of AI engineers with this product we built with a partner. We sort of, we did, you know, copilots. We built it with Quantum Black. Quantum black is McKinsey's AI team. And we did. For the first four or five months, the QB engineers sat in seat one and ours sat in seat two. And then they swapped for the last five months of it so that our team then was driving because they left after we delivered the mvp. And now we're already building out the next products that are built on the same architecture.

Nilay Patel (38:36)

I feel like it's another full hour decoder on McKinsey giving its AI team a cool name.

Bridget McCormack (38:41)

I'm super interested in that one. Have me back for that one. Really interested in it.

Nilay Patel (38:47)

It's gotta be really cool, you guys. So you have the system now, you have the platform and the frameworks. As you know better than anybody, how the platforms and frameworks are built in the beginning have a pretty big effect on where they end up.

Bridget McCormack (38:59)

Yep.

Nilay Patel (39:00)

And even just talking about witness testimony.

Bridget McCormack (39:02)

Right.

Nilay Patel (39:03)

Okay, yeah. Now there's a dispute on like did it happen before midnight or after midnight and you need the loading dock operator to say actually it was the next day. Like this document is wrong. It's the next day. Did you build a system that can take witness testimony?

Bridget McCormack (39:17)

So it can take witness testimony as long as it's in written form, which you may or may not know this. I didn't until I started in this job. A lot of arbitration disputes have written witness testimony. In fact, fact, most cross border disputes, that's how they take testimony. It's literally affidavits or just written expert reports. More and more in American arbitration cases, it's depositions. So it can do that, but it's not going to take, it's not going to say have a witness show up on Zoom and we're going to listen to them and see if we think they're telling the truth or they're twitching a little in their eye and so therefore we know they're lying. Let's not do it.

Nilay Patel (39:56)

That does it kick that back to a human arbitrator anywhere in this system right now? Because I mean that's what you would have a human arbitrator do, right?

Bridget McCormack (40:03)

We do. There's a human arbitrator assigned to the case from the beginning. And anytime the parties want the human arbitrator to come in, the human arbitrator is ready and ready and willing to come in. And you're probably right that there'll be some case where along the way the parties will decide that they need testimony that they didn't think they needed at the front end of the case. And that's probably going to be a case where the human arbitrator takes over because we're not having our agents do that for the now. It's not, not, not in our roadmap today.

Nilay Patel (40:29)

How many cases has the system resolved so far?

Bridget McCormack (40:32)

There's one case in the system. It's. We stood it up in November. The first case came in, I don't know, a couple weeks ago. Everybody was so excited. So as you know, in arbitration, both parties, they have to have an arbitration clause in the contract that says we're going to arbitration. So for now we're, we will not take any case unless both parties agree. And obviously there's no businesses that have put it in their contract. Well, I hope now There are, because we've been talking to people now about it for two months. But we'll start seeing cases once contracts start showing up that have, have it in their, in their contract. One of the things we've heard from a lot of parties is they're eager to use it as an early case evaluation tool. They want to be able to run it just on their own with their, you know, they want to put all of their evidence up into it and get an early case assessment about where their case is likely to go so they can figure out whether they even want to spend any time in arbitration. So that's actually one of the next use cases we're building out, which isn't very hard based on what we've already built.

Nilay Patel (41:33)

There's a gap here that it just seems very striking to me, a party that understands it needs early case evaluation because it is a repeat player in very lucrative construction disputes. And they just need to keep moving and sort of the cost of the settlement is enough and they can just keep moving. That's a pretty sophisticated act. How do you bring all of this down to. Well, most people can't even access the justice system. Is there a path?

Bridget McCormack (41:57)

Yeah, yeah, actually, in fact, you're right that many larger construction projects with extremely sophisticated parties on both sides have these smaller disputes along the way for which this tool will probably be perfect. Many of those disputes at this point they just think are not even worth, you know, even the large parties who know how to access every dispute resolution system don't bring them because it's just not worth their time. And that'll change. This will give everybody an option to resolve every dispute we're seeing. Not yet again because nobody has it in their contract yet. But our self represented parties in commercial and construction cases are just on the rise and have been for a couple of years. I mean I follow our sort of case filings day by day and the self represented parties in commercial and construction disputes are right now, I mean it's one month, so who knows, maybe it was a weird month. But January of 2026 was double what it was in January of 2025. So in fact I think this system is kind of perfect for the smaller party construction disputes. And as you, you know, as you know, there are also lots of those smaller construction projects where people really don't want to have to hire a lawyer to go figure out how to sort of out. So I think it's actually already perfect for those disputes.

Nilay Patel (43:17)

The documents only construction case pretty constrained. Right. And like things happen and There's a lot of documentation.

Bridget McCormack (43:24)

Yeah.

Nilay Patel (43:24)

What's the next one you think that is similarly constrained that you could bring the system to?

Bridget McCormack (43:28)

Yeah, I mean it turns out in lots of industries there are documents only disputes. I was talking to an in house litigation leader at an energy company and they have supplier disputes that are all documents only disputes. And that's probably perfect for those payer provider disputes. Disputes between hospitals and insurers which are, I'm sure, you know, like an enormous docket. It's probably perfect for those if you can get them both to agree. You know, time value of money means some people like to hold onto their money and they're willing to have a dispute resolution process take a very long time. But those should be perfect for an AI dispute resolution process. Right. We should be resolving those quickly and getting people their coverage. So I think there's actually an unlimited number of disputes for which this is appropriate. There are also some for which it will never be appropriate.

Nilay Patel (44:24)

Where will it never be appropriate?

Bridget McCormack (44:26)

I mean, this is just my view, but I believe that criminal cases, cases where the government is accusing you of something and you know, wants to take your liberty as a result of that accusation, or cases that individuals or organizations or even businesses bring against the government should happen in public courtrooms and with publicly appointed or elected, if you're in state court judges, that those have to happen in courtrooms.

Nilay Patel (44:58)

One of the things you and I briefly talked about the first time we met and talked about all this was the idea that there's transparency in the state courts. There's transparency when the government sues you and you need that transparency to build trust. Trust like you brought up the healthcare industry. There's zero trust in the healthcare industry. And there's a lot you could say about the consequences of the absolute lack of trust in the healthcare industry. If my medical billing goes to an AI agent, do you think that's going to result in more or less trust?

Bridget McCormack (45:23)

Yeah, I don't know. It depends on the AI agent who built it, what their audit trail looks like and how transparent they are about showing you what that auto trail looks like. Let me go back for a minute. I said payer provider disputes. I'm talking about disputes between healthcare organ, you know, hospitals and insurance companies. Do you think there's like a lot of confidence or trust in insurance companies? Because I don't think so. So when you know.

Nilay Patel (45:46)

No, not at all. That's kind of what I'm saying.

Bridget McCormack (45:48)

Yeah, but I mean, so imagine, you know, disputes between those two that could be resolved Instead of taking two years. So somebody's waiting for their insurance company to tell the hospital that they're going to cover their treatment and they're dead before they get an answer. Imagine if we could just resolve those right away. But in a system that transparently its work and shows its audits. Right. You tell me. My guess is some people would say, like, I'll take that tomorrow. Right. I'm waiting for my treatment. Yes, please send my dispute to an arbitration process that is transparent and shows its work. Great.

Nilay Patel (46:25)

I think some people would.

Bridget McCormack (46:26)

Yeah, yeah, some people would. And as I'm sure you know, there are lots of things that happen in public dispute resolution systems or in arbitration processes where the results are reported, where there's not a lot of transparency. Like, do you understand how judges come to the conclusions they come to? Like, we don't get to see the reasoning that goes on in their brain. There's no requirement that the judge shows her work and how she got from step A to step D. You know, what was her thought process? I mean, there is a. Hopefully, you know, most judges are supposed to write opinions that should show some of that. But as you know, in most intermediate appellate courts, there's a lot of opinions that are not written. And in trial courts, very often there's no written opinion. So. So I always want to ask, as opposed to what? If you believe that the current human led, overburdened justice system is one where people have lots of confidence, I want to introduce you to some folks who might disagree.

Nilay Patel (47:24)

Look, I was told that Samuel Alito can look into George Washington's heart and soul and determine exactly what he meant. Well, and that's just. I've been operating under that assumption for some time.

Bridget McCormack (47:35)

Yeah, I mean, there is that. So if you think that's a system that instills confidence, like, maybe, but not sure everybody would agree with that. Yeah.

Nilay Patel (47:48)

We need to stop here for another quick break. We'll be right back.

Kara Swisher (47:59)

Hi, everyone, this is Kara Swisher. And this week on my podcast on with Kara Swisher, I'm interviewing defense attorney Abby Lowell. Last year, he left one of the country's premier law firms and went independent so he could defend clients targeted by the Trump administration. People like Don Lemon, Federal Reserve Governor Lisa Cook, and New York Attorney General Letitia James. Here's a snippet from our conversation.

Microsoft 365 Narrator (48:19)

It's not random, it's not ad hoc, and it's not an outlier that their first attack after they had already neutered the Congress and they had politicized the courts was to to go after the lawyers and to go after the journalists.

Kara Swisher (48:33)

The full interview is out now and you can find it anywhere. You listen to podcasts and of course on YouTube. Be sure to follow on with Kara Swisher for great conversations like this.

Helen Havlak (48:45)

This week on Net Worth and Chill, we're joined by Victoria Garrick Brown, former Division 1 athlete turned body positivity advocate and entrepreneur who's dismantling the lies we've been sold about our worth. From battling eating disorders as a student athlete to building a platform that's reached Milk Millions, Victoria's journey as a masterclass in turning personal pain into purpose and profit. She opens up about the real financial cost of chasing beauty standards, why the Skinny Girl industrial complex is designed to keep us broke and insecure, and how she's built a business around authentic self worth without selling out her values. We dive deep into the economics of body image, the influencer money game, and what it actually costs to love yourself in a world that profits from your insecurities. Listen wherever you get your podcasts or watch on YouTube.com YourRich BS.

The Vergecast Host (49:34)

Over the last several years, AI companies of all shapes and sizes have been desperately trying to get their hands on every bit of available data to make their models better. This week on the Vergecast we have the story of how Anthropic destroyed hundreds of thousands, maybe millions of books and fed them all to Claude. Plus we have information on who in tech is in the Epstein files, what's going on with Netflix, Netflix, whether it's woke, whether it's going to buy Warner Brothers, and whether Peloton is going to successfully sell you a treadmill ever again. All that on the Vergecast. Wherever you get podcasts.

Nilay Patel (50:12)

We're back with Bridget McCormick, the head of the American Arbitration Association. We were just discussing the AI arbitrator tool and the way she believes tools like it can actually increase trust in the judicial system at a time when trust in institutions continues to drop. Now I want to focus on the ways in which the system could go wrong through hallucinations, biased outcomes, and in many ways you could obviously see a tool like this having adverse effects. And I wanted to ask Bridget how she and her team are trying to protect against all this, especially now as the AI arbitrator is starting to hear real cases.

Nilay Patel (50:45)

So the flip side of this, and this is us covering AI at the Verge for years now. There's it'll just talk to you. And some people are very happy with that, and that is far more trust than they have in Even the other people who live in their houses. Right. Like, we see that play out all the time. The, the downside of that is that these systems hallucinate at high rates that they are tuned to please you. And we can see that all over the place that they work differently, they layer differently. In fact, the chances of them getting something wrong kind of exponentially increase as you stack them up in, in these ways. How have you protected against that here? Because it feels like, yes, you can increase this sense of agency and trust, but the downside is this thing might just be making it up as it goes along.

Bridget McCormack (51:29)

Yeah, huge issue. Obviously, we, you know, if you were to just take your dispute, you know, all the documents in some dispute you're having and throw it into ChatGPT or into Claude, you'd get, you could get a, you could get a result right now. Right. Like anybody could do that. It might be okay. It might in some cases not make a mistake. As, you know, hallucinations are, are. You don't know when exactly or why the frontier models are making mistakes. But that's not what we built and that's why we're moving so narrowly and so slowly. Your system has to be governed, trained and grounded in the kind of reasoning that you're asking it to do. So it sounds extremely narrow that we're doing documents only construction cases, but there's a reason for that. That's where we could build a governed and harness, you know, agentic system. We keep a human in the loop to make sure that before an award issues there were no hallucinations, even with our governance. And we're going to be very transparent about all of our audits. And that's, I think, really critical to growing trust. I think a lot about whether the frontier models get so good eventually that they can just do this, that you don't need an institution training and governing an agentic system in a specific kind of dispute because we move past the age of hallucinations. It doesn't sound like that's imminent today, but I don't know if it's imminent six months from now. I mean, I didn't know last week that agents were going to be on a subreddit talking about us. I was, wasn't. I didn't know Malt book was coming. Right. So you can surprise me. For now, I think you have to have governed, transparent, audited systems so people can grow that trust. We have a white paper. We led an academic under the tent, John Choi, who's actually, he's a law professor, but He's a technologist as well, and we just let him under the tent to kick the tires of what we were building to, to be able to test how it performs against the human baseline. And the results are excellent. So I'm excited for folks to see that when it's all ready to go. But it's an important question. Again, as opposed to what? You've met humans, right? And you've met humans who are judges if you think they're getting it right every single time they make a decision. I want to introduce you to some folks. Let me just. This is such a. Like, anecdotal stories are kind of useless when we're trying to talk about something important like this, but I was the chief justice of the Michigan Supreme Court. I'd been in that role, like, three years, and we were working on some reforms in the probate court system. And some of the probate court judges, I guess, didn't like them. And one of those probate court judges from a county not that far from where I live got on his listserv and was, like, just talking trash about me. He said that I was at a forum and I had said a bunch of stuff and, like, how outrageous it was. Fine. People should criticize me whenever they want. The thing was, I wasn't at that forum. My colleague Megan Kavanaugh. Megan Kavanaugh, also a white woman with an Irish name, was at that forum. And I know Meghan, she probably did say those things. So I called the guy. I said, judge, you've made this claim about me on the listserv to every probate courts in the state of Michigan. But I was. I wasn't there. I wasn't at that forum. I have an alibi. And you know what his answer was? His answer was yes. You were. What do you do with that? I mean, what do you do with that? He won. I was like, well, I don't know. Okay. I mean, what do you even do with that? So if you think that the human beings who get tired, who get hungry, who like all of us come to the table with. With cognitive biases are getting every single thing right, then you have a lot more trust in the public justice system than I think most people do.

Nilay Patel (55:51)

I don't know that I have a lot of trust in public justice system. What I know about those guys is that they get old and sometimes they go away. I wish more of them would go away at higher rates, but sometimes they go away. Sometimes they get replaced by newer, different people with different biases. And the system Replenishes at some rate. Rate that feels like accountability, right? You can ruin that guy's reputation if you would just say his name. And Bridget, I invite you to say his name out loud right here, if you would.

Bridget McCormack (56:16)

His name was.

Nilay Patel (56:17)

It was worth a shot.

Bridget McCormack (56:20)

Go ahead. Nah, nah, not important.

Nilay Patel (56:22)

It was important enough for me to ask. Anyway. That's like, that's a system that people understand about humans, right? They have reputations, they have histories, they have experiences. You can Google them. There's. And then sometimes they die, right? And they just like go away.

Bridget McCormack (56:35)

They.

Nilay Patel (56:35)

You get some new ones and at least the system replenishes and evolves. An AI system running on a cloud service that you can't see on a data center that you might have hated being put in your community does not feel accountable to you in that way. And maybe it's getting it right more often on whatever metric that someone who is not you has decided is important, but you can't actually hold it accountable. And that, to me, feels like the biggest gap in all of these automated decision systems that no one wants to account for because the efficiency gain is so high.

Bridget McCormack (57:08)

Yeah, I mean, I think that's a completely fair point. And again, I go back to, you know, where I believe disputes should be decided publicly, and I think that that should be true no matter how excellent. I mean, eventually probably the judges should be using some tech to help them make sure they don't make mistakes that will undermine accountability and undermine trust. But not all disputes are created equal, Nilay. I mean, we all have lots of disputes, some of which we just think like, well, I don't even have the time or the energy or the resources to get that one resolved. But if we did, if you could really resolve every dispute, if every human being could have a will or a plan for what happens if they become incapacitated or die. If every small business could plan for the disruptions that befall every small business, we'd have a better world. I mean, disputes are not great, right? They make a mess of economic relationships, they make a mess of personal relationships. And resolving them, in fact does lead to more peace, more stability, more economic growth. If that's your thing. Resolving disputes is good. Right now, we do not have any way to resolve most disputes because our one to one bespoke, built in 1776 system is no match for the kind of disputes we have today. And the volume of disputes we have today. And it hasn't been for four decades. It's been a very long time since public dispute resolution systems have been able to address the problems in their local communities. So why wouldn't we have more options so people could choose the right option for them in the right moment? There would be some family disputes where parents prefer not to go to court. They want to work things out privately. They can do that now. They can go to mediation and just file a resolution. That, to me, seems like a good idea to be able to offer people a way to move through a dispute dispute so that they come out on the other side both better with respect to each other, better with respect to the other people who are impacted by the dispute and even feel like they were able to manage that with some agency. I don't know why we wouldn't want to have more options for more people to give them agency.

Nilay Patel (59:43)

My wife, as it happens, is a divorce lawyer, and I do think an AI agent of her just talking her clients through the decisions that were made a long time ago over and over again would actually be very helpful for her in many ways, because that seems like a lot of her job. I understand what you're saying there. You said this thing to me the first time we met. That again, I've just been thinking about ever since you said that several years from now, 10, 20, 30 years from now, we would think it was crazy that we ever had human judges making as many decisions as we do today.

Bridget McCormack (60:12)

Yep.

Nilay Patel (60:13)

You know, you've got one case in the system. Is that borne out? Do you feel that as strongly as you did when we. When we first talked a few months ago?

Bridget McCormack (60:20)

Yeah. I mean, I don't know exactly when the. The world turns and we're finally able to manage lots of disputes in different ways, including AI dispute resolution systems. But I feel pretty confident we will get there. I think I said to you at that time, and I still agree, I mean that for sure, in some number of years, we will think it's amazing that we let humans drive cars. Right. When my kids started driving, it was the most terrifying time of my life. Right. Not really for them, but I couldn't believe we were letting them out onto the public roads with all these innocent people out there driving cars next to them. I think at some point we'll think that was insane that we let people drive cars. And I think we'll also think it was probably crazy that we thought a human being had to oversee the disputes between private parties who want to be able to move through that dispute and be at a better place. That inserting a human with her flaws and her biases and her limitations was no Way to, to, to manage this railroad.

Nilay Patel (61:22)

One thing I've been thinking about throughout this conversation is like, who gets access to these systems? Who gets to make it feel fair? Where does the trust in the agency come from? A pervasive criticism of arbitration broadly is, well, it's a service. Right. It's fee for service. Even though the AAA is a nonprofit, there are other, I would say more rapacious providers of arbitration services that do run them as for profit businesses is you have clients, the clients have to be happy with the outcomes. And that does feel like it changes how people perceive the whole process as you automate that.

Bridget McCormack (61:56)

Right.

Nilay Patel (61:56)

And you have big clients who are paying for lots and lots of arbitration and they can see that the automated system is either helping them or hurting them. Should that affect how people think about the fairness of the system overall? These are fundamentally your clients and you're building a tool for them.

Bridget McCormack (62:10)

Yeah, I mean, this is where I feel very, very lucky that we have a nonprofit mission. And our mission is to expand access to alternative ways of resolving disputes to as many people as possible. But we're like a court. Right? We do serve parties, but there's two parties in every case. There's parties on both sides of every dispute. And we need to make sure both sides, both parties feel satisfied with the dispute resolution process they got. I thought you were going to say, as the cost comes down as a result of, of even sort of AI automation for parts of disputes or full disputes, depending on the dispute, it's therefore harder for dispute resolution providers who need to make money to make money on that process. That would be a problem. And I can see how it might be. But again, really happy that at the end of the year I don't have a bunch of owners that are looking for the their profits. We have a mission. If we can bring the friction and the cost of dispute resolution services down significantly and therefore offer it to a whole lot more people, we're serving our mission.

Nilay Patel (63:29)

Yeah, but let me just contrast that to your previous role in the state courts as the Chief justice in Michigan. The Michigan Supreme Courts belong to everybody in Michigan. Michigan.

Microsoft 365 Narrator (63:38)

Right.

Nilay Patel (63:38)

If no matter who the parties are, they're yours. You're paying taxes, you walk in and maybe they work and maybe they don't, and maybe no one knows who was at the function saying what, but like it belongs to you in some way equally. In arbitration, there was recently a case that like Disney said to somebody tried to sue them in a theme park. You signed the arbitration agreement for Disney. Plus, like, we're Going to arbitration, that's pretty one sided. That form does not belong to both parties equally. Right. And that imbalance seems like where the loss of trust, at least in the consumer side that I cover so much comes from. How do you make sure, even as a nonprofit, that the party that is paying for and driving the system doesn't make sure the automated system, in particular the automated system doesn't favor them over time? Because that's a pretty easy outcome to start programming in.

Bridget McCormack (64:25)

Super good question. As you know, easier to train a data set than a human. So frankly, and let me step back for a minute. In our consumer cases, again, we do not accept cases unless consumer B2C cases unless a business has cleared their clause with our due process protocols. So we're again in a lucky position there, I guess. But back to the who's in charge for us? If the consumer feels like the process wasn't fair, that's not going to work. We're in the business of actually giving more options to more parties. And if half of the parties in one kind of dispute type, I should say we mostly do B2B cases. But when we do B2C and they've satisfied our due process protocols, it's critically important to us that both sides feel in the individual case that they were treated fairly if it's algorithmic, I mean, if it's, you know, automated to some extent, even in part, that's just as true. But easier to show our work, you know, we did a lot of training, judicial training, and we do a lot of arbitrator training when human arbitrators decide cases to make sure that parties get, you know, equal treatment, fair treatment treatment. But you can debias a data set a lot easier than you can debias a human. And so when you benchmark and do your audits of your AI arbitration system and you show your work, you can either convince the public that it's treating both people fairly or you won't. That's for us to show.

Nilay Patel (66:09)

As you can tell, I'm fascinated. The reason I keep poking at this, our readers of the verse, they like everybody, every other consumer in modernity, you just live a life of signing contracts and like you don't get to negotiate those contracts. But you literally cannot participate in society without having signed dozens upon dozens of arbitration agreements. And you're, and I hear you say we have to get it right, we can't get it wrong. What is the mechanism of getting it wrong and then being forced to change when no one can negotiate the contract? That Landed them in arbitration in the first place. Do you know what I mean? Like, if there's some public accountability that's like the AAA got everything wrong for a year with the AI system, then what? Because I can't go to all of my service providers and say I don't want to use the AAA anymore. I saw this news report.

Bridget McCormack (66:55)

Yeah. I think you're asking like when you enter into any kind of B2C contract, you're just a, you're buying a new refrigerator, you don't really get to scrutinize it and say I want to change the last clause. They're not, you know, people aren't really entering into arbitration. Agree agreements, arbitration clauses are just part of contracts they're entering into.

Nilay Patel (67:16)

In the construction case, right, you've got two parties and presumably they've contracted for the sale of lumber and they've come to. There's actually actual like meeting of the minds and they might have negotiated in. We need arbitration because we got to move fast and fine, automate that away. And if you get it wrong, maybe the next time you try something else. Right. And there's. Yeah, there's some mechanism of change built into that.

Bridget McCormack (67:36)

Yeah.

Nilay Patel (67:37)

I sign my, the terms of service LG Refrigerant, which does have an arbitration agreement and I'm like, that sucked. My refrigerator exploded and the arbitrator ruled against me. The next time I buy a refrigerator, I can't go to LG and say I want a different arbitrator. And so I don't see where that mechanism comes in for most people. Because most people are just signing tons and tons of arbitration agreements all the time.

Bridget McCormack (68:00)

Yeah. You don't mean I want a different arbitrator. You mean because you can't go to. I mean if, if you're buying a refrigerator from Joe refrigerator store on your corner that doesn't have a contract with an arbitration clause and you end up suing in court, you're going to go probably to small claims court. You're going to have not been able to figure out how to file properly and your case will have been dismissed. I'm telling you that's what happens in most cases where people try and file cases in courts. Are you going to be able to go back to Joe?

Nilay Patel (68:33)

I would have gotten it right.

Bridget McCormack (68:35)

Well, you, you would have. That's fair. But most people, and they aren't going to get it right and they are most often never going to make it past go. I mean look at the high volume dockets in state courts. Just take a look at how many cases on the consumer debt docket, which is, by the way, the modal case in state court right now, literally, the modal case in state court is a consumer debt case. And go take a look at how many of those are just dismissed because the consumer, not the business, didn't meet some, you know, I don't know, court rule 26.4 that said you had to have a triplicate when you responded to the thing. You're not going to be able to go back to Joe's refrigerator service and say, like, hey, that court process wasn't fair because there's no way I'm going to be able to read the Latin and figure out that I have to file and triplicate my thing. So I want to go to arbitration where at least I can just show up and in plain language, tell a person what happened to me, and a person will listen to it and answer it. I mean, I understand that there has been, like, a pretty successful narrative that this process doesn't work for individuals, and I am sure there are places where it doesn't. But not every arbitration provider and dispute resolution provider is created equal. And some have different missions than others. And that matters. Right? So I think there could be a campaign to say to. I have no idea who. I don't know if LG uses us or some other provider to say to lg, we want you to switch to a provider that actually has due process protocols. That's what we want you to do. Or you could go to Congress and you could tell Congress to amend the FAA to say, no, no B2C cases should ever go to arbitration. I understand that you can. Apparently, that's how legislation works, that you can talk to Congress and they'll fix things. But I don't know.

Nilay Patel (70:38)

There's a lot of hopes and dreams in this episode.

Bridget McCormack (70:40)

Yeah, yeah, yeah. And I have no horse in that race. If Congress were to say tomorrow, we don't want B2C cases in arbitration, we want them all in court, I think it would probably be a mistake because I've seen how courts operate and the resources they don't have. Believe me, there are lots of judges who are trying to do really well by all those folks on their dockets. They just don't have the resources or the time, and they have these archaic rules. So I think it probably wouldn't be good for everybody. But I certainly have no horse in that race. My view is I can create dispute resolution services and processes just to give everybody more options. And I want people to Want those options. Options. I don't want people to like be stuck with those options. I want to create something that's so good that you want it. You want to go to LG next time and say, can you please put an American Arbitration association clause in my contract? Because that's where I want to resolve my dispute.

Nilay Patel (71:31)

I appreciate the ambition. It's a lot to think. I mean the idea that I'm able to negotiate the terms of service for my refrigerator, maybe that, that is what I think Congress should allow us to do. But that's a different again, yet again, a different podcast. When you think about the, the, the scope of this, the timeline of the investment that you're making. You got one case in the system now. We're going to see how it goes. You've obviously run some simulations on previous cases and I think that they're going to, you've got some studies that say it's going well. How fast does it go from here? What's Next? Is it 10 cases? Is it. You're, you're on a sales trip? Is it. What's the speed?

Bridget McCormack (72:07)

Such a great question. I mean, so there's at least two variables that, that, that we're following. One is just how quickly our team, our engine and the related folks that work on that SCRUM team can build it out for different case types. Right. Different document solving dispute types. And then whether there are some institutions that want to use it for internal dispute resolution. We've had some interest in that. That's going to take a while. That's going to take us a couple of years to build out each dispute type by dispute type. So that's slow. And then there's the when do people, when does the worm turn? And your guess on that is as good as mine. I don't know if it's two years, five years or 10 years. I'd be very surprised if in 15 years people are still opting for a slow, human driven and people, businesses in particular, B2B documents only disputes are opting for a slow, expensive, human led process. I'd be very surprised. But that's a really conservative answer to your question. Do you have a better answer? When do you think we're, how quickly do you think. I mean, it's going to go with a lot of the rest of the way. The technology is going to disrupt our lives, right? It's all kind of connected. Yeah.

Nilay Patel (73:30)

I mean if you look at our stack of guests over the past few months, we just had DocuSign on the show. They're like AI is going to write the documents for you because we have access to your business intelligence. We had LexisNexis on the show. He's like, the lawyers will just start doing the research here and drafting out of these claims. And I don't. That seems very dangerous to me. But you see, this universe of legal work is being automated very quickly because the AI systems are good at words. You can either hire a 26 year old who's been drunk for several years. That was me. And they can be whoever they are as a first year associate, or you can have a robot do it. And maybe that's the same. I think that the question that I have in sort of a response is I think it will happen very fast and then it will slow down because everyone will realize there's not a next generation of people who understand how to control the systems. And that investment still needs to be made and the outcomes of those systems are not as good as we wanted them to be.

Bridget McCormack (74:27)

It's a completely different training. You know, my podcast is on AI and the future of law. And I'm just talking about, and you might know, two careers ago, I spent 15 years on the law faculty. So the training model is kind of broken for what lawyers are going to do in, I don't know again, if it's two, five or 10 years. And I don't see anybody moving extremely quickly to figure out what the 2.0 training model is. Now I want to say I don't think the 1.0 training model was that great. I'm not sure that sitting in the basement looking through a bunch of boxes of documents really made you an excellent lawyer or strategist or advisor. I'm not convinced that that was perfect. So I do think there's opportunity. I'm an optimist. I think there's opportunity to build a better system. But you're right. I mean, there are going to be ways in which some of this moves faster than the rest of us and we're not ready for it. I mean, one other thing that I spend a lot of time thinking about is how many B2B contracts are going to be negotiated and executed by agents. Like Walmart is doing. Some significant number has agents negotiating and executing a significant number of their contracts in a B2B agentic commerce world. And you probably read these estimates as much as I do. Maybe some people say that by the end of 2027, as many as 40% of contracts might be negotiated and executed agent to agent. Sometimes agents will make mistakes right Like, I mean as good as they are, they will make mistakes. What's the dispute resolution process there? And is it just, is it a, is it a on chain process that you know, maybe it's better like it's an upstream automated dispute resolution process? I'd like to be in the conversations to figure that out because you need that somewhere, right? Your agentic commerce is only as good as your process for fixing it when it breaks. But nobody's talking to me about that. I want them to. So yeah, lot to do yet.

Nilay Patel (76:19)

Literally just before we sat down, Goldman Sachs announced that it was putting AI into more of its accounting functions and other functions at the company. And yeah, you can see the acceleration. I think my prediction is we're going to accelerate into it and then we're going to pump the brakes really hard when we realize these systems are not as predictable as we want them to be. But I will have you back faster than 15 years to see how it's going.

Bridget McCormack (76:41)

Okay, good.

Nilay Patel (76:42)

I've loved this conversation. Thank you so much for being on Decoder.

Bridget McCormack (76:44)

Bridget. Yeah, so much fun. Great to see you. Thanks.

Nilay Patel (76:48)

I'd like to thank Bridget McCormack for taking the time to join Decoder and thank you for listening. I hope you enjoyed it. Do you like to let us know what you thought about this episode or really anything else at all? Drop us a line. You can email us atdecoder the verge.com we really do read all the emails. You can also hit me up directly on Bluesky or Threads. You're also on YouTube. You can watch full episodes. Decoder Pod and we have a TikTok and an Instagram also at Decoder Pod. If you like Decoder, please share it with your friends and subscribe wherever you get a podcast. Decoder is a production Verge and part of the Vox Media Podcast network. The show is produced by Kate Cox. Nick Statt. It's edited by Ursa Wright. Our editorial director is Kevin McShane. The decoder of music is by Breakmaster Cylinder. We'll see you next time.