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Tyson Mutrix (1:20)

This is Maximum Lawyer with your host Tyson Mutrix. This week's episode is going to be a little bit different because I'm going to go a little bit more in depth on some things. This is why this is going to be a Tuesday episode. It's also one of the very first solo episodes that I've done on the Tuesday show. And so bear with me because this is going to take a little bit of getting used to for this episode because I don't have a guest and it's going to be a longer episode. Bear with me. I've got a lot to cover. This is going to be a really good one though because I'm going to be going through the recent AI Trends report that was released by Mary Meeker. If you don't know Mary Meeker is she is known as the queen of the Internet as is what she is has been dubbed and that's because she was highly involved. She released the, the Internet Trends report back in the 90s. Early on, whenever Internet was it was something that, you know, people were using for, for email but they really had no idea what the Internet was going to become. And she had a pretty, pretty good report that she released back then that was pretty accurate. And that's why I want to go through this report because this one is it's going to be kind of a doozy. It's, and it's not just going to be some sort of, you know, tech update. It's going to be more of probably a warning shot just to kind of get your stomach right because it's, it's very revealing. What they just kind of give you a gist in the report. By the way, Mary Meeker is not the only one that created this report as she has a team that built this out. So I do want to make sure that ever it's, it's, we don't say she's the only one that created this. There was a team of people that created it, but she and her team, you know, Mary Meeker and her team, they argue that AI isn't just a tool, it's actually an infrastructure. And that's the key part of this. It's an infrastructure. You got to remember that part of it. And so what this means for the legal industry and really every other industry in the world is that everything is about to be rebuilt from the ground up. My, my favorite quote that I've heard about this and from her, and we'll unpack a lot of this in a little bit. But it's that AI is the new electricity. And that is, if you think about it from that perspective, AI is the new electricity and what it was like whenever electricity started to become mainstream. You can kind of get the, the idea as to how big this is becoming and so kind of buckle up. We're going to unpack a lot of this going forward and there's, there's a lot to go through. Just, you know, for those of you watching, I'm not going to be looking at the camera the whole time. I am going to be referencing the report and some segments I've pulled from the report. I'll try to also share some of the charts that, that are in the, in the report. I'll make sure that the report is available at everyone that's, I'll make sure it's in the show notes. So if you want access to it, you can get access to that in the show notes. Let's start by talking about how the, the adoption curve and what's really interesting is the, the adoption curve is exploding much faster than I think maybe any technology in history. So here's one of the quotes from the just the third page. AI usage trending is ramping material faster and the machines can outpace us. So if we look at some of the hard numbers. So ChatGPT now has over 800 million weekly active users, which is just a staggering number. It reached 100 million users in just two months. And that was, I mean that's years ago now. It's faster than any product in history. It now has over 1 billion daily inquiries. That's hitting 365 billion annual searches in two years. That's five and a half times faster than Google did in its early days. So if you can kind of compare it to how Google did and how, how fast they grew, it's this, five times, five and a half times faster than that. And it's not just some sort of, I think some people may have thought this was sort of, you know, just sort of a hype or just some sort of trend or fad that was going to, the going to fade. No, this is, this is, has really deep, not just deep, but global saturation. And so it's not just you. Some of the other rumor like this isn't just being used by us and our law firms, clients are going to be looking at it, judges are going to be using it, regulators, people that are creating our, creating our laws, legislators, all that. And this is something that's accelerating. It's, it's going to really have really deep, deep effects on all of us. And here's the quote from the report that was talking about electricity. AI is not a product trend. It is an infrastructure reset comparable to the invention of electricity. So reset comparable to the invention of electricity. Sort of a, whenever I heard that, I was like, oh my gosh, that's sort of mind blowing. So the CEO of Nvidia, who I actually think is a, just a brilliant, just a genius, just absolute brilliant, genius, great communicator. He says these AI data centers are in fact AI factories. You apply energy to them and they produce something incredibly valuable. And if you think about that, these aren't just big computers that are computing. They are this new infrastructure layer that really the legal world will sit right on top of it. So if you kind of think about it from that perspective where you, you've got these different layers, these different warehouses, different infrastructure, but, or I guess one major infrastructure, but the legal world is just one layer. There's so many different layers that are, that are involved in this. And what is so kind of crazy to think about is that our firms won't just, we're not just going to be using AI, we're going to be really running on it just like, just like electricity. So you, we are going to be so plugged into this in the coming years that it is going to be just as if you're paying for your electricity or your Internet or anything else, or your water, any of your utilities. It's going to be much like a utility the way we think of utilities these days. Here's the next part of the report. Inference costs are dropping fast. They said so. And here's why this matters. The cost of using AI is falling off a cliff according to them, even while capability rises. So the cost to serve 1 million tokens and tokens is a lot of how, how a lot of these different AIs are running and you get so many tokens for so many dollars. It. I'm not even going go into tokens because it's, I think it's more complicated than it needs to be. But the cost to serve 1 million tokens dropped 99.7% between 2022 and 2024. That is massive. Meaning, I mean that, that, that means that the barrier to entry is so much lower really is when it comes to a cost perspective. Energy required to generate one token dropped by 100 the past, so 105,000x in the past decade thanks to Nvidia's hardware improvements. And that's what. Something I learned from this report. I was not aware of OpenAI. We think of OpenAI as sort of this overnight success, but in reality they've been around for about a decade. I think they've been around for about nine years. This has been going on faster than, or longer than we thought, at least longer than I thought. I didn't know that these companies were this entrenched in this and this working on this for that long. I thought it was sort of a recent development, but not so much what used to cost dollars can now cost pennies. And what cost pennies may soon cost fractions of a cent. Pretty interesting thing. So this is this what I think, I think what's really awesome about this is that a lot of the small law firms are now going to be able to compete using really elite AI tools with the big firms. The firms that really need to work worry, in my opinion are the bigger firms, the Morgan and Morgans of the big defense firms. All of those, those massive firms that are spending, you know, gobs and gobs of money on their, their massive infrastructures. They're, they've got these just massive teams for marketing and you name it, These, these smaller firms are going to be able to compete at a, at a pretty low cost. And that's, I think that's pretty awesome. There is a. Now there is A caution to this too. The window. According to them, the window will not last forever. As the demand goes up, so is the competition. And if you're not building on it now, you're going to end up buying later, they say, and at a premium. So now is the window. We are at a very unique time where the costs are low, competition is, is fairly low. There is competition, it is increasing. But as time goes by and the, the competition increases, if you don't build now on top of things, you're going to end up paying for it, paying, paying a premium for it. Kind of like land in a way where, although there's not, it's not gonna be a limited resource, kind of like land, it's going to be. There are going to be so many servers as time goes by, there's only, only going to be so much access to the data, the these data farms that you need. If you just look at Grok over the last, I think it was a few, I guess about a month ago where one of their servers caught fire and they had a massive downtime. I guess it wouldn't. I don't know if it's Grokos X. X is, I think it was, I don't think Grok was affected, but X was affected where they were down for several hours because their servers couldn't handle it, because they lost part of them because of a fire. Things like that, where our access to certain things are going to be limited as the competition increases. The rise of the AI giants is the next part of this where a new class of AI is now emerging. It's less assistant, more service provider and that's on page 89. According to them, we're entering the AI agent era. Think less chatbot, more executive assistant that can schedule meetings, draft motions, file documents, cross check statutes for you, generate deposition summaries, interface with your CRM. You've already got the major companies that are, they're rolling out. So OpenAI has as operator, they also have assistance. If you pay for the pro version, I think it's called assistance is what it's called. But they also have an OpenAI operator which is an agent. I actually used it to book my flights to Hawaii not too long ago. It was pretty cool. Salesforce Agent Force, they've got that. Amazon has Nova anthropic Claude, it's 3.5 computer use. I'm not as familiar with that. I've never actually used that. So I don't know exactly what that that is. But what's interesting about this and some of you already know this but some of, I think many of you don't. These agents, they're not just answering questions, they actually act on your behalf. So when I say that I use that agent to actually book my, my flight, I actually use it to book my flight. It actually, I gave it my login, it went in and it booked my flights for me, which is pretty phenomenal. So you give them goals and they do the work. That's how it works. What the thing I don't like as much about operator with OpenAI is that it's kind of like a one off thing where something comes up, I ask it to do it, it does it, it doesn't always do it though. That's the other thing too is it doesn't. But you can run multiple windows at the same time for Operator, which is kind of cool. But I, I do think it's, it's uses somewhat limited when it comes to like just one off task. It's not like it can take an email as it comes in and then do something with it on its own. It's not, it's not that advanced. We're building out other things for that. But when it comes to open AI it doesn't quite do that. But I mean just think about though imagine you ask your law firm agent, you know, follow up on all open demand letters and then it does it. And without even touching a keyboard, nothing else. It does all of that for you. It, let's say it does all your leadership reports, right? It goes through it cross checks everything, make sure everything's accurate. Really there's some really great things that are, that are going to be coming. It's going to save us a lot of time. It's going to be more accurate. I, I don't think right now it's going to be, it's, it's super accurate. I think that there are some, definitely some flaws but going in the future as things get better and better, removing the human from a human error from it's going to be pretty key. I know that some of this may seem far fetched right now, but it's really not. It's, it's already being used very widely in large corporations. I don't remember if I mentioned this or not, but I have a friend that's in Jiu Jitsu, I'm in Jiu Jitsu with and he was telling me how Walmart's using it. He works in a warehouse where he's got the AI in his ear as he's doing his work. And let's say he's going to pick up some, you know, he works in basically a massive freezer. It's like negative 15 or 20 degrees in the freezer. It's pretty, pretty wild. But let's say he's going to pick up some ice cream and he's picking up six cases of ice cream. So he kind of counts them at 11 through 6 and then there's only one left. It will kind of say in his ear, it'll give him feedback on that or he'll talk to the AI and his via the microphone, say hey, we only have one left. It'll update the system. It's very, very vast. It tracks their time, how much time they spend on the floor. There's so many things that, that they're doing with it to increase their efficiency and that's just how, how they're currently, how current they're currently using it. That's just one company. You gotta, you gotta know all of the major companies are using it. So it's, there's going to be at some point, if you're not in, there's gonna be the haves and the have nots. And I, at this point I really, I really don't want to be one of the have nots. I want halves because it's going to be a massive differentiator if you're not involved in it. All right, so let's talk about sort of what, what law firm owners need to do next. And this is not necessarily in the report, right. But I do think it's important to figure out what it is as law firm owners. What, what do we need to do? Because it really comes down to, to economics. The, if you look at the capital expenditures they're spending by the big six tech companies, it's up 63% year over year. And that's so over $212 billion is now being poured into AI infrastructure trends among the big six tech companies. So at the same time AI performance has surpassed human levels on legal and professional reasoning benchmarks, which, I don't know if you realize that, but that's, that's something that is a fairly recent development. There was for the first time, I can't remember which model it was, they, they were able to beat, I don't know if it beats the right term, but they were able to take the touring test and win. I don't know if that's the way of putting it, but that's essentially what, what happened. So some of the things you can do now as A law firm owner. You need to audit your processes, find all the repetitive boring work that your employees don't really like doing and find a way for your AI to do it. This is very similar to sort of an exercise that I talked about a long time ago where you take all of your, your entire case process from start to finish and if you haven't finish and if you have multiple niches, you're going to do this for each one of the niches. But from start to finish go, you know, document the whole thing, write it out. You can handwrite if you want to, which if you, you could actually handwrite it and then upload IT to open AI or any of the other LLMs and it could probably, I think it could probably read your handwriting. I'100% sure about that. But I'm pretty sure you can, you can document it like that and then final the repetitive boring tasks that your employees don't like to do, you probably know what those are. You can ask them and then find AI to do those. And that is a thing about the one the sort of the, the task that sucks the life out of your employees find make their lives better by finding those tasks that I think it's a really easy way of doing it. The next part of this is assign agents to them. So even the most basic ones so intake forms, FAQ bots, CRM follow ups, have someone create a bot to like this is more advanced one review on your case files, audit your case files and see if everything's on track. See if there's anything that's stalled on any of your cases. So really go through and you're going to want to create human involvement, some sort of stopping points where it triggers a, some sort of human involvement. So don't just completely rely on agents. I when I was at Disrupt, that's Honest conference, I was talking about how you could right now create a completely AI and automated law firm. It'd be a very mediocre law firm though because you do want to have that human involvement. But AI if you add in the human angle with the customer service angle that you know, have that human connection and then adding the AI to it, I mean you're going to create, you can create a super power of a law firm that, that we've never seen up to this point. So and then the third part of this is after you've so you bought your processes, you've assigned your agents and then really invest in training and not just for, for tech and but you want to not just for your employees, but for your leadership teams as well. From top to bottom, your people need to know how to work with AI. And I said with AI, not, not, not use AI, but actually work with AI because that's how it's going to be. You're going to be managing agents in the future. You're not going to be just managing people. You're managing AI agents and people at the same time. I know it sounds crazy, but it's just how things are going to be. So keep that in mind. And I don't think. I'm not one of the people that thinks AI is going to replace lawyers, but lawyers who use AI, they're going to replace lawyers who don't. It's just what's going to be. There might be a very, very small niche place for people that don't use AI like, but it's, it's going to be few and far between. It really is. So that's some of the few, few parts that I want to make sure I definitely covered when it comes to this episode. Now let's, let's kind of dig into a little bit more of the report and some of the, some of the things that it actually, that it covers because I want to show you some of these charts. It's. Because it's quite interesting. So. And for those of you that are just listening, you can see these on YouTube. I'll also share it in the, in the show notes, but also talk enough about these that you, you're not going to need to, you don't need to watch if you're, if you're just listening. But. So the first chart and these, each page is. It's four. There's actually four different charts on each page. So I'm going to try to make this as easy to see as possible because it's, it is kind of hard to see. All right, so the first one is seen. And that's a question. Seem like change happening faster than ever. Question mark. Yes, it is. And you can see this chart. So starting in 2005, all the way up to 2025. And these are developers and leading chip makers, ecosystem. There are, if you go back. So there's really hardly any up until, I'm guessing, based on this, probably about 2015. And then it explodes from around that time frame up to, you know, 6 million developers in 2025. And there's the details. It does give you the details. It says that details are on page 38. And then the, the second chart that I want to cover is AI User plus usage plus capital expenditures growth. And this has equals unprecedented. And you it's a similar chart where it goes back to October of 2022 which is if you'll remember that's around the time that OpenAI was announced and it became a really big thing. But this is the leading US based LLM users. And this is goes from you know, so it's up to 800 million this year or I think it's 800 million a month. I think, I think is what it is. But you go back, it was about half of that about a year ago at low. But yeah, I'd say so between this, I don't know. It was about half that six months ago in 2023 it appears ish. It doesn't give me. It's not completely broken down by years. I'm kind of having to guess here a little bit. But you've got. I'd say it's probably, it was probably 100 million. So it's. You're. We're already at 800 million. It's I mean extremely like just massive, massive growth. And then you got the next chart. It's AI user plus usage plus capital expenditures growth. And this is Internet versus leading US based LLM. So turn total current users outside North America. All right, so so 33 years in and this is so yeah share of total percentage current users so year at year three 90% at 20 year 23. So Internet okay so this is going by Internet over 33 years versus Internet versus LLM over the next 33 years. So in just three years, okay, the total current users outside of North America is 90%. It took about, so it took 23 years for of the Internet to get to 90% of users outside the U.S. so that is significantly different. So the adoption much, much faster than when it comes to Internet. And then this is the big six. So US USA technology company capital expenditure and this is where how much money is being spent each each year on AI. And we've got you know, this year $212 billion which is. It's up 63% from last year. Pretty massive. All right. And then this is the cost of key technologies relative to the launch year. So you've got electric power. You've got. They're comparing electric power, computer memory and then AI inference. So you. It has it where it took 72 years for electricity to get down to the cost of where AI is now. And it took, let's see, I'm looking at some computer memory, let's say about 30 years 20 years, 30 years roughly. And according to this chart, I don't know, maybe two years. So for the cost equivalent. So it took a lot longer for electricity costs to go down as much as it has for AI. The next one is so leading US USA based AI LLM revenue versus compute expense. And you've got the revenue has gone up steadily and the expenses have dramatically decreased is what as I think, I think is the way I'm reading this. So revenue is blue compute expense red. So this looks like the compute expense has gone way down and the revenue has gone way up. So that's of the difference is about $8.7 billion, which is pretty good for them. Good for them. Then we got the AI monetization threats equals rising competition plus open source momentum plus China's rise. So this is the, this chart is leading US LLMs versus China LLMs Desktop User share. All right, so LLM number one we've got so February of 24, the US is leading. I'm trying to actually understand what this chart even means. The US is oh, this is by. Okay, this is by year. So you got February 24, February 25 and then April of 25 you can see quite a bit of an increase in China's usage. In February of 24 they weren't using it at all. And then USA ll number two, they've got their, oh their share. So their share has gone up. And then so OpenAI is really appears to be under threat. That's the way I'm reading this. And then you've got China versus USA versus the rest of the world industrial robots installed. And it's interesting so in 20, from 2014 to 2023 you have pretty stagnant for the U.S. it's kind of stayed the same. And then you have for the rest of the world and China, China's has definitely had the greatest adoption it appears and so has the rest of the world. So those are excluding China and the United States. Far outpacing the United States. That's, that's a bit scary for reasons outside of the legal space. And then the last one I want to get to a couple things is AI or a ride share versus autonomous taxi provider. And this is where you've got the green versus blue. The green is rideshare and then the autonomous taxi is, is what it's against. And so the blue is autonomous taxi. It's up to you know, 27%. And what you see is an increase in the autonomous taxi usage and a massive decrease in the ride share usage. Pretty Interesting. So it looks like market share, the autonomous taxi now of the St. Louis St. San Francisco market has 27% market share. The ride share is down to 19%. That's a, that's a massive, massive decrease. Now the other, the, the last thing I want to get to is this AI and work evolution. And so the real, this is real plus rapid. And this is the US IT jobs AI versus non AI AI IT jobs is up 448%. So this is since January of 2018, the non AI IT jobs is down 9% and you saw a peak of about, I'd say probably around 20, 21 ish. And then a steady decline for both of them really. And then a massive increase for not or for AI AI IT jobs and then a steady decline for non AI IT jobs. So that's a, that is an interesting study for sure. But so that is that those are the charts I wanted to cover for out of this report. It's a really, like I said, I'll make sure it's, it's available to everybody. We'll put it in the show notes. So if you want to look at it, you can. But the reason why I wanted to go through this is because I, I want to really try to find a way to, to get you to understand how important it is that we adopt the AI now. It's really, really important. There is, it's coming fast. It is, it is getting faster. If you think of it kind of like a snowball, it's snowballing and it's getting bigger and bigger and bigger. And there will be a point where if you, if you're not on board, you're going to be, you're going to get left behind. And I don't want that to happen. And so adopt away and let me know, let me, let me know how you're doing with it. I'd love to hear some of the things that you're doing with in your firms. Shoot me a text. I'd love to hear from you. 314-501-9260 or you can always just, you know, send me a message there as maximum lawyer.com/forward/ask. You can always submit comments or questions there or if you want to come on the show and talk about some of the AI that you're doing in your firm. I'd love to hear from you. I'm sure that listeners would love to hear some of the things that you're doing because I think if we all think of this as a rising tide raises all boats that's kind of the view I've always had when it comes to practicing law and running a law firm. And so all of us getting, instead of us all getting bulldozed by AI, I think all of us working together to make sure that we can use it to the best of our abilities. That way we can all kind of work together and all rise together. That would be great. But that's all we have for you this week. Hopefully you enjoyed it. Have a good one. See ya. Have you been hurt by sloppy bookkeeping? Tired of chasing down payments from clients? Is managing your billing turning into a full time job? Our trusted partners at Collect are ready to simplify your invoicing, accounting, client management and collections. All at an affordable flat rate with no surprise, hourly charges. Don't let financial headaches hold you back. Contact Collect. 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