[unusualmonkey]

Sorry that's no realistic. People start businesses, including law firms, all the time with little to no capital.

Assuming token costs will be prohibitive assumes:

A) tokens will be really expensive and B) you need to fund tokens before you have revenue.

Your asserting AI makes the economy more capital intensive, when I think you'll see in practice it's the opposite.

[well_ackshually]

In the same way that you cannot compete against Ford at making cars without capital because Ford used their capital to automate manual labor at prices and speeds you'll never be able to reach.

"Intellectual" jobs, that require thought were yet spared, as the only way to use capital for that was just to pay for more meat: see Accenture, CapGemini, IBM, etc. You could carve yourself a spot for some people because it was hard for this capital to reach them. Now that AI, a literal machine that automates thought, is here, the costs for reaching bumfuck nowhere to take the clients away from you has dropped drastically for them, but not for you. They get economies of scale, already established patterns, tools, internal databases. You're starting with hopes, dreams and a $20 Claude sub that runs out at 10AM.

There is not infinite need for lawyers, there being more lawyers does not create more legal opportunities and cases past a certain point, and you're then dependent on other things like there being enough judges.

Robots transformed capital into manual actions and killed most manufacturing jobs save for precious few experts or things that are too expensive to automate still. AI will transform that capital into intellectual labor and crush you, take all opportunities away from you.

[nradov]

Actually there is effectively infinite demand for legal services, in the same way that there is effectively infinite demand for software. In highly regulated industries like healthcare we're constantly backlogged on legal capacity. It's not just "cases" but contract review, sales negotiations, customer documentation, regulatory affairs, civil enforcement activities, etc. Current LLMs are helpful for basic tasks like preliminary legal research and drafting documents but they still make frequent errors and can't carry out complex workflows lasting months that depend on high-context human relationships. Better automation would be a huge unlock to accelerate these business activities.

[ilkan]

I will disagree with that from experience. I'm from a small (under a million) country with a surplus of lawyers... it's corrupted them in the sense that there's not enough work around to make money from being efficient, so they legendarily drag out the cases they can, and there's near-monthly trials of cases of theft from trust accounts. So, no "actually".

[isabelc]

>"they legendarily drag out the cases they can, and there's near-monthly trials of cases of theft from trust accounts."

This goes on in the U.S. too, at least in my state.

[nradov]

Again the business demand for legal services has little to do with "cases" as such. Your experience is irrelevant and you're probably ignorant about how business and the legal/regulatory system works in the USA. The vast majority of work done by corporate counsel never has anything to do with trials. The real world isn't like what you see in TV legal dramas.

[RandomLensman]

The price for legal work going down might very well create more demand, including for people operating "law machines". Not sure we know where future equilibria lie.

[intended]

One recent comment from my interviews was that people who use AI are using it for tasks in domains they didnt deal with before. So this would be creating dashboards or writing sql queries. Or reading and reviewing contracts.

The “easy stuff” for someone’s job, is now the AI stuff for someone else’s job. Where you would hire an intern, the potential client is using Claude instead.

The issue is that this breaks the talent / growth pipeline. You can’t have experts if they don’t go through the process of getting trained and working on incrementally harder problems.

[projectazorian]

> The “easy stuff” for someone’s job, is now the AI stuff for someone else’s job. Where you would hire an intern, the potential client is using Claude instead.

And what happens when the SQL query has some subtle error or is missing data?

With interns, there’s an implicit understanding that you will spend a bit of extra time reviewing their work and mentoring them. With “just AI it bruh,” there is not.

[well_ackshually]

Demand for law related things isn't elastic. In fact, in an increasingly unemployed, AI first future, work law is a dead end, contract law is a dead end, and there will not be "AI law" jobs created.

"Price go down means more demand" applied blindly is a an economic theory so absurdly shit that even the most apeshit libertarians like Ayn Rand know it isn't true. Don't make me defend Ayn Rand.

[patentatt]

Labor law will be hit more by widespread use of robotics, but I can envision a much larger market for contract disputes and transactional law. Having AI in both sides doesn’t mean people won’t disagree about stuff.

[mr_toad]

> Demand for law related things isn't elastic.

Of course it is. When someone is thinking of suing someone else the first thing that gives them pause is the potential legal costs.

[well_ackshually]

Which hasn't changed, because the company you would have sued that was spending 200k on a lawyer is now spending 500k worth of tokens to spend the next consecutive 300 hours without sleep to find out that you took an unauthorised 5.1 minute shit on April 23 at 3PM by reviewing every single hour of camera footage and establishing a physical movement map of MAC addresses based on proximity to the WiFi relays they put every 10 meters.

You. Cannot. Win. Against. Capital.

And then you're going to sue, and realize that the system is so massively overloaded that the next available judge and jury are in 32 years. Also they're lobbying to replace those with AI judges where they entirely removed the concept of nuance.

[ethbr1]

If AI eats law, then AI must also eat judgement (either judge or jury) for the bulk of cases.

Could see the future being AI arguments -> AI judgement -> appeal to human judge/jury

With the appeal to humans being expensive (human lawyers required?) or volume-barred in some manner.

[RandomLensman]

What is an "AI first future"? Infinitely capable robots and AI? All current laws and regulations suddenly gone or changed?

Why would there be less demand for contract law or for privacy related law, for example? There is certainly some elasticity in law related things from my own experience.

Where have I applied elasticity blindly?

[raincole]

> People start businesses, including law firms, all the time with little to no capital.

Those people are usually very talented and work 16/7. And they need to convince other similar people to work for them, usually at a lower-than-market rate.

The premise here is "talented humans working hard" will stop being a valuable thing due to AI.

[suncemoje]

Do you think that will happen? That’s what most of the entrepreneurship I see looks like

[carlosjobim]

Law firms are not factories or retail shops. Most of them are just one guy, or a partnership.

They're similar to IT, in that you can be successful as a one-man business.

[ozim]

People start businesses all the time yes.

But like 80% shuts down before reaching 2 years as they run out of money.

[maigret]

If the rate of failure is slightly consistent then more layoffs will lead to more startups, so more will get on top. Many companies business are easier to attack than it looks. Look early 2000, early 2010 have both brought their set of amazing startups. 5 years ago people were most motivated to switch companies for more money.

[palmotea]

> Sorry that's no realistic. People start businesses, including law firms, all the time with little to no capital.

You're clinging past: what you is true when human capital counts for something, but what happens when it doesn't? Where the party who can spend the most tokens on the case wins (or has a much greater chance of success)?

Law might not be the best example of that, but (under current trends) a lot of areas will be.

> Your asserting AI makes the economy more capital intensive, when I think you'll see in practice it's the opposite.

You're claiming AI will make the economy more labor intensive? Huh?

[largbae]

Sounds like Jevons Paradox to me: Amount of output per worker-hour increases(cost drops edit sorry), paradoxically worker-hours _increase_.

Mechanism? New Use Cases become viable.

Just like LED lights and Virtual Machines made light-per-watt and workloads-per-server more efficient, what did we do with that efficiency? We didn't pocket the cash, we turned every billboard and many buildings into JumboTrons, and we made millions of new cheap cloud VMs to run hundreds of thousands of new little businesses that never would have happened.

Look at coding now: People are finishing side projects that they never would have, closing out old bugs or test coverage they never would have, starting side businesses they never would have before.

This is new demand being created before our eyes as the cost of knowledge work drops.

[stolsvik]

You can not have done any calculus on cloud costs? Capex -> opex is the only thing they fix. But the costs are way higher.

[qsera]

> what happens when it doesn't?

It will never happen. Capitalism works when consumers can choose the best service provider. When there is only one universal service provide (AI), behind various "fronts", it would be catastrophic.

And all the consumers lose catastrophically.

So there should be at least some human component to differentiate between the various "AI" providers.

[_DeadFred_]

But if the AIs learn from the business (at some point they need to) then the differentiator get's absorbed back. If you figure out how to optimize your AI/humanoid robot, that benefit you have only lasts until the next AI model that incorporates your successes.

[qsera]

But LLMs does not learn/train like that. They need the same thing repeated a gazillion times in the their training data to actually use it in inference.

So unless this human element get absorbed widely into literature, then I think the scenario you present is not possible, at least in the context of current LLMs.

May be there will be true AI in future, that can read a fact and grasp it brilliance, like a human do, and use it in answering future questions. Then what you said could be possible.

[_DeadFred_]

I'm assuming for it to work at the level of filling rolls in businesses like this they will need to generate synthetic data to train on from onsite data, which will be the best practices of you and your competitors and hence include the corpus of what makes you better/lean compared to your competitor and remove differentiators.

[gbear605]

That’s a should, what makes it a will? Capitalism can just be killed by AI.

[xphos]

I think all your points are correct except the AI making the economy less capital intensive. Its a new type of input that is suppose to make you vastly more performant not having it by definition puts you at a disadvantage. I.e you need that capital.

I don't necessarily agree with that AI is going to be as super productive as people think but if your assumption it is. It is another tool you'll need to be competitive. That last point just doesn't follow if you believe in AI being powerful