Soon after ChatGPT was released, I predicted with customary confidence that existing legal publishers like Thompson Reuters would dominate the AI-for-lawyers marketplace because of the content they’ve accumulated over a zillion years.
As if to spite me, the legal publishers sat on their hands and watched brute-strength tools like ChatGPT and Claude pass them by.
They aren’t sitting on their hands any longer. Yesterday I watched a demonstration of the latest version of Westlaw’s AI tool, called Co-Counsel. It’s far better than it was the last time I looked, more features, more polished, more useful. Thompson Reuters isn’t a weather man but knows which way the wind is blowing.
And yet. . . .
During the demonstration, I asked Co-Counsel this question:
My client will form a fund (a limited liability company) and raise $3M of capital from accredited investors to trade in the prediction markets. Which laws apply? What registrations are required, if any?
Co-Counsel gave two answers, one from Westlaw and the other from Practical Law.
The answers aren’t terrible, but they aren’t great. The point of the question is about regulation of the futures markets under the Commodity Exchange Act. Both answers mention the Commodity Exchange Act but focus mostly on securities laws.
They also say the fund will be subject to the Investment Company Act. Because trades in the predictions markets are “futures” rather than “securities,” the Investment Company Act doesn’t apply.
Still, the answers at least pointed me in the right direction. That’s a big improvement over previous versions.
When the demonstration ended, I asked Claude the same question. Here’s the answer.
You’ll see that Claude’s answer is much better. More on point, more detailed, better organized. Claude’s answer isn’t perfect. Among other things, Claude makes the same mistake about the Investment Company Act that Co-Counsel makes. Still, if you’re a partner in a law firm and ask two associates for a memo, you will like the memo from the Claude associate a lot more.
I don’t pretend to understand how AI tools do what they do. I don’t understand why Thompson Reuters and others legal publishers haven’t been able to leverage their content more effectively. I do know that LLMs hallucinate and will always hallucinate, meaning that a lawyer will always have to check their answers. Maybe this built-in flaw will eventually work in favor of the legal publishers. As of now, they’re still far behind.
Questions? Let me know.
Markley S. Roderick
Lex Nova Law
10 East Stow Road, Suite 250, Marlton, NJ 08053
P: 856.382.8402 | E: mroderick@lexnovalaw.com