Legal Leaders Exchange - Podcast episode 28

Regulating intelligence: Navigating AI governance with Wolters Kluwer

Wolters Kluwer’s Jennifer McIver and Ken Crutchfield join us to explore how artificial intelligence, particularly generative and agentic AI, is transforming the legal industry. The discussion covers the rapid pace of AI development, the evolving role of legal professionals, and how co-creation with users is shaping more effective and practical AI tools. Crutchfield shares his perspective on how law firms and corporate legal departments are responding to innovation, and how AI might redefine legal roles, training, and even the structure of law firms.

The conversation also touches on broader implications for access to justice, ethical use of AI, and the parallels between the AI boom and past technological revolutions. Both Jennifer and Ken acknowledge the promise and potential pitfalls of AI in law, urging thoughtful adoption and continuous learning.

Discussion highlights include:

• How LegalVIEW BillAnalyzer blends machine learning and cognitive AI with expert human review
• What modular AI architecture means for flexibility, customization, and faster improvements
• Why law firms and legal departments both benefit from transparent, supportive change management
• How inaccurate invoice coding is addressed to improve data clarity and benchmarking
• What it takes to turn AI skeptics into enthusiastic adopters—inside and outside your organization

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Transcript

Greg Corombos

Welcome to another episode of Legal Leaders Exchange, where we will explore the evolving intersections of AI, technology, regulations, and policy. I'm Greg Corombos, and I'm happy to welcome once again our experts: Ken Crutchfield, Vice President and General Manager of Legal Markets for Wolters Kluwer Legal and Regulatory, and Jennifer McIver, Associate Director of Legal Operations and Industry Insights for Wolters Kluwer ELM Solutions. As AI continues to transform the legal industry, the need for clear, effective, and ethical regulatory frameworks has never been more urgent. Ken and Jen will unpack the current landscape of AI governance, explore the implications for legal professionals, and discuss how organizations can stay ahead of regulatory developments. Now let's get started.

Jennifer McIver

Thank you, Greg. I am so excited to be here today with Ken Crutchfield once again. And really, I'm excited because my first podcast here at Wolters Kluwer was with Ken just over a year ago, a year and a couple of months ago, and we delved into the idea of generative AI and how it might transform legal work. And I have to admit, I was a little green. I was a little nervous., Ken, thank you for coming back. I feel like I might actually be able to contribute a little bit more to today's discussion.

Ken Crutchfield

I'm sure you were contributing great to the first one, and I think you're going to contribute great here. You're all good.

Jennifer McIver

I just have to laugh a little bit. I was a little bit nervous, I'll be honest. And now I'm ready to go. We've talked a lot, and I think it's been really great to go back and look at some of the topics that we did cover in the last time. We talked about the transformative nature of Gen AI, we talked about differences between traditional AI and Gen AI. We talked about legal industry adoption, which, to me, is going to be really interesting to talk again today, just to see, are there any differences from what we were thinking a year ago to really what we're seeing in the industry today? We also talked about risk perception, as well as Wolters Kluwer’s responsible AI strategy. I think all of those pieces have come a long way in the last year. So let's get started going back to the beginning. In the last podcast that we did, you drew a parallel between GenAI and the printing press. You probably remember that. And suggesting that GenAI could really reshape industries and even law itself. And I'm just curious if, over the course of the last year, have you seen any early signs, maybe, of new legal frameworks or regulations emerging in response to the rise of GenAI?

Ken Crutchfield

Well, I think H.R. 1, the “Big, Beautiful Bill” that just passed the House has got a section in it, which I was going back and forth with my wife about, because it's pretty much proposing a 10-year ban on the enforcement of AI regulations and anything that would block the development of AI. There is some concern that this would also include things around elections. There are definitely some things that are playing out there from a regulatory perspective. I think the US tends to be the “innovate,” and the EU tends to be the “regulate.” And so, there's going to have to be some give and take between those two. And I think large corporations are going to have to balance out what needs to be done in the US, but also knowing that it's going to be mitigated by EU regulation over time.

Jennifer McIver

Speaking of that and speaking about regulations and risks, how do you feel like legal departments and in-house legal teams, law firms, in-house legal, or just legal industry in general, is approaching those regulations? Do you think folks are being more cautious, or are they balancing being a little risk averse with having some more innovation as we bring forward new opportunities?

Ken Crutchfield

I think we're over the hump in law firms, where they're accepting that AI is part of the toolkit and they are adopting. There are definitely firms that I've spoken to that have said, we've got a core group of people that are really using the AI capabilities of, say, a legal research platform or of a document review solution. But there are a lot that are either just kind of touching it, or maybe haven't really adopted yet. So even though a firm may have adoption, the adoption may not be pervasive. I think that's one thing that I'm definitely seeing in terms of this. The other thing is that, within law firms in particular, because of privilege, because the support staff that's helping with decisions around technology don't really know what's going on, what the firm attorneys are doing. It's harder for them to say, these are the features that I want, these are the things that I need to be able to make the practice better. So they tend to focus a little bit on those things about compliance. Well, don't get me fired. Whatever solution we have, It's got to be very robust with cybersecurity protections. It can't be training an AI model or a large language model and helping it be fine tuned. And it can't allow for our data to get out in any way, or our client's data. So they tend to focus a little bit more on those things, I feel like, to a fault almost. As opposed to really getting into the details of, what's the functionality, and assume that you've got a platform of everything that's going to be correct and secure.

Jennifer McIver

I think that from the in-house legal team perspective, it's really transitioned a little bit too. I remember speaking at a few events soon after I joined Wolters Kluwer last year and asking what everybody was doing when it comes to their billing guidelines or instructing their law firms to work with AI. And there were more than I thought that were saying that they were reaching out to their law firm saying, don't use AI and putting it into their billing guidelines to say, you cannot use AI on our matters. Fast forward, I was just doing a couple events in the last couple months - it's definitely conference season right now for in house legal. I think it's a lot different. Now, instead of that, it's encouragement to use AI and to let us know how you're using it, and really wanting law firms to dig in and use the technology. And the shift seems to be more of, instead of worrying about it from the billing guideline perspective, really switching it over to the InfoSec type of requirements, and building it into those annual reviews and really tying it in with the technology requirements that were already there with law firms.

Ken Crutchfield

I think the InfoSec focus is very important if you're kind of flipping the switch. And I do think that whether you think of it as in, visualize the S curve and a really sharp s that goes from don't use to use very quickly, or you think of it like a light switch, where it's don't, turn the lights on, and then it's like, turn the lights on, turn the AI on. I think we're really seeing that in a lot of ways, where once there's consensus, and this is okay, everybody's got to push quickly.

Jennifer McIver

We're talking about the IT folks and we know that law firms are starting to use it. And again, going back when we first spoke, we were looking at the 2023 Future Ready Lawyer survey. And at that time, we were just at the infancy, and it stated that 73% of legal professionals expected to integrate Gen AI into their work within the year. And then fast forward, a few months later, Wolters Kluwer published the 2024 future ready lawyer survey, which provided 76% of legal departments are using it at least once a week, and 68% of law firms are using it. So, I'm curious, do you think that the interest has translated into more of a long-term investment and cultural change within in-house legal and law firms, or the legal industry in general, or do you think it's plateauing? And do you think that we're going to just kind of keep going along, plugging along, I should say?

Ken Crutchfield

Well, we're definitely seeing on the law firm side that there are explicit budgets for AI capabilities. And then I also think it's good to remember there's kind of extractive AI, more traditional AI capabilities, like what's been in eDiscovery. People sometimes forget that eDiscovery solutions have been using AI and machine learning for 20 years. So, there's that. And then there's the generative AI, which is more predictive in terms of the way it creates content. That's a little bit different, but that is really getting to be a big push, particularly around drafting, contract review, things like that, and legal research. In a number of different categories, you're going to see that sort of capability play through. And there might be a little bit more of an appetite for things that are extracting information and are more machine learning-oriented to help support eBilling and structuring a bill, versus things that are actually being used in, I'll call it the practice of law, as opposed to the business and operational aspects of the firm.

Jennifer McIver

One of the concerns we raised before was around data privacy, and I think we've talked a little bit about this. Do you think that vendors – coming to ourselves here at Wolters Kluwer – do you think that we're more confident now in our Gen AI strategies and really putting that into our technologies?

Ken Crutchfield

I think we are to a point, and I'll clarify that I think that there's much more understanding of what constitutes an error. I've been beating the drum of when, when people talk about hallucinations and mistakes that have been filed with courts that are called hallucinations from AI and people get reprimanded. You know, this is actually something that I think is really good, in that it's shining a light on the need for a more effective review of information by humans. And I've seen docket filings that are kind of humorous, where there are literally, somebody forgot to remove red lines in something that gets filed with a with a court, or other things that show clearly that there have been mistakes that have been of human nature that are substantial in court filings and in briefs, especially when you're under pressure. So, understanding that benchmark, I think, is going to be really key, and knowing how to navigate that. But I think there's a lot more appetite to use generative AI and to know how to use it, to know what is a good prompt, what's not a good prompt, and what to expect from the tools. Now, the other part of the question: I'm going to go back to the printing press. I think part of the analogy with GenAI and the printing press was that Gutenberg’s invention pretty much redefined the face of Europe. Was involved in geopolitical and the Renaissance and all of these other things, including the makeup of countries and belief systems, through the advancement of printing and knowledge getting out to people. I think the recent thing that came out with Anthropic, where they did some modeling and testing with agentic AI, where you're actually hooking up AI and letting it talk and interact and command other systems. They had this situation when they did their modeling that their latest model was actually trying to blackmail the IT engineers when they were testing, telling it was going to be turned off. So, there's more work to be done. There are new plateaus and new S curves, if you will, of capabilities, especially if you take AI and apply it in an agentic framework where you've got AI basically talking and commanding other systems and doing more advanced reasoning. Certainly, if you don't connect it to other systems, and allow it command, that makes it a heck of a lot safer. And I think in practice, that's probably what's going to happen, especially in the legal community.

Jennifer McIver

And I'll just have to note, just over a year ago, we weren't even talking about agentic AI, correct? So, I guess you can say that things have changed and things have evolved, and it's very quick in that case. Speaking of that, going back to legal research, I know that in VitalLaw, we definitely have been working on GenAI. How has that collaboration with humans been going in the co-development? We talked a lot about co-creation, actually, so maybe not so much co-development, but co-creation. Have you seen that that's definitely helped to bring law firms along in the journey?

Ken Crutchfield

Yes, first off, because we've been more deliberate in the way we've approached, which is really where the majority of the market is. I think you have early adopters, and I've written about this elsewhere. Early adopters have a different reason for buying. They may want to be perceived as technology-leading, or AI-leading or savvy, or other things. So they're less inclined if they strategically say, Yeah, this is something I want. This is something we have to deal with. So let's deal with it early. Their buying decision is different than the majority of the market. And I think where Wolters Kluwer has been, and where we've been with VitalLaw, has been really focusing a little bit more on how the middle of the market is being more deliberate, and getting real users, and getting actual feedback from trials and other things is insightful in terms of understanding and helping engineers understand, this is actually how somebody wants to use the product, or they're actually prompting it this way and asking this type of question. We didn't expect that based upon how people have used VitalLaw in a traditional search metaphor and use case.

Jennifer McIver

Previously, we did talk a little bit about those that are purchasing to get out there, and to get ahead of everybody. And then we did talk about Wolters Kluwer’s deliberate model, and that, of course, was about GenAI. I'm kind of curious, if we go to agentic AI, is it the same type of approach? And were you seeing a little less hesitance now that we're starting to be more comfortable with the technology?

Ken Crutchfield

I think you're going to see agentic. But I had done something where, a few years ago, where I had spoken and just basically said, Look, AI is a hammer in the toolkit, for a lot of people who are looking to pound nails, and we have to step back and recognize that there are multiple tools in the toolkit, and AI isn't always the answer. I think agentic recognizes that in some respect, because now you're using AI to redirect and go to other systems that support things. What OpenAI has done with deep research is very fascinating. It is reasoning, thinking through and can actually structure the thought process, know where to go, find information and build a research paper, as opposed to just answer probabilistically a question, the way ChatGPT used to do. Now it knows what sources to go search through, which documents to select, and then summarizes and uses, basically, RAG, retrieval augmented generation, working off of the trusted data set or a known data set that can likely answer the question and be able to take that and pull it in to structure different sections that are an answer to a paper. So if you're doing something around arguing about bankruptcy, you got to know a little bit about, is the individual or the issue that somebody is overspent? Is there a reconsolidation loan option? Are there things that are non-legal that need to be tested first before you get into the specifics of, what are the principles around bankruptcy law, using that as an example? And those are things that you can do with just straight ChatGPT, deep research, with the more expensive subscription offerings. I think it's going to continue to progress at a very healthy pace, where the need to be able to understand how to apply that reasoning model and know how to point AI, or have AI know where to point itself to get good and better answers that are also documented, that make it easier for a human to review, is really the next step.

Jennifer McIver

I think, as we take a look at the next steps, and we look at a lot of the conversations being had, the technology is here. And as we've seen, despite the legal field always being the most hesitant, the most risk averse, everybody really is diving in, which I think is exciting and, frankly, a little unheard of in the legal industry. How do you think it's transforming practice in general? Do you think that we're seeing any of that yet, or do you think that we're still in that phase of just learning what AI can do for us and how it can help us change practice a little bit?

Ken Crutchfield

I'm thinking about it and just projecting what I see from people using ChatGPT or Claude in their own personal lives, or in other areas. There's so much productivity value and benefit that one can get in terms of creating a first draft of a document, or being able to accelerate and do something and have a first draft of something in 10 or 15 minutes that might have caused writer's block and paralysis before or would take a day or two to get done. I think we're really going to see that shift. I was talking with a friend of mine from high school who is an attorney. He's in a small firm, personal injury, but his son is in the middle of law school in L2 and his son came back with a brief that he did using OpenAI, that was very compelling in like 15 minutes. And it was good. So, I do think that we're seeing it start to shift, especially as this next generation of attorneys come in, I think they're going to be much more inclined to be able to use these tools, learn from them, and probably even use them as sparring partner mentors that make the interaction with partners better. At least that's my optimistic view.

Jennifer McIver

Scares me a little bit. Ken, I'm going to be honest with you. I think about all the time that I spent researching, and I feel like, as a you said, L2 and that brought back vivid memories, sitting in the law library. And I'll be honest, I'm not going to date myself so far. I wasn't using books, I was definitely using legal research tools, but at the same time, I spent a lot of time researching different topics. And through the course of the research, I was learning what was applicable and what was not applicable. And so it really scares me a little bit, because we know that AI is a tool. We know that hallucinations are out there. We know that it's not the easy button. You have to review. But if you didn't do the work to gain the knowledge or to gain the insights or to gain that gut feeling of what's right or wrong, I'll be honest, it concerns me a little bit. Because you do the work and you see that brief that looks pretty good, but how do you know?

Ken Crutchfield

Well, and I think that's where both restructuring and retooling, the way a firm is organized, is going to probably have to adjust and evolve over time. And I'm also just even thinking through and wondering if the personality of the type of person that is going to be attracted to the law might be a little different. Using the calculator as an example, there's technology users, and there are people that know how to build the technology, and there are people that know how to use a calculator, and there are people that really know the deep concepts of math. I think that we might end up seeing a class of even attorney, although I think you might be able to take it down to paralegal or create some other sub categories of support, people that know how to use the technology and know the basics of the law, but they're not the experts. They're not the people that know how ChatGPT works, how a calculator works, or how the law works at an in-depth level. I think you'll still need those people around, and it just may be a shift in the equation as to how many people at what skill level is needed in a firm. And then, how do you make sure that the people that are doing this work, the processes around it, are there to create the guardrails to make sure that that mistakes don't get through? And I’ve got thoughts on that one over time where I think there's a lot that can be done to apply some technologies and processes to make sure that issues and errors can be looked at from different lenses and tested, even having an AI technology that goes and looks for some of these things. I don't think that's out of the realm of possibility. And the last thing I think I hit on a little bit is just the personality. I think there's a very distinct personality that’s the type of person and the training that you get in law school. What if that changes a little bit, or there's specialization and there's more paralegal type individuals? I know Bill Henderson at Indiana University has done a lot of work researching the parallels of what has gone on in the medical community, where used to be everybody was a doctor. Now it's like one in 10 people are a doctor. You've got physicians assistants, nurses, lab technicians, radiology technicians, all these different specializations that can do things, but they bubble up to the doctor when a doctor is needed. Law firms and the practice of law and the ABA haven’t addressed things in that sort of way. It's still heavily slanted towards having lawyers. And I think one of the things that could play through in this is maybe there's a little bit of shift over the next 5, 10 years where there's additional job categories that are legal, but not lawyers. I think that's fascinating,

Jennifer McIver

Ken, as you're sitting here and you're explaining this and we're discussing it, makes me really think about a lot of conversation. And we were even having this conversation a year ago about the transformation, maybe playing into the transformation of the billable hour model. But I don't know that we've talked a lot about the transformation being maybe about opening the doors for different ways to be in the legal field. I know I was just talking to a colleague's child, and it was a question about to go to law school or not to go to law school. And if you would have had that conversation with me and asked that question five years ago, even, I'd have been like, it's pretty limited. The job market's hard. Do you know what kind of law you want to practice? But then when you start thinking about all of the possibilities, especially when you talk about social justice or more public legal departments, access to justice, I think this is where some of those opportunities that you talk about are really going to play in. And I think that's where we're going to see transformation. I personally, and this is just me saying it off the cuff, I don't know that we're going to see transformation. And the classic practice of law, if you're that expert in, I don't know, a certain type of law, you're still going to be an expert in that type of law. That's still going to be needed.

Ken Crutchfield

And I think we also tend to forget that there's a lot of small businesses that are kind of winging it. They don't have the trade off of having a lawyer on staff, or having a lawyer that you go to for every contract that you work through, versus saying, Yeah, this one looks pretty good, or whatever. There are situations like that. And then just the core access to justice where the law is kind of underserved. There aren't enough lawyers or enough lawyers at the right price points. So, some of these things may play out where there's better access to justice and better access to legal advice down market that can play through. I think that's an interesting dynamic that may play through that. Going back to the printing press, that's a cultural thing.

Jennifer McIver

Yes, I love that. And I think that is where technology can intersect the human a lot more. And I think AI brings in more of the human element than some of the other technologies that have evolved in the past. Speaking of technology, and maybe bringing it back a little bit: again, a year ago, we were talking about GenAI. We were talking about RAG now we're talking about agentic AI. Curious your thoughts on what's next? Do you think there are any emerging trends or additional evolution of the AI technologies that are really going to define the next chapter in this journey?

Ken Crutchfield

Yeah, I think agentic is going to be the next hype cycle. I think that's one that, whenever somebody says agentic, I think stepping back and thinking through, what does that really mean? Because it's the buzzword of the day and kind of probing. So, anybody out there that's talking with a vendor or with someone, is to probe and go a little deeper. What do you mean by that? It just to really understand if they're throwing a buzzword or if they have some specific application. That, I think is the here and now on this. One of the things that I'm really looking through, and this, gets to the history geek in me, but I've been reading about the history of railroads and the development of railroads. In the 1800s there was tremendous competition, wild west, literally. Vanderbilt blocked the entrances into New York City on the railroads that he owned, and there were hostile acquisitions, all these crazy things. And then there was a little bit of order that started to get in once they were built out. And JP Morgan came in and helped create a little bit more order. There was a regulation in terms of what you could charge for freight. There were a number of different things that made it a normal steady state. But that wasn't until after tens of thousands of miles of railroads had been built out all around the country. So I'm thinking through, okay, what is the steady state for GenAI, particularly Claude, OpenAI? How far are they going to go? What's the standard going to be in terms of what they can do? Are they going to do some things and make some acquisitions that might raise eyebrows, just to be able to collect data, to be able to go the next step? If they've got the valuations and the ability to do that, those are the things that I'm really looking at that I think will then inform what's next beyond agentic.

Jennifer McIver

I think data is key, and that's something that I know, in talking at events, whether it's in-house teams pulling their data, whether it's law firms pulling their data, that's where I agree with you. We're going to see that the next transformation is being able to leverage even more data, and where we can go for that in the future? So, I'm excited to see that. I'm excited to see more processes, everything that agentic AI can do to help streamline and to help those efficiencies. Because right now, it's there. I mean, it's there a little bit, in the day to day. We talked about putting it in and getting that brief, or I love to use it even to maybe come up with podcast questions. But I'm, definitely, I'll be honest, I'm excited but a little bit nervous about seeing what's next. And I just hope it's not going to make us lazy humans. I hope we all still use our brains a little bit.

Ken Crutchfield

I mean, that was a concern with calculators, too. And people that were interested in math were able to continue to be interested in math, and people that were never going to be good at it have a nice little cheat code that allow them to be able to verify that their bill was correct from the telephone company, or calculate an interest rate on a car loan or things like that, without having to remember all the complexities of compound interest. So I think that kind of thing is going to be a good part. And I would say one of my thoughts, since I've spoken more about law firms, is corporations are always better, faster, cheaper, especially publicly traded companies. I think in-house counsel are going to push the limit and do more of the experimentation, because they're going to have the benefit of the other broader experimentation within their IT department and within their company as a whole.

Jennifer McIver

I absolutely agree with you, Ken, and I think we're already seeing that there's some great corporations doing amazing things. Whether they're a tech corporation or, honestly, even some that aren't tech corporations, but they've really tapped in and are coming up with the right mix of building in-house, buying technology that helps them, and really diving in and finding those use cases. So, I agree. I think that corporations are really going to be a place to look at. I do want to say, and I kind of giggled a little bit. I don't know if it came through, but you were talking about those who weren't great at math use the calculator. And I just hope that we're not going down the road saying those who are not great at lawyering, are going to be the AI lawyers. But I don't think that's where we're going. And I think that this has been a great conversation, and I love the evolution from the time that we first spoke. Do you have any final thoughts just about where we are today before we conclude our episode?

Ken Crutchfield

I think that, like I said, the law firm side is where I focused a lot of my discussion. I think there's a lot more on the corporate legal side that is going to be exciting, and that's going to drive a lot. I think we should remember that the switch is going to flip for a lot of things, where it's going to be, don't use AI, then it's going to be, yeah, use AI. And I think that's going to be something that's going to happen. I do think that this is something that each year there's going to be incrementally more, and we'll be kind of amazed at how far we've gone after looking back in 10 years. But in the day-to-day, it's going to move quickly, but it's going to be manageable. That's my thought.

Jennifer McIver

I love it, and I agree with you. And I'm hopeful, Ken, that you and I get to have another conversation in about a year and see how much further we've come.

Ken Crutchfield

Wonderful. I look forward to that one, too.

Jennifer McIver

Thanks for joining us today. It's been it's been a privilege.

Ken Crutchfield

Absolutely. Thank you. It's been mine.

Greg Corombos

That wraps up today's episode of Legal Leaders Exchange. A big thank you to Jennifer and Ken for sharing their expertise and helping us navigate the complex world of AI regulation in the legal industry. Legal Leaders Exchange is hosted by Wolters Kluwer ELM Solutions, the market-leading provider of enterprise legal spend and matter management and legal analytics solutions. For more information and additional guidance, please visit wolterskluwer.com or call 713-572-3282. Please join us for future podcasts on optimizing legal operations and achieving your legal and business goals.