EP 225 – Hamid Kohan – The Scalability of AI in Your Law Firm
The following interview has been transcribed for our readers from rev.com. Please excuse any discrepancies in the transcription.
Hamid Kohan:
Treat it as a business. Once you have treated it as a business, you need to surround yourself with people who are also business experts. You’re not all of it. You need marketing. Online presence right now is very, very important because it’s a validation for people to select who they go to and who they’re not going to.
Speaker 2:
You’re listening to the Legal Mastermind Podcast, with your hosts, Ryan Klein and Chase Williams, the go-to podcast for learning from the experts in the legal community about effective ways to grow and manage your law firm.
Eric Bersano:
Hello. Welcome to another episode of the Legal Mastermind Podcast. Today we have with us Hamid Kohan, who is the CEO of Legal Soft. Welcome to the podcast.
Hamid Kohan:
Thank you very much, Eric. Appreciate it.
Eric Bersano:
Before we jump into things, do you mind giving a brief CV of yourself so the audience can understand where you’re coming from as we dig into some of these topics we’re going to talk about?
Hamid Kohan:
Sure. Absolutely. My pleasure. I basically went to engineering school. I graduated when I was 17, and I was recruited to Silicon Valley. I spent 20-plus years in Silicon Valley, had the pleasure of working with some great folks like Eric Schmidt, the Chairman of Google and Sun Microsystems and so forth. That’s where I got my MBA. Then I got recruited to Los Angeles after that, where I was a president of a division for a publicly traded company for a few years in the streaming media. After that, I started doing some of my own ventures of creating some enterprises in the area of data management, tracking and reportings. About six, seven years ago, I had the opportunity to get into the legal side. I saw a huge opportunity as I found it, compared to Silicon Valley mentality or training, that it was way behind technology and automations and innovations and things like that.
I came with a conclusion like, “If you leave the attorneys alone, they’ll still be waiting at their fax machine with a pager waiting for the next fax to come through.” I saw that as a huge opportunity. I started doing some management consultations and so forth for a while. One thing led to another, and now we are Legal Soft. We work with 650-plus law firms. We have about 1,200 staff. A big part of that is placing trained, dedicated, full-time legal staff from eight different countries into the law firms in the US. That comes also with a lot of technologies. Scalability of a law firm is our biggest project, is the biggest focus, is how to scale a law firm to the next level.
Eric Bersano:
Yeah. Let’s jump into that because you and I are definitely on the same page. When I started working with lawyers, it was like they could be as inefficient as they want it to be because they don’t have any inventory. There’s no product on the shelves. It’s just their time that they’re selling. So if they’re inefficient with their time, they’re still making money. I think that is changing a lot, and probably a lot due to companies like yours that are bringing in technology. Scalability, I think, is something that is becoming more and more popular. Not to throw too much at you too soon, but the other side of this that I see is there’s a lot of money coming into the legal industry. You’ve got states like Arizona and Utah, and Washington, DC has always been a place where you can be a non-attorney partner. What we’re starting to see is a lot of money come into this industry. I don’t think it’s hit people yet, but I think it’s going to start hitting some of these smaller law firms who need to start taking advantages of technical support or help.
Hamid Kohan:
Yeah. I’m actually one of those firms. I am established in Arizona as a non-attorney law firm. I did that last year. It’s been interesting. It’s called the ABS program. You’re absolutely right. Those three states do that. When I was doing that process, to elaborate on your part of it, we had to go in front of the Arizona Supreme Court to be approved. There was probably, I don’t know, 12 applicants that were approved to go forward. Every one of them had a big plan that involved a lot of money. None of them wanted to practice law, basically. They wanted to practice the business of law. They were all attorneys.
I was actually the only non-attorney in the crowd. I was like, “I thought this room is for non-attorneys. What are you attorneys doing here?” They said, “Because we want to raise a great amount of money, so our partners are going to be non-attorneys. We are here getting that so we can bring billions of dollars, essentially, into this industry.” So you’re absolutely right. I’m glad that you recognize that. There is a lot of things for the law firms to watch out for. This is just one of them, the ABS programs, where Amazon can basically be a law firm, or Google can be a law firm, which is scary in many different levels. That’s one impact. The second impact is all the technology and AI and so forth, there is going to be probably a bigger impact than even the ABS program.
Eric Bersano:
Where do you see AI fitting in? I think, obviously, everybody’s talking about AI right now, but can you give me your idea of what’s going to happen now, what’s going to be in the near future, and where we’re going?
Hamid Kohan:
Absolutely. I just published a book called How to Scale Your AI Law Firm in Amazon. That describes how they’re going to impact it in the different practice types, because in law, you have transactional law, and you have litigation law. Transactional law is things like immigration, bankruptcy, estate planning, corporate formation. These are transactional. What that means is a group of people sitting, completing applications, collecting documents, submitting it somewhere. It either gets approved, or it gets bounced back, and they need to add more information and get it done. There isn’t really much lawyering done at all unless it’s litigated. 85% of them are just application submission. Well, that entire process is going to be AI. I’m actually working with an immigration firm to do 85% of this as AI.
Filing for bankruptcy, fill out bunch of information, collect bunch of applications submitted, chapter 7, 11, 13, whatever. The biggest hit going to be transactional law, which the machine’s going to replace people. The second part on litigation, the AI is going to take over intake, which is somebody asking questions. AI is fully capable of asking all the right questions and all the what ifs and collect the information. Then you’re going into litigation part, which is all discoveries. What is discovery? Collecting data. What is AI does? Has a lot of data. There’s already things like e-discoveries, but the AI is just going to take that a hundred exit in a system. So it’s going to impact variety of different practices in different areas. Medical record collection, employment record collection, analyzing them, running it against the previous information, previous cases, case laws, all of that, boom. AI, AI, AI. That’s how it changes.
Eric Bersano:
I’ve got a quick question on the intake side, which I think is a big hole in the game of a lot of law firms. Most people don’t have a dedicated person to answer the phone. That person has 18 other things that they need to do. When they answer the phone, they see it as an interruption in their day, so it might not be the most pleasant. Now, AI seems like an amazing way to deal with that, but are we talking about text? Are we talking about voice? Are we talking about the person not knowing if they’re talking to another person? Or is it obviously AI at this point? Where do you see that?
Hamid Kohan:
It’s actually video, is live avatars who are going to be talking to you, where, if you’re not focusing to details, you would think is a real person. Right now in Legal Soft, we have probably about 800 trained virtual, dedicated intake staff into the law firm, because as you mentioned, is the biggest weakness of a law firm. They’re hoping the cases are coming, but they want them to just fall in their lap, retained, ready to go. They don’t want to call the same lead 18 times. They don’t want to pick up the phone at 10:00 p.m., but they still want the case. So when we go in, the first thing we do, we place virtual intakers in there. But we know, even for our own market, somebody’s going to come and replace our virtual intakers with AI. So we’re doing it ourselves to be prepared for that segment.
But the things that we looked at, the text part was already done, is there. It works. The voice ones, it works. It has some glitches. The ones that we are working with is the actual person you see on the screen, just like me and you seeing each other on the Zoom, that you’re going to talk to me and say, “Hamid, tell me about your accident. When did it happen? How did it happen? Are you okay? Have you sought medical attention?” I’ll say, “Eric, yes, thank you. I’m fine. I went to urgent care.” “Okay. Great. Urgent care? Which urgent care did you go to?” So I’m talking to you. At any point the system recognizes that I’m disengaging and I’m not fully engaged, it can do a live call transfer to a real person.
Eric Bersano:
So it’ll pick up on someone not giving full answers or maybe starting to not focus on their screen?
Hamid Kohan:
Right. Suspicious behavior.
Eric Bersano:
This is available now, or this is next generation?
Hamid Kohan:
We are developing it right now. We’re using few different tools and technologies to be able to do it as efficient as possible so you don’t lose clients because the machine is talking to them. But look, if you have the same conversation two years from now, I’m basically telling you that today we retained 100 clients via the video AI.
Eric Bersano:
Wow. Yeah. Right now, who are the early adopters? Are these mostly the transactional firms? Are these the litigation firms? Is there a particular practice area that you see adopting it sooner?
Hamid Kohan:
Yeah. It’s a breed of attorneys who are not necessarily the old-timers, and not necessarily the people who just passed the bar. It’s the folks who went into the law to deal with the business of law, not the actual practice of law. I have two sons in law school. One of them goes to Vanderbilt, wants to go in the Supreme Court and handle a case. He would never give a damn anything about the business of law. I have another one who would never want to go to court ever, because he wants to run the business of law. So I can tell you, that guy is going to use every single technology.
He already worked with me in his gap year, and he has figured out every freaking technologies are there, and he brings it to the table. That’s the guy that is going to use AI for everything. But the other one who wants to go run heavy duty trial litigation in the Supreme Court, not going to. They’re still going to walk in there with a briefcase and a whole bunch of paper and the two tablets and do it. That’s how this separates them out between the characters. What type of lawyers are they?
Eric Bersano:
Now, I’m curious as far as a practice area that I think is the most elusive out there, which would be personal injury. What I mean by that is a personal injury can happen to anyone at any time, no matter what your age is, or where you’re at, or what your demographics are. From a marketing perspective, it’s really tough because you have nothing to focus on. Someone was in a car accident, or product liability type of a case. Is there any of the technology that you’ve been part of or working on or know about that’s helping with personal injury practice areas?
Hamid Kohan:
Majority of our focus is personal injury because that’s where the market is at. That’s where people can afford to spend money and invest and all of that. Immigration and bankruptcy is not the thing as far as where the capital is at. Personal injury, class action, mass tort, is where the money’s at. They are the early adopters. They are the investors. For example, we’re launching this new program in 30 days called FastDemands.AI. Essentially, this system will automatically get your information for your client, and it spits out a complete comprehensive demand with case analysis, medical record analysis, damages, injuries, everything, and it prints out the demand for you in 10 minutes.
Eric Bersano:
I assume these are state specific, right?
Hamid Kohan:
Yes, of course. State specific. You have accident demands versus slip and fall demands versus premise liability demands, employment demands, workers’ comp demands. It’s a whole machine that replaced one segment of all those PI and employment firm activities. That’s one thing. The second part is actually doing the AI intake for personal injury because it’s pretty specific. It’s not like employment. There is a story. It’s like, “You had an accident? Where? When? How? Are you injured? Where are you going? Here’s a retainer. Sign it so I can put you to treatment.” Boom. The next AI we’re doing for PI is medical record retrieval. You got all these people around the country calling all these physicians and chiros and labs, collecting medical records and medical bills. AI. Boom. Here’s a list of all the doctors. Here’s a list of all my clients working at these doctors. Get me everything they’ve got.
Eric Bersano:
Right. Now, one of the things as far as intake is concerned, which sounds like an amazing ability, I’ve talked to several, say, medical malpractice or even mass tort attorneys. I’ve seen the intakes for some of these mass torts. I mean, they’re pages and pages long, like, “When were you diagnosed? When were you first exposed? Between these years, what drugs were you given? What’s the doctor’s name?” You mentioned mass torts, so I assume you’re working this. Is the AI sophisticated enough to work with really complex medical malpractice or mass torts, where you’ve got drugs and medical devices involved?
Hamid Kohan:
It will do the initial screening that the junior intaker would do. See, some of these places, they first have to have a qualifier. It is like, “Did you ever take this medication or not? If this is not, let’s not waste time of an attorney or an intaker to do it. If it is, when did you take it? What was the symptoms?” As soon as you do that first screening, now you have qualified leads, not just mass leads, which frustrates a lot of people, where they’re talking to hundreds of people, and then 90 of them are not even qualified. So it does the first level of screening. Maybe it just asks five questions. After that, if the analysis of this, you are qualified, then I pass you on to somebody else who will do the extended intake.
Eric Bersano:
What do you see the general public’s reaction when they’re dealing with an AI? Is there a percentage of drop-off, or are people curious about it? What are you seeing?
Hamid Kohan:
It goes through the same way. The same phases that we’ve gone through culturally when people had to buy things online versus walking to the store. It’s like, “I really need to walk in, feel it, touch it, and so forth.” Now it is opposite. I don’t want to go nowhere. I want everything delivered to my door, right?
Eric Bersano:
Right.
Hamid Kohan:
So that was the first phase. The second phase was, “Yes, I bought all the shoes and the clothes and everything online, but I’m not buying my food online. My food need to go to a grocery store, or food delivered or this and that.” The industry just keeps shifting like that. That was the online experience. The second thing came when we have everybody who picks up a phone has an accent, and the first phase was, “Can I talk to your supervisor? Are you leaving the US?” They start filtering. Now, if you actually pick up a phone and somebody doesn’t have an accent, you think you dialed the wrong number. You’re like, “Can I talk to somebody with an accent because those are the guys who actually take care of my problem?”
Eric Bersano:
Right.
Hamid Kohan:
Right. I think it’s a transition phase that is happening. The first AI, a bunch of people are going to say, “I’m not talking to no machine. Where is my real person? I’m hiring attorney. I want to talk to a real attorney.” But, after a while, if the attorney ever picks up, they’re like, “Man, this might not be good because he’s not busy. He actually picked up the phone and talked to me. What’s wrong with him?”
Eric Bersano:
Right. I see that. I think you already addressed it. If someone’s starting to not pay attention or they’re not giving full answers, then you give the option to talk to a live person. Just like my grandparents didn’t use credit cards, they paid for everything in cash, now we’ve moved all the way ahead, as you mentioned, that you can buy your groceries online. People will get used to the information quicker and quicker. I think with social media and just the environment we live in now, people are a little bit more receptive to new technology, although it might take a little bit for everybody to adopt it.
Hamid Kohan:
Right. There is a market adaptability cycle that we all need to go through whenever something disrupts the market. This is the biggest disruption I think we are going to get, at least in my lifetime. That is, when people all adopt and you don’t know who’s real, who’s a machine, who’s a half-and-half. It’s going to be a bit for it to adjust.
Eric Bersano:
Right. Now, I’m curious. Because of your experience in Silicon Valley and the tech experience you have, overlay that with the legal experience. I talked to a lot of lawyers who are in that ready-to-explode range, meaning to grow. They’re eight to 10 years out of law school. They work maybe for a big firm. Now they’re on their own, and they’re really wanting to grow. It’s maybe two to three to four partners. As far as scaling a law firm, what would be your best advice to someone who’s got some resources, but not a ton, meaning they can’t just throw money around on anything? Maybe specifically let’s talk about personal injury law firms because I feel like that’s going to be the toughest place for people to make it if they haven’t already established themselves. What advice would you give to them?
Hamid Kohan:
Treat it as a business. Once you have treated as a business, you need to surround yourself with people who are also business experts. You’re not all of it. You need marketing. Online presence right now is very, very important because it is a validation for people to select who they go to and who they’re not going to. So having a great online presence. Have an answer about what is my cost of client acquisition? Let’s say in California, cost of client acquisition for personal injury is about $2,800 per case. So if you’re knowing that, you won’t say, “Well, I have $5,000 to spend, and I want to scale my firm.” Well, I’m sorry. You get a one and a half cases for that. That’s not going to work. Find something else to do. But you say, “Look, in Arizona, the same case with better results is $1,300, so half the price.” So I buy the same case in Arizona for half the price and have a chance of settling it for twice as much because the minimum policies are higher.
You have to treat it like a business. Where can I buy this stuff cheaper, and where can I sell it for the most? Then the licensing issue becomes, “Well, I don’t practice in Arizona, so what do I do?” Well, you refer it out to an Arizona firm. You get 40% of the net attorney’s fees, which is more than you would make practicing yourself. The average PI firm makes about 27% net profit. I refer it out. I get 40 without working on it. So why the heck do I want to handle the case, the problem client, the problem case, all of that, when somebody else is willing to do it? You have to treat it like a business. You have to have people around you that they know what they’re doing on the business side, lead generation, marketing, client retention, billing, a referral network. We have a complete setup procedure in our company that takes a firm from one level to another year after year, two, three Xing every year. We have done this over and over before.
Eric Bersano:
What are you seeing as the medium? There’s obviously search engine marketing. The internet is used for everything. But you’ve also got some of the bigger firms that are advertising on TV. Then social media, I think, is starting to generate some things, especially if you go into something targeted like mass tort. I think social media is a really good medium. I don’t know if it’s great for personal injury yet. But are you seeing anything new? Are you seeing a shift in where people are getting clients from a technology standpoint? Or is it still the same blocking and tackling people have been doing for 10 to 15 years?
Hamid Kohan:
No. I think there’s definitely a new wave because the new generation. So the things about radio, TV, billboards and stuff is going to go out because who’s watching TV anymore with a bunch of advertising in between one single show? If I pause a show for one time in my house, I’m going to get boosted out. It’s like, “What the hell are you’re doing?” Imagine commercials coming in. We watch a lot of TV in my house. I don’t remember the last time we watched the real TV. It was all the Amazon Prime and Netflix and YouTube and all of that. So that generation moving out. Radio, same thing. Everything going to be social media based in my mind, and very targeted advertising, very targeted messaging, almost like laser focus. In one of my ventures with the partner that I have, just in a smallest scale, we generate over 1,000 cases a month, 100% on social media.
Eric Bersano:
These are personal injury cases?
Hamid Kohan:
Personal injury, consumer protection, and employment.
Eric Bersano:
Is that mostly branded, or is it targeted, TikTok style, where you’ve got influencers, or is it the law firm? How are you generating these-
Hamid Kohan:
No, just having video ads and very simple interactive graphic ads in Instagram, YouTube, TikTok, all of it. Facebook.
Eric Bersano:
I’ve been part of a couple of focus groups recently. The younger generation, which to me now is their thirties, they’ll bring up social media. One of the things we hear, which I don’t think is a surprise, is they want to go look at reviews, whether those are Google or Yelp reviews. But they’ll more times than not say, “Then I would go check out their Facebook or Instagram, or I’d see if they have YouTube videos,” which isn’t something that I would think about doing if I was doing research, but if you want to capture that newer growing audience, you’ve got to have that in your game plan.
Hamid Kohan:
Oh, absolutely. I always make a joke with my family. I have three boys at home. You want to go have $100 family dinner, they want to check the restaurant’s review, Instagram, Facebook. I’m like, “We’re just going to go have dinner. I’m not buying a house. I’m not investing a million dollars here.” “Well, Dad, this is what we do.” So if they do that for a dinner, imagine what they do with an employment case or a personal injury case or whatever. They’re going to check out this person’s entire social media presence.
Eric Bersano:
Yeah. Yeah. I think that’s true. That’s another thing that is proven through the data. Most searches are done on mobile. I think the number is somewhere around 85%.
Hamid Kohan:
Yes.
Eric Bersano:
But when it comes to legal, it’s a little bit lower. It’s still in the seventies, but I think when someone has a real serious issue, they’re going to sit down at their desk. They’re going to do a bunch of different research, look at a bunch of different websites. That just goes to your point that it is such an important decision because your loved one’s health or the compensation they receive is going to be dependent on who that person is. If they go to Instagram or Facebook and you are not there, or you don’t have a professional or robust presence, they just might not call you.
Hamid Kohan:
Right. I think if you look at the numbers, between social media and Google, it’s probably like 90% of the searches. We really don’t have many other places to go other than those two. I don’t know where else to go find any information, honestly. I’m not the youngest crowd here, but I either go to Google, and if it fails, I go to social media, and it fails, I stop.
Eric Bersano:
Right. Right. It must not exist.
Hamid Kohan:
Yeah, exactly.
Eric Bersano:
Well, Hamid, this has been really enlightening for me. I think the marriage of your Silicon Valley experience with your legal experience is really going to be eyeopening for a lot of people listening to this. You mentioned a book that you’ve written. Is there any more resources that you could point people towards if they want to find out?
Hamid Kohan:
Sure. There’s actually two books out there. One’s called How to Scale Your Stupid Law Firm. That’s the first one I put out because a lot of stuff about the law firms were stupid. Then, on the second one, it says How to Scale Your AI Law Firm, which I changed the stupid to AI because it went from stupid to really, really smart. That is not the human being. It’s a machine. So those two. Then legalsoft.com is a site to go to for looking for anything, everything that we do and provide. My contacts is there. My bio is there. Be happy to contact with anybody that I can help. I do this out of passion. I just love it. It’s very exciting. I work 80 hours a week by choice.
Eric Bersano:
Yeah. I’ll attest, since this is audio only, Hamid has had a smile on his face the entire time. So I can tell he really likes talking about this stuff and would be excited to share more.
Speaker 2:
Thanks for listening to the Legal Mastermind Podcast. If you’re interested in working with Ryan and Chase, please email mastermind@marketmindmarket.com. Make sure to join the free Mastermind Group for growing and managing your firm at lawfirmmastermind.com. Ryan Klein and Chase Williams are the managing partners at Market By Market, one of the top legal marketing companies in the United States.
