How AI Is Changing Arbitration and Legal Work (Full Transcript)

[00:00:00] Speaker 1: Hi, I'm Bernadette. And I'm Zach, and welcome to The Lawyer's Podcast, one of the ways that we help lawyers build healthier firms, better businesses, and more sustainable lives. Today, I talk with Bridget McCormick about how AI and innovation are transforming the future of legal work. That's not a big topic at all. But Bridget McCormick is currently the CEO of AAA, the American Arbitration Association, and she was previously the Chief Justice at the Michigan Supreme Court. So she has a lot of interesting stuff to say about use of AI and technology, really, in the law practice. But Bernadette, speaking of use of technology in your law practice, I think a lot of people, I was looking at something that Stephanie posted on LinkedIn the other day, and it was about looking at and going through your own intake. And it got me thinking about how we implement systems in our practices sometimes, and we don't ever iterate over those, or even try them out or test them out a lot of times.

[00:01:13] Speaker 2: Yeah, and you have to do that. You need to do it, or someone that you trust needs to go through the process. I think it works better if you do it, because then you have an idea of what your client is essentially going through when they're doing your process. So I think sometimes when you create a system on the back end, you don't realize maybe it's clunky, or maybe it's asking too many questions, and it's frustrating. So I think that's a really good idea.

[00:01:45] Speaker 1: Yeah, and going through it systematically, periodically going through those things, because I know for me, when I create systems, a lot of times I'm frustrated when I've finalized it the first time, and I step away, and it's not perfect. It's working. It exists, but it's not perfect. And so I've gone back into systems that I created six months ago and been like, oh my God, I totally forgot to do that thing.

[00:02:13] Speaker 2: Yeah, yeah, and I think also, like I said, if you don't step away and then step into another role, because when you are creating it, you're in a whole different space. But when you step away and then you come back as a client or a user, you have a different frame of mind. And I think that that's really important to do, because then you get a different perspective.

[00:02:44] Speaker 1: Yeah, I think that's a very good point, just stepping away, letting your brain clear, and then coming back into it. So I'd like to hear what people, I'd like to challenge the listeners of the show right now to kind of go find something like your intake. I know not everybody has something exactly like that. Find something like your intake, go through it from the user perspective, whether it's your internal user or external user. Go through it from the user perspective and audit it. See what happens, and honestly, put some learnings in the comments here.

[00:03:17] Speaker 2: I'd love to hear about it.

[00:03:17] Speaker 1: Yeah. Well, now, here is my conversation with Bridget McCormick. Hi, I'm Bridget McCormick and I am the CEO and president

[00:03:38] Speaker 3: at the American Arbitration Association, also known as the AAA. And I've been doing that for three years. And before that, I was the Chief Justice of the Michigan Supreme Court.

[00:03:47] Speaker 1: Bridget, thank you for being with me. I really appreciate your time talking with us. We've got a couple of entry points talking with you that would be interesting to all the lawyerist listeners. So I really appreciate you being here.

[00:04:00] Speaker 3: Thank you. Yeah, I'm excited to have the conversation.

[00:04:02] Speaker 1: So the first place that I had run into you online and through LinkedIn and all those things and come across your profile and the work that you were doing is, when you were at the Michigan Supreme Court during the COVID times, the before times, and you were actually, you were leading the Supreme Court at that time during COVID, right?

[00:04:25] Speaker 3: Yeah, that's right. I was the Chief Justice at the time of the shutdown and throughout the rest of the pandemic, yeah.

[00:04:32] Speaker 1: I think one of the things that always struck me is how prospective, how thoughtful and kind of action-oriented you guys were at the Michigan Supreme Court. I always appreciated that. How did that, talk to me a little bit about that experience in leading the court through unprecedented times.

[00:04:52] Speaker 3: Yeah, I mean, sometimes it takes unprecedented times to do big things and do them fast. And I do think the pandemic gave us that in courts in a way that we learned a lot from and those are lessons that now courts have forever, so they're quite valuable. At the Michigan Supreme Court, I was pretty lucky. We actually had secured Zoom licenses for all of the judges in the state in December of 2019, which might make it sound like I'm prescient,

[00:05:24] Speaker 1: but I was not.

[00:05:29] Speaker 3: It just seemed to us that in a state as geographically vast as Michigan, it might make sense to figure out how to give lawyers and their clients other ways to access courts. And online appearances made sense for all kinds of hearings. Of course, not for all hearings, but for many hearings. I will tell you that those Zoom licenses between December 2019 and March of 2020, I don't think were used a whole lot by a whole lot of judges. But then in March of 2020, when the governor shut the state down, we were in a really lucky position because we were able to quickly stand up online courts. And I think we were the first state to be able to do that statewide. And that gave us real runway to do some other big things, which we did.

[00:06:20] Speaker 1: Talk to me about the difficulty of that, because yes, you had the Zoom licenses there, but nobody was using them. Nobody wanted to use them. And there were questions of security in Zoom and attorney-client privilege and all these things that we didn't necessarily think that we were going to be able to figure out right then. Talk to me a little bit about that difficulty or that kind of pain point.

[00:06:42] Speaker 3: Yeah, we've quickly stood up a really interesting cross-functional group. We had representatives from the bar, but we also had, and obviously representatives from all of the different benches, the circuit court bench, the probate bench, and the district court bench, and the appellate courts. The appellate courts, in a way, had the easiest time because what we do kind of already is a bit of a seminar. There's not like, everything's predictable. It's a lot more controllable. There's no testimony. So appellate arguments were a pretty easy transition to make, but trial courts were hard. In addition to all the questions you raised, there's county clerks who are separately elected, but they keep the records. So you kind of need their cooperation as well. And we also needed, in some cases, the support, if not additional resources, from the funding units, and courts are funded locally. So we stood up a really interesting cross-functional working group to give every judge across the state the resources they need to be able to quickly move their courtrooms online. And we had pretty early adoption. I think Michigan judges were kind of proud of the fact that we had all the technology and we could do it, and we could be first, and we could show other states what we were doing. The Supreme Court actually had a really talented engineering team. Our IT folks kind of already were working in an agile way. And so they quickly stood up this cool map of Michigan with every county, and you could click on the county and see the judges in that county, and then click on a live link to watch the courts. They're like their court processes. So the public also had access to the online courts pretty soon after the shutdown, which was unheard of, I think, nationally. So it was sort of a big deal. And that only got us more excited about other things we could do, and we did.

[00:08:45] Speaker 1: I think that touches on something that you were thinking about, obviously, in 2019, which is that we have the technology to do a lot of things that we would, that could be more beneficial to the public. We already, 2019, whenever, we had Zoom that we could have done this, where people, I always think about somebody being able to, if somebody could appear at court, I did collections, and I think about the idea of somebody being able to go on their lunch break, appear in court via their phone, and say, oh, I do owe that, or I don't owe that, and let's go to trial. But they've appeared in court, but it takes a pandemic to make that happen.

[00:09:34] Speaker 3: I mean, there are a lot of reasons why the legal profession is slow to change, and some of them are cultural, and some of them are actually legal. We are a profession that's trained to spot risk and is based on rules that have been established in the past. That's how we roll in our professional discipline. And then courts are in an even more difficult position, because, of course, their funding is not, their funding comes from another branch of government, and they have to convince that other branch of government that they might need the IT budget to be able to build services that meet the users where they are. But that's a long process. I don't know if you've ever been through a state funding cycle, but it's a slog. It's a slog.

[00:10:30] Speaker 1: I don't want to.

[00:10:31] Speaker 3: No, you don't.

[00:10:33] Speaker 1: So that kind of gets me. I wanted to touch on that a little bit, because I want to talk about your experience with that, and my statement of like, I don't want to deal with all of that. You have gone from leading the Supreme Court in Michigan. You're now CEO of AAA, the American Arbitration Association. And so, in my opinion, that was a surprising move on its face, because you were getting so much done. You were so proactive in the Michigan courts. Talk to me about why move from the court system to, I guess it is private entity or the private sector, but it's a nonprofit. Why make that move?

[00:11:20] Speaker 3: Yeah, wait till you hear what I'm getting done now. Yeah, the thing about the AAA is it's a 100-year-old nonprofit that provides ADR services to parties all over the world. We administer over half a million cases a year. So we're a very large provider of alternative dispute resolution services, which some parties prefer to litigation, right? For many B2B contracts and some C2C contracts, people just prefer to resolve their disputes in a way that's outside of court. And frankly, the provision of ADR services helps courts, because there's no way courts could handle every dispute. They're already underwater with everything they have to handle. And so ADR services really support the public justice systems. For me personally, leading an organization that gets to think about how to innovate around the services we provide without having to go through a funding, a budget slog or convince three colleagues on the Supreme Court and maybe have to write a dissent and a this and a that. And months later, you finally get a new rule in remote proceedings. It's an opportunity for me to lead an organization that's on its front foot, that is taking advantage of the unbelievable opportunities that AI is giving us for how we can provide more services and better services to more people and to be able to do it in a pretty innovative set of ways. So I think it actually is a pretty exciting next chapter for me.

[00:13:18] Speaker 1: I like that. Okay, so let's get into what it is that you're able to do there then. What are the things that, when I think about the stuff that we've talked about related to virtual court, related to, I mean, e-signing. We weren't doing e-signing really in a real way before the pandemic. But the other thing I think about is alternative dispute resolution. Being able to do things in a way that is convenient for people, maybe more quickly for people. Talk to me about what it is you guys are doing there right now.

[00:13:53] Speaker 3: So we've been, I mean, I feel like online hearings and online processes and case administration, that's stable stakes. Like if you can't do that, I'm not sure about your business model if you're providing ADR services. I guess if you're a court, you can force people to come to your courthouse. I think that's not the best way to serve the public, but I guess you could force them to do that. In our space, the parties get to choose how they interact with each other and how they interact with the neutral they select. They also get to select their neutral. So you can pick the person to mediate your case or arbitrate your case who has the right background and credentials and for whom you have confidence. But that's all, again, table stakes. I think AI has given us unbelievable opportunity to provide even more services and brand new services to parties that just, we didn't have the capacity to do previously. I mean, some of it is just point solutions. You know, at the AAA, we started building point solutions with AI three years ago, and we take our resources and train AI tools on them. So we have a clause builder AI product. So any individual or lawyer who wants to use that clause builder tool can interact with it in natural language. It's been trained on perfected clauses that have been upheld by courts, and then they can draft the perfect one for the agreement that they're engaged in. From there, we trained all kinds of other resources. So we have a lot of resources for self-represented parties. A lot of parties navigate ADR processes without lawyers. And we had a lot of resources across the website, but you know how that is. It can be intimidating even to find the right resources on a website. But once you have this new technology that allows you to train all those resources in one interface, and people can interact with it in natural language, it becomes unbelievably more user-friendly. We're seeing this really incredible increase in filings by self-represented parties this year, and I have to believe it's related, because when you can make the process easier for them to navigate and more accessible, you probably get more of those filings. And then, more recently, with lots of building and lots of learning over the last three years, we were able to make some bigger bets. And so we trained the first AI arbitrator, which is a set of agents that operate across the arbitration process in a very narrow dispute type. We started with documents-only construction cases. We did that on purpose, lots of reasons. One, we have a lot of those cases, so we had a lot of information and expertise to train on. And we had a close relationship with the community of lawyers and arbitrators who handle those cases, and they were able to be in the build with us. Like, in each sprint, we had arbitrators and lawyers involved to help us make sure we were building the best product. That agentic architecture is now being trained to support other documents-only case types, as well as a product we're calling Resolution Simulator, which is, if you wanna just get a sense of the value of your dispute before you even enter into the dispute resolution process, you'll be able to use the Resolution Simulator tool to see kind of what the strengths and weaknesses are of your particular case. Similarly, we're gonna offer that to two parties. If we have parties that are about to start an arbitration, they can opt into a non-binding Resolution Simulator process so that they can both get a sense of what the agentic tool thinks about their dispute, and that probably gets them to settlement a lot faster, which, at the end of the day, is usually good for people when they can come to a resolution that they have ownership over, right?

[00:18:05] Speaker 1: Yeah, I think a lot of times, you know, going into court, going into arbitration, going into anything, I always tried to prep my client with, you know, the goal is to get out of here, with something that both of you are not super happy with. Like, if both of you are not really happy, but neither of you are really, really mad, then we probably got to a good place. And I could always see it. You probably nailed it there, you know? Like, that's what we're looking for, because rarely do you come into court, and rarely did I come into court, and it was like, my person is 100% asking for exactly what they're supposed to get, and this other person is 100%, you know, wrong, or whatever. So I like all of that. I think it's interesting, but the thing that hits, like, that I get into is, and this may be a weird question, are we going to just slap lawyers on top of that again? You know, does that make sense? Like, are we just going to wind up having attorneys advising people on how to use AAA's arbitration thing on their, you know, on their own?

[00:19:17] Speaker 3: I could definitely imagine lawyers pitching for that business. I'm not sure it's the way to build a book, but it doesn't, but if a lawyer wants to pitch, you know, that I can, like, advise you on how to use that particular tool, sure, I guess. I don't know. I mean, I know that the legal profession is having a lot of anxiety about what the future of our profession looks like. I do a lot of talking about this to a lot of different legal audiences. I honestly think there's all good news out there. I mean, the pace of like scientific, and engineering, and medical discovery is so fast right now, and technology. There are entirely new, entire new markets building that need lawyers, and they're going to have legal questions that need answering, and there's just going to be like really interesting work for lawyers to do. It's not going to look like it did the last 50 years. The work's going to look different, but there's good work for people who are creative, and interested, and like hungry. It's going to be there.

[00:20:24] Speaker 1: Thank you for getting to kind of like what I was asking about, really. The question, what I wanted to, yeah, to ask about is really like, then what is left for lawyers? What do we do? We're going to, and I think, like you're saying, there is just stuff out there. Like, we're going to continue to open up things. We're going to continue to open up. I mean, now there's going to be potentially lawsuits against AI, you know? Lawsuits using AI, and things like that. But talk to me about the, I don't want to say, I don't want to use the word ethics here. I want to use, I want to talk about the biases, the potential for biases. What are y'all doing at AAA to kind of make sure that this is, it maintains the perception of fairness, and maintains fairness, but you know, maintains the perception of fairness, because that's really what we're looking for.

[00:21:19] Speaker 3: Yeah, I think it has to be more than the perception of fairness, it has to be the reality of fairness. And the good thing about, well, first of all, I should have said, our AI arbitrator platform, it is a series of agents that operate across the experience, but there's a human in the loop throughout. For the first, for the front end part of the case, it's the parties themselves. The parties are the ones that interact with the agents, and tell the agents if they've gotten something right, or not, and then it's a human arbitrator who serves. We pull one human arbitrator out of our round robin kind of appointment. So there's always a human in the loop. But in addition to that, we have built it in a completely transparent way. We audit it, we show our work, and we can actually show parties how it gets to, how it makes the reasoning decisions it makes. Again, the human arbitrator doesn't have to accept them, if she doesn't think they're well-founded, but we didn't stand it up until we were confident that we had at least as good as the human arbitrators do, or better, that's our standard. And showing our work around biases and auditability is really an important part of trust. And so we intend to do that. I always say, imagine if human arbitrators, or human judges had to show the work of their brain in making decisions. If a human judge had to say, yeah, this is how I got from point A to point B, instead of just writing down what they said the answer was, we'd be interesting. As somebody who reviewed the decisions of human judges for 10 years, I love judges, some of my best friends are judges, they're human beings, and they too have biases. And it is sometimes easier to show your work with a data set than it is with a human brain.

[00:23:15] Speaker 1: I love that because that gets to another one of those things, again, when we were talking about COVID and we're talking about being able to do court virtually or being able to e-sign or something. It's like, this could potentially even be better than the alternative, better than what it's doing. And so that's what this kind of sounds like to me is that we're looking at something that potentially, at least in some ways, can be better than the alternative.

[00:23:44] Speaker 3: It's certainly, you certainly have to say it's better to have more options than fewer, right? Like right now, people have a couple of options. They can go to court. If they have an ADR clause in a contract, they might be able to go to a mediator or an arbitrator, but that's about it. And 100 years ago, arbitration was an innovation. It's 100 years later, it's time for some, let's add some more options to the toolkit, every 100 years.

[00:24:12] Speaker 1: Every 100 years. Well, yeah, that's the speed of AI right now is we're not gonna have to do anything new for another 100 years. Well, so talk to me about, let's kind of look a little future-focused because I think people could look at this and go, okay, well, I've seen that alternative dispute resolution is a place that AI can get into and all that, and think, okay, well, it's here. Talk to me about where y'all are going. What is exciting you the most about what AAA is doing in this space?

[00:24:42] Speaker 3: What I'm most excited about is being able to be engaged with the frontier companies that are building what are gonna be the services and the processes and the tools of the future. We at the AAA are engaged with the frontier model companies and lots of other companies that are building kind of these new markets. I don't know how many articles you've read about agentic commerce recently, but it's kind of all I read about. And when agents are negotiating contracts on our behalf, agents negotiating with other agents, we need some different legal infrastructure to govern those agreements, as well as any disputes that come from those agreements. And the AAA is already thinking about what all that might look like with some of the leaders building the agentic commerce market. And it's just fun to be at a place that's just on the bleeding edge of where we could go with building a better future. Better dispute resolution just builds stronger communities, stronger economies, and it's good for everybody. So it's kind of fun to be on our front foot. On our front foot.

[00:26:01] Speaker 1: Well, okay, so this is on the bleeding edge. So I don't know that everyone is going to really have in their head what we're talking about agents kind of entering into contracts or negotiating contracts with other agents. What is that looking like? Because I want people to think about like where AAA or where AI or all this is going, because that really is the bleeding edge, at least right now.

[00:26:26] Speaker 3: Yeah, I mean, I don't know how many folks who listen to the podcast have agents working on their behalf yet, but if they don't today, I bet in a year, most of them will. I know that, you know, 2026 is kind of the year.

[00:26:41] Speaker 1: They better in 30 days.

[00:26:43] Speaker 3: Yeah, yeah, but it's already the case that-

[00:26:48] Speaker 1: Go do it now.

[00:26:49] Speaker 3: There are sophisticated businesses building the payment rails and the connectivity rails for agents to negotiate with other agents. And some of that negotiation is going to be forming contracts. I think Walmart had in 17% of its supplier contracts in 2025, 17% of those contracts were negotiated by agents. So when agents are negotiating with other agents, we need a legal infrastructure to govern those contracts and we need a dispute resolution process to resolve the disputes that come from them, which will be brand new disputes with brand new evidentiary issues and brand new legal issues, and probably need their own agents to be able to find their way to a dispute resolution process. There's so much exciting work to be done for lawyers. I don't know, I can barely sleep. I'm so excited all the time. I don't know how anybody else can focus.

[00:27:50] Speaker 1: I agree, and I love that. Thank you for digging a little bit further into those things, because when we talk about there's going to be other stuff in commerce that lawyers are going to have to deal with. It's just going to look different. Many times, and I think most of the time, people don't know what that means and they just go, okay, cool. But that is specifically one of those places that is a brave new world, that is a place that we're going to need lawyers in. We're going to need to make new decisions. Like you said, fascinating decisions.

[00:28:27] Speaker 3: Super fascinating, yeah.

[00:28:30] Speaker 1: I could talk to you about this for a considerable amount of time and we could have you on the show many, many times. And honestly, I hope we do in the near future. Thank you for chatting with me about AI, arbitration, the future of AI, and all of this. I really appreciate your time.

[00:28:45] Speaker 3: It's great to be here, a lot of fun.

[00:28:48] Speaker 1: Is there anything that you want to leave our listeners with regarding AI and the future of AI?

[00:28:54] Speaker 3: No, but they should follow the AAA's progress on ADR.org because we keep a pretty active, we update it actively with everything we're up to. And I think it's a fun place to see what's happening.

[00:29:09] Speaker 1: Sounds good. We'll put ADR.org in the show notes. And personally, I would suggest that people connect with you and follow you on LinkedIn as well to stay up to date with some of this stuff too. So once again, thank you for being on the show with me. I really appreciate it.

[00:29:25] Speaker 3: Thank you.

[00:29:26] Speaker 1: ♪♪