In terms of AI and small firms in 2024, the last 12 months have been “crazy”, according to Steele, who said that the work Smokeball does with small firms has been particularly meaningful.

“It means the same thing to me today as it did 22 years ago when I started my career in legal tech straight out of uni and law school and a computer science degree because my dad was a small law firm lawyer out in country, New South Wales, in Bathurst, and he taught me a lot, and I always wanted to be a lawyer and join him in the firm and become Steele and Steele. And I didn’t end up going that path because I realised I was better at math than English, to be honest. That’s what it all came down to. And started writing code,” he said.

“But I think that I saw my dad, I wouldn’t say as an unsung hero, he wouldn’t like that. But the people that he helped on a daily basis in that small law space, people who looked up to him and respected him and came for him for help in times where they needed it, I really liked that about small law, and I wanted to do that. So, being able to help one person at a time is one thing. Being able to help all of the lawyers provide services in a better, more efficient way and focus on practising the law kind of took my keen eye and have been doing it ever since for 22 years.”

In those 22 years, Steele said he’s never seen as much change in the market as there has been with the uptake of AI technologies.

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“There’s been three massive changes over my career. First, it was around that kind of year 2000, and GST and everything, from an accounting perspective, was a very big push, and technology within law firms became the right thing to do. And then the cloud, there was a big push again, and I think AI now is bigger than those two put together. If I was to pull back any moment and say, from a technology point of view, there have been big changes, but definitely AI,” he said.

“And interestingly, because it’s delivering all of the functionality everyone’s dreamed of, but everyone’s looking up, because I think it’s this dichotomy of everyone being very excited about it, but everyone also being very scared about it. And it’s kind of creating an environment where lawyers are very busy, but they’re definitely looking out from their desk to say, ‘hey, I need to know more or learn more or understand this. Cause I feel like it’s exciting, but I also feel like it’s scary’.”

As such, as 2024 comes to an end, Steele said that the legal profession is still very much in an “early adopter phase”.

“A lot of people might have tried it, but I think that a one-off trial having, attending a webinar or a seminar is one thing, but actually utilising it in a meaningful way in your firm. We’re definitely in that early adopter phase, and I would say that’s probably, to me, no more than 15 or 20 per cent of the kind of active lawyers and users out there. And I’m seeing that kind of across not only our world, our client base, but generally in terms of small law in Australia, the UK, in the US. The early adopters are absolutely flying, to be honest,” he said.

“And the use cases, I actually think it’s more about technology companies like ours keeping up with them, because they’re like, what else can we do? Can we do this? And they’re almost driving that roadmap, which is great for us. I think the education piece for the other 80 [to] 85 per cent is just as much about education as it is the technology itself. And I think that’s going to take a few years, to be honest, to get both the understanding, the education, the trust, and obviously the technology will develop as well.”

As this tech continues to develop and change at pace, Steele said, it’s hard to tell where the market – and smaller firms – will be sitting a year from now.

“Models came out, and generative AI through ChatGPT was something everyone was talking about. And that was in November last year. And I think that change has been huge during that time. Models have changed, access to these models has changed, pricing of these models has changed. I don’t think I know where we’re going to be sitting in a year’s time, to be honest,” he said.

“But I think that they are going to become more accessible, and from a financial perspective as well as a technology perspective – some of these models, they are going to become smarter. So, I think in a year’s time, we’ll look back and say this is a technology that has been a massive game changer, and we’ll know exactly where those areas are.”

The transcript of this podcast episode was slightly edited for publishing purposes. To listen to the full conversation with Hunter Steele, click below: