Tough problem: AI removed legal friction
Crazy Idea: Immediate tort reform
What are the chances that a horde of really smart, often vindictive and newly broke people go hungry without a fight?
The Friction Was a Feature
I have often thought that our civil legal system has always had a natural speed limiter built in: money, time, and expertise.
The minimum realistic cost to bring a civil complaint/lawsuit is around $10,000 once you factor in court fees, attorney time, depositions, motions, and discovery.
That’s real friction and that friction was a feature.
$10k is enough to filter out at least some level of nuisance. It's a tax on bad-faith litigation. Tax something and you get less of it. Until recently, you needed a case that at least needed to be worth putting out some money to pursue.
What happens when AI removes money, time, and expertise as limiters?
The AI Wave
AI is dismantling the expertise barrier from both ends of the system simultaneously.
On the plaintiff side: tools like DoNotPay previewed a world where anyone can access legal logic on-demand. The FTC eventually slapped them down, requiring the company to pay $193k and barring it from claiming it could substitute for professional legal services. But they can’t stop progress. Claude, GPT-4, and a dozen specialized legal tools can now draft a complaint, identify statutory violations, and research case law in minutes. For next to nothing.
On the supply side: law firms are already cutting. Baker McKenzie eliminated between 600 and 1,000 roles (~10% of its global workforce) with AI explicitly cited as a factor. For the most part, the lawyers themselves haven’t been cut yet. But the support infrastructure that made their work possible is being hollowed out.
So as firms shrink and junior lawyers get squeezed out of a profession that’s shedding its entry-level pipeline, those lawyers don’t disappear.
They need to eat.
The most natural thing a trained lawyer knows how to do is sue.
Welcome to the Statute Jungle
Hungry lawyers are ready to eat.
American companies violate consumer protection statutes, employment laws, and data privacy regulations every single day. Not out of malice, but because the regulatory stack has become genuinely incomprehensible. CCPA, BIPA, TCPA, FCRA, ADA, WARN Act, state UDAP statutes, wage-and-hour rules that vary county to county. I could literally type any 4 letter combo and it’s probably some regulatory law they need to follow. The books are full of technical violations that have historically been too small, too obscure, or too expensive to litigate.
Historically.
They won’t be too expensive much longer.
When the cost to identify a violation drops to near zero - an AI can scan a company’s practices against 50 applicable statutes in minutes - and the cost to initiate a lawsuit drops nearly as fast, the calculus changes completely. The rate of pro se litigants relying on AI tools is already increasing according to Above the Law, and that’s before the wave of displaced legal professionals turns their skills outward.
It Will Kill Small Businesses
It’s going to get ugly. Large corporations will absorb this. Small businesses won’t. The FTC will be focused on the wrong things as usual.
Small businesses already have few ways to defend against abusive lawsuits, since budgetary constraints prevent them from employing legal or compliance staff. This isn’t theoretical, the ADA alone has produced waves of serial “tester” plaintiffs who file complaints against small businesses with no intention of ever being actual customers, extracting settlements through pure cost asymmetry. The U.S. lawsuit system already costs America’s small businesses $160 billion annually according to the Institute for Legal Reform
Litigation expenses for small businesses have increased by nearly 60% over two decades, with average costs ranging from $3,000 to $150,000 per case. If litigation results in a settlement or judgment against the business, small businesses may struggle to pay, leading to further financial difficulties or even bankruptcy. They have no chance against hungry piranhas.
I read that Walmart gets sued an average of 20 times a day - roughly 5,000 cases a year (NatLawReview) They can afford it, you can’t.
This becomes yet another structural advantage for scale. Big companies can build compliance infrastructure. They can run AI against their own practices before plaintiffs do. They can maintain in-house counsel ratios that small businesses can never afford.
It’s moat for them, death for you.
What This Does to Human Beings
On personal level, you better watch out too. You a walking target if you have a job.
This is terrible for society.
Think about what happens when individuals and small business owners internalize that any human interaction is a potential lawsuit. People stop interacting with any level of humanness.
The rational response to a zero-friction litigation environment is to reduce exposure.
And the primary way you reduce exposure is to reduce interaction.
When every interaction carries legal tail risk, people stop taking them.
No Tort Reform; Just Torture
This is going to get worse before it gets better.
The right long-term answer is tort reform —> higher bars for filing, fee-shifting provisions with real teeth, loser-pays where the violation is technical rather than material.
Ain’t gonna happen in the near term.
In the meantime, we’re entering an era of technically-valid, practically-marginal civil litigation at industrial scale. Companies will have to budget for it the way they budget for theft, a cost of doing business, paid quietly in settlements that never see a courtroom. Small businesses will eat it or fold. Almost always fold. Individuals will pull back from each other.
The displaced lawyers won’t be on the street. They’ll be at their laptops, with an AI co-pilot, hunting for violations in your break policy. Eating your lunch.
Good luck out there.
— Matthew
Thoughts? Hit reply. Or don’t — I’ll probably just sue you.