Commentary: How the New Generation of AI Tech May Impact the Legal Profession*​​​

More than a decade ago, lawyers were singled out as an endangered occupational species, their livelihoods at risk from advances in artificial intelligence. But the doomsayers got ahead of themselves, according to a New York Times commentary. While clever software has taken over some of the toil of legal work — searching, reviewing and mining mountains of legal documents for nuggets of useful information — employment in the legal profession has grown faster than the American workforce as a whole. Today, a new AI threat looms, and lawyers may feel a bit of déjà vu. There are warnings that ChatGPT-style software, with its human-like language fluency, could take over much of the legal work. The new AI has its flaws, notably its proclivity for making things up, including fake legal citations. But proponents insist those are teething defects in a nascent technology — and fixable. The impact of the new technology is more likely to be a steadily rising tide than a sudden tidal wave. New AI technology will change the practice of law, and some jobs will be eliminated, but it also promises to make lawyers and paralegals more productive, and to create new roles. That is what happened after the introduction of other work-altering technologies like the personal computer and the internet. ​​​Read more.

*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.

Don't miss the "Let's Chat[a]bot It: Ethical Considerations for Using Artificial Intelligence and ChatGPT in Law Practice" session at next week's ABI Annual Spring Meeting. There's still time to register for this and other key sessions!

Car Breakdowns Are Making More People Fall Behind on Their Loans​​​

Cars are staying on the road longer, reaching an age where they need substantial repairs and/or break down. It is a key reason more people are falling behind on their auto loans, the Wall Street Journal reported. The trend, noted by lenders, consumer attorneys and others, is another example of the long-lasting effects of the pandemic, which transformed the auto industry by making new and lightly used vehicles hard to come by. Some lenders are getting spooked, tightening their standards so that drivers who want to buy older vehicles have fewer options for getting financing. Americans who already were discouraged by the rapid increase in car prices over the past few years could have an even harder time finding a car they can afford, or one that won’t guzzle up their savings after they buy it. ​​​Read more. (Subscription required.)

U.S. Weekly Jobless Claims Increase as Labor Market Slows​​​

The number of Americans filing new claims for unemployment benefits increased more than expected last week, a further sign that labor market conditions were loosening up as higher borrowing costs dampen demand in the economy, Reuters reported. Initial claims for state unemployment benefits rose 11,000 to a seasonally adjusted 239,000 for the week ended April 8. Claims, however, remain below the 270,000 level, a breach of which economists say would signal a deterioration in the labor market. Last Friday's employment report showed a solid pace of job growth in March and the unemployment rate falling back to 3.5%, while wage gains remained moderate. The number of people receiving benefits after an initial week of aid, a proxy for hiring, dropped 13,000 to 1.810 million during the week ending April 1, the claims report showed. ​​​Read more.

Commentary: Where Are We in the Credit Cycle?*​​​

There are certain times in our economic and financial environment when it makes sense to assess carefully and dispassionately where we are in the credit cycle and how this cycle relates to the business cycle, according to a commentary by Prof. Edward Altman on the Creditor Rights Coalition blog. Now is one of those times, says Altman, as the economic uncertainties mount to substantial levels. In the blog post, Altman reflects on his long history of studying credit cycles going back to the early 1970s. "My current assessment is that the benign credit cycle we have enjoyed since 2010, with the exception of a few months in early 2020, is over," Altman writes. We recently reached an inflection point to an average credit risk scenario. The later assessment is based on a number of historical indicators over the last 60 years. This conclusion is tempered by the strong likelihood that the U.S. credit picture will continue its heightened risk trend toward a stressed scenario by year’s end, and if we continue to incur unexpected shock catalysts, similar to the recent crypto and Silicon Valley Bank and other banking meltdowns, combined with a “hard-landing” economic recession, we could witness another financial-credit crisis, with non-financial corporate risky debt default rates rising to perhaps 10% or more over one or two years, writes Altman. Click here to read the full commentary. ​​

*The views expressed in this commentary are from the author/publication cited, are meant for informative purposes only, and are not an official position of ABI.

U.S. Wholesale Inflation Pressures Eased Sharply Last Month​​​

U.S. wholesale prices fell in March, a sign that inflationary pressures in the economy are easing more than a year after the Federal Reserve began aggressively raising interest rates, the Associated Press reported. Plunging energy prices pulled the government’s producer price index down 0.5% from February to March; it had been unchanged from January to February. Compared with a year ago, wholesale prices were up 2.7% in March — the mildest 12-month increase since January 2021 and down significantly from a 4.7% annual rise in February. The Labor Department’s producer price index reflects prices charged by manufacturers, farmers and wholesalers. It can provide an early sign of how fast consumer inflation will rise. A huge drop in wholesale gasoline accounted for much of the sharp slowdown in producer prices. But even excluding volatile food and energy prices, so-called core wholesale inflation fell 0.1% in March, the first such drop in nearly three years. The Fed and many private economists regard core prices as a better gauge of underlying inflation. Core wholesale inflation was up just 3.4% from March 2022, the lowest year-over-year rise since 2021. ​​​Read more.

Commercial Real Estate Woes Weigh on New York City Recovery, NY Fed Says​​​

Ongoing stress in the New York City commercial real estate sector is still creating economic headwinds for the region as it nears a complete recovery from the coronavirus pandemic, and it’s unclear when or if the sector will return to its prior strength, the New York Fed said Thursday, Reuters reported. “While the residential rental market has bounced back, the retail and office markets have remained slack — largely due to the shift to remote work and online shopping,” the bank said in a post on its website. Commercial rents in Manhattan are down a lot from where they were before the pandemic, and “this weakening trend may continue as more and more commercial tenants roll off leases that were negotiated when demand for office and retail space was far stronger.” While workers are coming into the office more now, they’re not doing it in great enough numbers to help lift up all the companies that once supported these workers, the New York Fed noted. “It's very clear that the absence of office workers is continuing to put strains on the New York City economy,” said Jaison Abel, head of Urban and Regional Studies at the bank, in a press briefing. When workers don’t come into the office, that means they’re not hitting shops and leisure firms, impairing employment in those parts of the service sector. The New York Fed noted that while areas that surround the city have largely recovered on the jobs front, the city still has about a 1% shortfall in workers relative to before the pandemic. ​​​Read more.

Latest Podcast Explores Proposed UCC Amendments Aimed at Virtual Currencies and Other Digital Assets​​​

The second TechBytes podcast features ABI Emerging Industries and Technology Committee Communications Manager Tara J. Schellhorn of Riker Danzig LLP (Morristown, N.J.) talking with Prof. Juliet M. Moringiello, associate dean for Academic Affairs at Widener University Commonwealth Law School (Harrisburg, Pa.). Schellhorn and Moringiello discuss proposed Uniform Commercial Code amendments aimed at bringing the UCC into the digital age by providing commercial law rules for a new category of transactions: the transfer and leveraging of virtual currencies and certain other digital assets. Click here to listen!

For more information on the proposed amendments, please click here.

ABI’s Annual Spring Meeting Kicks Off in One Week in D.C.! Don’t Miss Your Opportunity to Grow Your Knowledge and Network​​​

ABI’s Annual Spring Meeting kicks off next Thursday in Washington, D.C. We know you won’t want to miss one of the largest gatherings of bankruptcy and insolvency professionals. This year’s lineup features more than 20 hot topical sessions catered toward business and consumer professionals of all industry expertise levels, on such topics as subchapter V, ethics and compensation, bankruptcy court jurisdiction and much more; networking at the Opening Reception at the Wharf DC, President’s Inauguration Dinner and more — with the nearly 1,000 industry professionals in attendance; engagement with dynamic speakers, including judges, practitioners and seasoned financial pros — including appearances by Ken Feinberg (9/11 Special Master) and keynote speaker Prof. Kenji Yoshino (with a talk on diversity issues); and inspiring presentations, including a panel of bankruptcy judges discussing circuit splits and hot topics led by ABI Editor-at-Large Bill Rochelle. Register today. ​​

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