Latham Litigation Head Sees AI Effects as a Leader and a Lawyer

In late 2019, I wrote a detailed profile of the litigation practice of Latham & Watkins, using it as a window into the evolution of both litigation and large law firms over the decades. One of the lawyers I spoke to was Michele Johnson, then in her first year as Global Chair of Latham’s litigation and trial department.

Almost five years later, I checked in with Johnson to get an update on litigation at Latham—and to see what trends it might reveal about the world of litigation more generally. We discussed the overall state of the litigation market, the booming practice areas of antitrust and artificial intelligence, whether AI is ready to handle high-level litigation tasks, and the increasing use of contingency fees.

The State of Litigation Is Strong

Under Johnson, now entering her sixth year as chair, Latham’s litigation department has grown considerably. When we spoke in 2019, there were almost 800 lawyers, out of 2,800 at the entire firm. Today, the department boasts around 1,100 attorneys, out of Latham’s 3,700.

And the firm’s litigators are extremely busy. Johnson is a good example: our call had to be rescheduled because she was in the middle of preparing for a trial that was scheduled to start this week—part of the long-running patent dispute between Latham’s client, Sarepta Therapeutics Inc., and a rival, Nippon Shinyaku Co. Ltd.

As goes Latham, so goes Big Law: last year, M&A work and IPOs declined, while litigation demand increased. In a January 2024 interview with Roy Strom, Brad Hildebrandt of Hildebrandt Consulting described litigation as “booming.” Lateral hiring in 2023 dropped by 23%—but it would have been worse if not for an uptick in litigation, according to recruiter Ru Bhatt of Major, Lindsey & Africa.

Historically Latham might have been more well-known for its transactional practice as opposed to litigation, and the firm’s corporate department remains larger in terms of headcount than litigation. But in Johnson’s view, today the departments are “equally strong—and absolutely world-class.”

Antitrust and AI

When we spoke in 2019, Johnson identified antitrust as an area that Latham was focusing on for strategic growth, and she was prescient. The Biden administration has set a new record for merger enforcement activity—and Latham has enjoyed what Johnson described as “spectacular success” in helping clients navigate these challenges.

Clients retain Latham for some of the most high-stakes and high-profile antitrust cases—such as the Federal Trade Commission’s bid to block Tapestry Inc.’s attempted takeover of rival Capri Holding Ltd., in which Latham represents Tapestry. And despite some significant antitrust hires over the past few years, Latham continues to seek additional talent in the area.

So antitrust is a top current priority for Latham’s litigation department—as is artificial intelligence. It’s advising OpenAI, the company behind ChatGPT, in some of its most consequential and headline-making matters, including lawsuits filed by the New York Times and comedian Sarah Silverman.

Litigation at the intersection of antitrust and AI is “particularly interesting,” according to Johnson, “because companies are using AI to, among other things, develop algorithmically influenced pricing. Regulators are asking if it’s anticompetitive if the companies are using similar data. We are on the absolute cutting edge of those cases, involving one of the most interesting issues in antitrust.”

And once again, Latham’s experience reflects what’s going on in the broader litigation landscape. The Justice Department is intensely focused on preserving competition in the rapidly expanding AI industry—and scheduled a May 30 workshop at Stanford University to focus on antitrust issues in AI. These cases aren’t going away—and instead, will be a boon to Big Law litigators in the years to come.

AI Not Essential Litigation Tool Yet

Artificial intelligence is great for litigators as a source of cases—and revenue. But it’s not quite there yet as an essential tool for litigators to use as they go about their work.

As a law firm that represents OpenAI, Latham is optimistic about AI and its implications for legal practice. It has developed and continues to refine proprietary AI products, internal to Latham, that it uses for both firm management and work on client matters (consistent with the rules regarding protection of confidential client data).

But as a practical matter, AI isn’t yet playing a major role in the day-to-day work of Latham litigators. As Johnson told me, she doesn’t think the technology has reached a level where she could rely on it to apply a judicial decision to the particular facts of her case or to distinguish away a precedent.

This is consistent with how many other Big Law firms are approaching use of AI. Some, like Carlton Fields, ban use of generative AI for writing briefs.

I’ve talked to other Big Law litigators who are making cautious forays into using AI, trying it out for relatively simple tasks that a junior associate might do—like summarizing a deposition. But they always double-check the AI-generated work—and they are always mindful of cautionary tales like the Manhattan lawyers who got sanctioned last year for filing a ChatGPT-generated brief featuring non-existent cases.

Contingency Fees On Rise

Although AI isn’t yet a major part of Big Law litigation practice, someday it will be. Comparing it to the development of the internet, Johnson told me we’re in the “dial-up modem phase” of AI—meaning that, for those of you too young to remember how we used to access the internet, we will someday look back on the AI of this period and laugh at its primitiveness.

The rise of AI will have major implications for law firms—and their revenue models. For starters, I predict the efficiency gains it will eventually create will make billing by the hour increasingly less lucrative, and ultimately less sustainable, for Big Law.

On the litigation side, one possible way to address this problem is by relying more on contingency fees. This ties a law firm’s income on a matter not to the number of hours billed, but to the outcome—which is often something clients prefer.

And when a firm obtains a large verdict or settlement for a client in a contingency-fee case, the economic rewards to the firm can be outsized. The $787.5 million settlement that litigation powerhouse Susman Godfrey obtained for Dominion Voting Systems Inc., in its blockbuster lawsuit against Fox Corp., helped Susman more than double its profits per equity partner—and rank fourth among large law firms in profits per partner.

Mindful of this, Big Law firms have been focusing more on contingency-fee arrangements in recent years—and Latham is one of them. Around four years ago, the firm established a litigation investment committee, tasked with evaluating whether a case might work as a contingency case.

Johnson worked on one contingency-fee case that went to trial last year, a trend she expects to only pick up steam in the years ahead. And in light of the Latham Litigation & Trial Department’s record over the past few years, it’s a development that Johnson and her colleagues welcome.

“We are eager to bet on ourselves and show confidence in our success.”

David Lat, a lawyer turned writer, publishes Original Jurisdiction. He founded Above the Law and Underneath Their Robes, and is author of the novel “Supreme Ambitions.”

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