At Relativity Fest this year, I sat down with Lourdes Fuentes, CEO at Karta Legal to talk about the Legal Data Intelligence (LDI) initiative and how it’s shaping the future of the legal industry. 

To understand why Fuentes champions initiatives like LDI, it helps to look back at her vast experience navigating the legal field’s technological upheavals.  

Career Trajectory: A Blueprint for Adaptation 

Fuentes’ career provides a compelling narrative of adaptation to technological disruption in the legal field – a story that resonates with legal professionals navigating today’s AI-driven landscape. 

She began as a commercial and bankruptcy litigator in New York City after graduating law school in 1992. A pivotal moment came when she took an eDiscovery role at Duane Morris, a move that colleagues at the time advised against. Looking back, Fuentes credits this decision as the foundation of her subsequent career success, positioning her at the forefront of a major industry shift. 

Her specialization grew through high-profile work, including a discovery management role in the Madoff trustee litigation at Baker Hostetler starting in 2008. This marked her full transition from litigation to legal operations and technology management.Recognizing the need to expand her expertise, Fuentes proactively upskilled, becoming a certified Legal Project Manager and a Lean Six Sigma Black Belt to master process management. 

After working on the Madoff case, she joined partners from major law firms to pursue RMBS litigation on behalf of the FDIC and several Federal Home Loan Banks. Fuentes focused on eDiscovery and the innovation and implementation of legal technology. At Grais & Ellsworth, Fuentes helped manage complex, high-stakes litigation against the largest investment banks, leveraging a lean, high-performing team supported by advanced processes and technology.  

While at Grais & Ellsworth, she founded Karta Legal, a consultancy that helps law firms and corporate legal departments improve service delivery and data management through best practices and tailored technology solutions. Karta Legal has been recognized by the National Law Journal as a Legal Technology Trailblazer and continues to guide clients leading the generative AI transformation. 

Through a “Data Lens”: The Legal Data Intelligence (LDI) Initiative 

For Fuentes, approaching legal challenges “through a data lens” is a guiding principle. As an LDI Architect, she works with a collaborative network of in-house, law firm, and legal technology vendor professionals to develop practical frameworks for managing legal data. 

A central tenant of her approach is the “Garbage In, Garbage Out” principle: without well-governed, reliable data, investments in AI and other tools will fail to deliver value. Fuentes emphasized that effective data control is a prerequisite for any successful technology implementation.  

For Fuentes, the LDI initiative represents a shift in mindset. Rather than viewing data as a liability, LDI reframes it as a strategic asset that can be mined to make legal departments a value-generating center rather than a cost drain. 

A primary focus of Fuentes’ work and LDI’s mission is solving the most significant data challenges faced by corporations and law firms, including: 

• Data Governance: Establishing clear policies for managing data. 
• Defensible Deletion: Creating ethical, defensible processes for deleting data that is no longer needed. 
• Data Quality: Ensuring the reliability of data, which is especially critical for training and utilizing generative AI. 

LDI Use Case: Outside Counsel Value Management 

As part of LDI’s “Business of Law” group, Fuentes has helped update a use case (Outside Counsel Value Management) focused on managing outside counsel – an effort aimed at rethinking how legal departments measure and pay for outside counsel. The goal is to use data to transition away from the billable hour or, alternatively, to develop new metrics that quantify an attorney’s value based on measurable outcomes and business impact rather than time spent. 

At the heart of this framework is the use of metrics and Key Performance Indicators (KPIs) to define and measure value. For example, by analyzing variables such as case size, jurisdiction, and data volume, and by tracking historical costs, legal departments can better understand what they have paid in the past. 

This historical data, combined with modern outside counsel guidelines that emphasize efficiency and technology adoption, lays the groundwork for a value-based billing model aligned with the generative AI era. 

Generative AI: The New Paradigm Shift 

The rise of generative AI marks a transformative era in the legal industry – bringing both enormous opportunity and significant challenges. Fuentes frames the moment as a historical parallel to past technological disruptions, where initial resistance eventually gave way to adaptation and innovation.  

She draws comparisons to the adoption of eDiscovery and the shift from manual legal research to electronic research tools like Westlaw and Lexis.In both prior cases, there was initial resistance and many in the industry feared job displacement (e.g., “what are we going to do with all these lawyers?”). Over time, however, roles shifted rather than disappeared, and the industry adapted rather than contracted. 

The challenge today extends to law firm business models. Many firms are struggling with how to create a new profit model in an AI-driven world. There is significant resistance and a lack of understanding regarding the transition to value-based billing. Closely tied to this is the question of billing for AI itself. Just as firms once wrestled with how to charge clients for Westlaw or Lexis research, today they areinvesting heavily in piloting AI tools and grappling with how to ethically and practically bill clients for these costs. When it comes to legal research, the industry ultimately found a way to incorporate these innovations into the cost of doing business, and Fuentes believes the same path will unfold for generative AI.  

The Ethical Imperative and the Dawn of AI Governance 

Beyond the business model, Fuentes points to a more pressing concern: the ethical use of generative AI. She calls it “the elephant in the room” – an issue that requires immediate and transparent attention. 

Central to this imperative is transparency. Fuentes stated that lawyers have a professional duty to be transparent with clients about their use of generative AI. This includes discussing what tools are being used and how, what new risks the client may be incurring and the potential benefits of the technology. 

Piloting AI tools “in the labs downstairs” without client awareness, Fuentes warns, is a practice that should be avoided. Instead, she advocates for open dialogue, noting that legal departments are grappling with the same challenges as outside counsel.  

Fuentes emphasizes that ethical AI use is inseparable from strong data governance. The ability to deploy AI defensibly depends on the quality, control, and traceability of the underlying data. To that end, organizations should  begin developing frameworks for saving and logging prompts and outputs, creating robust audit trails, validating that AI tools are performing as expected and tracking which underlying models are being used by a given tool. 

These practices are critical for defending the use of AI, which will inevitably be challenged in litigation, M&A, and other legal contexts. Fuentes stressed that technology is “way ahead of where regulation and ethical frameworks” are, so organizations must proactively create their own defensible principles. 

eDiscovery Professionals: Leaders of the New AI Frontier 

According to Fuentes, professionals with a background in eDiscovery are uniquely equipped to lead the charge in AI governance. Their experience managing complex data workflows gives them a natural advantage in understanding how to apply governance, oversight and defensibility to emerging AI tools.  

She points to their transferable skill set – expertise in QC (Quality Control) logs, audit trails, and chain-of-custody tracking – as directly applicable to responsible AI implementation. 

Fuentes also sees this moment as one of career reinvention. Just as the role of the “eDiscovery professional” was emerged in response to earlier waves of technological change, she envisions new positions taking shape, such as “legal data intelligence officers.” 

A key priority for the industry must be upskilling existing personnel to handle these new challenges and opportunities, rather than assuming AI will simply replace jobs. Fuentes believes AI will create “more work than ever before” related to risk, compliance, and novel legal issues. 

LDI Frameworks and Call to Action 

Fuentes highlighted new, practical resources developed by LDI and urged industry professionals to get involved. 

One of the latest developments is the Strategic Response Readiness Framework, a new LDI use caseco-authored a by Fuentes. This model provides a blueprint for creating an internal team responsible for handling and responding to the complex web of AI laws, regulations, and executive orders emerging at the local, state, and federal levels. 

Fuentes also issued a call for collaboration, underscoring that LDI is a volunteer-driven organization that thrives on shared expertise. With applications for the next cohort of architects opening soon, there is a need for more ambassadors to help build frameworks that will shape the industry’s future. The strength of LDI, she noted, lies in its diverse mix of perspectives from law firms, in-house departments, and technology vendors. 

Conclusion 

The legal industry is undergoing a profound transformation driven by generative AI, a shift that parallels the advent of eDiscovery. Professionals with eDiscovery backgrounds are particularly well positioned to lead in the emerging field of AI governance, as their expertise in audit trails, quality control, and chain of custody is directly transferable.  

This technological evolution is forcing a critical re-evaluation of the legal business model, intensifying the push toward value-based billing over the traditional billable hour. However, this transition is met with significant resistance and uncertainty within law firms regarding future profitability.  

To help guide this transition, LDI is developing practical frameworks – including models for managing outside counsel value and creating strategic response teams – that aim to equip the industry with the structure it needs to adapt responsibly. 

So, what do you think? What has the impact of LDI so far been on the legal community? Please share any comments you might have or if you’d like to know more about a particular topic. 

Note: This write-up from a recorded interview was prepared with the assistance of NotebookLM from Google and reviewed and edited by both Lourdes and me for accuracy.

Disclaimer: The views represented herein are exclusively the views of the author, and do not necessarily represent the views held by my employer, my partners or my clients. eDiscovery Today is made available solely for educational purposes to provide general information about general eDiscovery principles and not to provide specific legal advice applicable to any particular circumstance. eDiscovery Today should not be used as a substitute for competent legal advice from a lawyer you have retained and who has agreed to represent you.