How AI and Legal Tech Can Get a Foothold in the U.S.

By Grit Daily Staff Grit Daily Staff has been verified by Muck Rack's editorial team
Published on May 23, 2023

One of the major problems with developing legal tech in the United States is the state bars of the 50 states. Even when LegalZoom was just trying to create template forms back in the early 2000s, two dozen state bars filed a major lawsuit against them, resulting in LegalZoom having to pay more than $100 million to settle the case. With a history like that, it’s no wonder legal tech has been slow to take off in the U.S. But a few weeks ago, I had a discussion with John Anthony Castro, CEO of AiTax.com, who explained how legal tech could gain a foothold in the U.S.

“There’s a U.S. Supreme Court case called Sperry v. Florida, which ruled that state bars don’t have the constitutional authority to regulate the practice of federal law. This gave birth to the concept of federal practitioners immune from state bar regulation. This includes patent and trademark law, immigration law, bankruptcy law, and tax law. This is where AI has to start,” explained Mr. Castro. “If we start with federal practice areas and prove the efficacy of AI, state law practitioners will beg us for the same advanced tools to beef-up their practices as well.”

Mr. Castro is the Founder of Castro & Co., an international tax law firm established in 2014, and the inventor, chief architect, and CEO of AiTax.com, a patented tax software that utilizes artificial intelligence to not only prepare taxes but also to identify particularized tax planning opportunities for individual users. Just last year, before the market downturn, AiTax was valued at $180 million. As Mr. Castro explained, “No coder in the world can properly build-out a decisional AI system unless he or she is paired with a master in that field. That’s the missing puzzle piece all of these so-called experts get wrong. This is what we got right. AI is like electricity: by itself, it’s not much. It’s all based on what you do with it to harness and fully leverage its power. Decisional AI is the only viable option for the legal industry because it can be audited and reviewed by regulators to ensure compliance.”

Hearing Mr. Castro explain decisional artificial intelligence was like listening to Stephen Hawking explain theoretical physics. I became absolutely enthralled and fascinated. Where did this guy come from, and why is he not on TV as an expert to educate the masses?

A page of history is worth a volume of logic. I decided to learn more about this fascinating character. Mr. Castro was born into a low-income family. He identified student loans as a means of achieving success, and so he admits he freely kept taking on more and more student loan debt to get through undergrad and law school.

In May 2013, he graduated from Georgetown Law with $325,000 in student loan debt. Shortly after graduation, John accepted a short-term consulting position with Gudorf Law Group in Dayton, Ohio. The firm’s owner had recently acquired a neighboring professional’s tax practice and engaged Mr. Castro to assist in transitioning the tax practice into his law firm.

In January 2014, Mr. Castro accepted a position with CliftonLarsonAllen’s international tax division in Orlando, Florida. According to Mr. Castro, it took less than a year to realize he was smarter than all of his superiors, so he branched off and founded Castro & Co. only a few months later, in October 2014. Within a few weeks, Mr. Castro had earned more than his entire annual salary at his previous firm. “It was mind-blowing,” he said, “The revenue just kept increasing month after month.”

By 2017, Mr. Castro had offices in Dallas, Miami, Chicago, Los Angeles, Seattle, and New York. After being accepted to the Owner and President Management Program at Harvard Business School in 2019, Mr. Castro was inspired by a course taught by a student at the Massachusetts Institute of Technology (MIT) that clarified only masters in a field can accurately build out artificial intelligence in their field. Mr. Castro began working on a tax planning and preparation software that utilized artificial intelligence.

On February 22, 2022, the U.S. Patent and Trademark Office issued U.S. Patent number 11,257,167, titled “Tax Planning Using Video-Based Graphical User Interface and Artificial Intelligence,” followed by U.S. Patents 11,397,995 and 11,556,999. With these three patents, AiTax is the only patent-protected legal tech company in the United States actively generating millions in revenue.

In April 2022, AiTax was valued at $180 million. In November 2022, Mr. Castro graduated from the Owner and President Management Program at Harvard Business School and is now an alum and fellow of Harvard Business School.

Needless to say, we are on the verge of a new era in artificial intelligence. Companies like AiTax.com are just the start. We need AI wizards like Elon Musk, John Anthony Castro, and others to continue pushing this country into the next generation of limitless technology. AI is a tool that can empower attorneys to be more flawless with their work and precise with their planning. State bars should embrace this new technology and consult with legal tech geniuses like Mr. Castro to bring the practice of law into the 21st century and allow AI and legal tech to gain a foothold in the U.S.

By Grit Daily Staff Grit Daily Staff has been verified by Muck Rack's editorial team

Journalist verified by Muck Rack verified

Grit Daily News is the premier startup news hub. It is the top news source on Millennial and Gen Z startups — from fashion, tech, influencers, entrepreneurship, and funding. Based in New York, our team is global and brings with it over 400 years of combined reporting experience.

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