SolutionsHire top legal talent for any scope of workGet Started Contact us to find the best fit for any in-house or law firm role Testimonials Trusted by the world's leading legal departments FAQ Frequently asked questions about working with Legal.ioEmployer Resources Tools and guides for hiring managers Legal tech firms struggle to sell their AI-based products to large law firms, where the billable hour model creates mixed incentives.
In-house legal teams adopt AI at higher rates than large law firms, which stick to billable hour models.
Over 50% of legal tech company customers are in-house teams, with private law firms remaining cautious.
AI’s impact on law firm compensation and promotion structures is uncertain and evolving.
Legal tech companies continue to encounter resistance in selling AI products to large law firms, a Law.com report shows. Despite increased client expectations for efficiency, firms operating on billable hours lack incentives to streamline processes through technology, leading to slow adoption of AI-based solutions.
"More often than not, a lot of large law firms that say that they use AI are using it for back-end or operational purposes," said Daniel Lewis, U.S. CEO of the legal AI firm LegalOn. "It's not necessarily touching client work or the billable hours yet."
53.33% of the Global 100 are already using GenAI tools in their billable work and another 40% are planning to do so within the next six months, according to a survey by Persuit.
However, most firms in the survey reported that the amount of billable work that is actually impacted by Gen AI tools is small (5% or less).
"If you're billing by the hour, you're not really very incentivized to buy some software that makes it take fewer hours to do the same thing," said James Clough, chief technology officer and co-founder of Robin AI.
In-house legal teams, by contrast, have fewer hurdles. With budgets to manage and cost-effectiveness in mind, these teams are embracing AI tools more openly, aiming to reduce workloads and increase efficiencies across their operations.
According to the Law.com report, in-house lawyers and Fortune 500 companies make up over 50% of many major legal tech companies’ customer base.
"We find in-house teams are much more motivated by speeding up work and efficiency gains with AI tools such as contract review," Lewis said.
Many AI experts and lawyers believe the sector is moving towards a hybrid pricing model, with the hourly billing model becoming redundant and other value pricing models emerging.
"When you have Generative AI technologies that can churn out first-cut legal opinions in minutes, where it would usually take a lawyer about half a day at least, that's a significant disruption in how we produce legal deliverables," said Rajesh Sreenivasan, head of the technology, media and telecommunications law practice at the Singapore "Big Four" law firm Rajah & Tann. "So a new pricing metric is needed."
Both law firms and legal tech companies agree that AI is set to accelerate career development and eliminate the early grunt work that was once viewed as essential to climb the corporate ladder. This will allow junior lawyers to advance faster, which will require law firms to rethink their pay and partner structure.
"Law firms have a greater complexity of politics because of their partners," said Harry Borovick, general counsel at U.K.-based legal artificial intelligence firm Luminance. "So if they spend money on technology, it comes out of the partner pool."
Legal tech leaders note, however, that the current AI adoption rate is still at an early stage. It remains to be seen how the technology will impact law firm bonus structures and partner promotions.
As with all immigration changes, it’s important to educate yourself and be aware of timelines, requirements for applying, and the potential scams that often happen when such relief measures are announced.
Cases of exploiting human psychology for financial gain are on the rise.
We all know the feeling. You’ve breezily agreed to a deadline which seemed to be a comfortable distance away at the time. But the crunch date is approaching at 100 miles per hour and you don’t have the work done – you’re going to miss the deadline. So, what can you do? For sure, waiting until the deadline has arrived and then announcing that things are not ready is going to leave you with one very unhappy client. Let’s consider some better ways of approaching the situation.
CLOs and GCs are increasingly finding themselves at the forefront of the battle against cyber-attacks and data breaches, as these threats pose significant risks to companies' data, reputations, and financial stability.
The FTC and DOJ have introduced new rules altering the filing process for companies pursuing mergers, demanding a substantial increase in documentation and information about competitive overlaps, supplier relationships, and deal rationales.
The UK's Information Commissioner's Office (ICO) has taken a pivotal step in advancing data protection standards.
This year’s edition of the annual ABA Profile of the Legal Profession dubs 2016 - 2026 the “Decade of the Female Lawyer”. Women now make up 41% of U.S. attorneys, up from 36% in 2014.
Explore the recent research on deep learning and keystroke mapping, achieving 95% accuracy in translating sounds to letters. This article highlights how this technology unveils new security concerns, focusing on law firms' unique vulnerabilities, including data breaches and cyberattacks on valuable client information.
Ernst & Young's US General Counsel, Ann Cook, resigns amidst ongoing scrutiny of the firm's handling of an ethics incident. The situation, involving allegations of cheating on CPA exams, has led to a $100 million SEC fine and further scrutiny of the firm.
