A new survey of over 800 UK lawyers by LexisNexis has found that the long journey toward business model change has begun in the wake of genAI’s arrival. For example, 39% of private practice lawyers expect their firm to adjust billing practices due to AI, up from 18% in January.
Of course, expectation is one thing, reality is another. Actual change is still very low, with just 2% saying they have ‘altered pricing structure because of AI’. But, it’s a start. This site would underline that the fact that any lawyer or law firm had altered the fundamental way they generate money because of AI is noteworthy, i.e. not relying on the billable hour.
The test will be to see whether that 2% number changes in the years ahead. The expectations that change will happen are clearly growing, and expectations are sometimes a reflection of a dawning reality.
Likewise, this number may stick at around this level for some years to come. Just because we expect systemic change to eventually break through entrenched modes of behaviour doesn’t mean it will happen any time soon.
Fundamentally it’s the clients that will drive this change by setting out new expectations, especially around any work that they see as fitting into a more fixed fee approach because of the huge time-savings gained from genAI. That will therefore tend to be high volume, or high frequency matters.
Plus, many clients, while also expecting changes to billing, are not – it also has to be said – making the leap themselves in terms of demanding change. It’s rather like people at a self-help group all saying they expect everyone taking part to quit smoking, but while the expectation is strong and people agree that smoking isn’t healthy, hardly anyone actually gives up the old habit. (Perhaps until one of the group ends up in hospital and suddenly everyone else realises they actually do need to stop smoking.)
So, how do things change? Artificial Lawyer made a chart to explain what may happen next:
- GenAI accuracy, capability and ease of use gets to such a very high level that it overpowers remaining doubters and can be deployed much more widely across the economy.
- Corporates, banks, insurance companies and governments, start to use genAI tools at scale and their use becomes normalised in areas where it makes sense to deploy them.
- Inhouse legal teams – which have been steadily becoming familiar with genAI over several years already – move to become increasingly in tune with the approaches of the wider business, i.e. if genAI can help (at a level the business expects in terms of accuracy and reliability) then the legal team should both use the approach wherever possible (as it saves money, increases speed, and may reduce risk) internally and also demand it wherever it’s appropriate for external advisers to use it as well.
- Law firms, which have long been looking down the road of future client demand and have been making use (albeit sometimes limited) of genAI tools, continue to adapt and recalibrate – as they have always done when there is a shift in client sentiment. Law firms can change rapidly when they wish to, they simply don’t feel the need to do that….yet.
- This creates a positive feedback loop. More use of genAI helps the providers to improve their LLMs and the specific legal tech products based on them. Even higher accuracy and reliability encourages more inhouse teams to use them, expectations shift even more, so law firms recalibrate more. Meanwhile, lawyers who are at these changing firms leave to join inhouse teams and take with them this new approach – cementing the cultural shift in terms of tech and business model.
This process could take….well, a long time. But, it seems inevitable that it will happen. It’s just a question of this starting to move at pace in…..five more years, ten years, even longer?
Given how the legal market moves in lockstep on so many issues, it seems likely that once we get to, for example 20% of UK 100 firms operating a certain way, then nearly all the others will move much more quickly as they don’t want to be out of step.
In which case, it’s all about reaching a trigger point. 2% is clearly way too low. So, then the question is: how long before we get to something like 20%? And then we are back to how many years ahead we’re looking at to reach that?
OK, more on that another day.
LexisNexis also found that 41% of UK lawyers sampled were using genAI in some way. That is a high number and impressive. Meanwhile 71% said that the main reason to use it is to get work done faster.
So, overall, we are moving in the right direction. It’s just all about when we reach the watershed moment.