While many lawyers remain concerned that an AI-driven future will mean fewer billable hours, a new white paper shows that they are missing the opportunity to minimize lost time and find new ways to be productive while creating a fast avenue to return on investment for their AI tools
The legal industry stands at a pivotal crossroads as generative AI (GenAI) transforms traditional practices. And while many law firms are focused on experimenting with AI for simple manuals tasks like legal research and document drafting, they’re overlooking a more immediate concern: millions of dollars that are silently disappearing due to inefficiencies in how legal work is performed and billed.
This lost revenue represents low-hanging fruit for a quick and meaningful return on an investment (ROI) in GenAI technology.
To explore this further, a new white paper from the Thomson Reuters Institute, The AI-driven future of legal efficiency, written in collaboration with Jim Shoemaker, Chief Legal Operations Officer at Miles & Stockbridge, highlights the hidden costs of inefficiency in legal services. The paper also offers a view toward a potential framework for how GenAI can be tactically applied to minimize lost time and optimize revenue gains.
The hidden costs of legal inefficiencies
Billing inefficiencies represent an enormous hidden tax on law firms. Indeed, the average law firm partner writes down approximately 300 hours of their own time annually, according to the Thomson Reuters Institute’s research on billing practices. And this does not even include the billable time those same partners write down from other timekeepers as well.
These seemingly minor time increments accumulate across every timekeeper at a firm; and when multiplied by hourly rates, the financial impact is staggering. As the white paper discusses, a firm with 100 partners could quickly find itself losing out on millions of dollars of revenue just from partners writing down their own time on routine tasks.
A firm with 100 partners could quickly find itself losing out on millions of dollars of revenue just from partners writing down their own time on routine tasks.
The white paper refers to hours that are written down as unbilled time, and much of this isn’t inherently non-billable. Rather, partners often decide not to bill clients because the work took too long or became too expensive. These inflated timeframes frequently stem from inefficiencies that AI could help reduce or eliminate.
Top areas of revenue leakage
The paper identifies five critical areas in which billable hours are consistently lost:
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- Getting up to speed on new areas of law
- Correcting or revising associate work
- Legal research
- Drafting briefs and litigation documents
- Replacing another attorney on a matter
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These aren’t merely operational issues — they directly impact profitability and client value. As the paper points out, every unbilled hour represents lost revenue that AI could help recapture while simultaneously allowing lawyers the time to deliver better, faster service to clients.
A framework for strategic AI adoption
The paper also introduces a framework that law firms can utilize when developing their own strategic framework for AI adoption — and that begins with a comprehensive revenue-leakage analysis. The development of such a structured framework can create tactical alignment of AI solutions with areas where these solutions will have the greatest and most immediate positive financial impact.
However, it is also critical that any such framework keep clients (and the attorneys and other legal staff professionals who serve them) at the center of the process. To remain client-centric, AI should enhance legal service quality, responsiveness, and strategic insight in three key ways: i) allowing for the delivery of faster, more informed legal insights; ii) ensuring seamless matter transitions; and iii) focusing attorney time on high-value advisory work.
By framing AI adoption around client value rather than just cost reduction, firms can position themselves as forward-thinking advisors rather than mere service providers.
As the paper makes clear, the legal industry has lost millions annually to inefficiencies for years. What’s different now is the availability of tools to address these challenges directly. The solution isn’t simply more technology; however, it’s a thoughtful application of technology that keeps both lawyers and clients at the center.
The opinions and conclusions contained in this blog post and in the referenced white paper do not necessarily reflect the views of Miles & Stockbridge.
You can download a copy of the Thomson Reuters Institute’s new white paper, “The AI-driven future of legal efficiency,” by filling out the form below:
