While the technology behind the latest innovations in legal service delivery may be new, the concerns about the potential impact on firm profits are not
But I get paid by the hour — has become (yet again) one of the most common retorts from lawyers when presented with arguments in favor of the advantages generative artificial intelligence (GenAI) possess for lawyer efficiency. And it’s a fair point: Why would a profession dominated by hourly billing arrangements view greater efficiency as a good thing? Won’t greater efficiency mean fewer hours and therefore less money?
Not if Mark Twain was right when he said, “History doesn’t repeat itself, but it often rhymes.” The technology driving the concerns on the part of lawyers is new, even as the concerns themselves are not.
Artificial intelligence (AI) has been present in various parts of lawyers’ workstreams for well over a decade, seamlessly integrated into everyday tools that most lawyers use on a daily basis. From online research tools to word processing, from document management to something as simple as searching an email inbox, AI plays a role and has for years. At the same time, as the Thomson Reuters Institute’s 2024 Report on the State of the US Legal Market makes clear, we have not witnessed a decline in firm profits as AI has become increasingly pervasive. In fact, quite the opposite is true.
Improvements in legal technology tend to have greater impact on lower-value tasks. Clearly, it is far more efficient to run a search across an email inbox and have the most relevant results rise to the top rather than to page through boxes of memos related to a given file to find a particular piece of paper. It is equally clear that this increase in efficiency itself does not negatively impact a firm’s ability to turn a profit.
GenAI’s impact on billable work
“But that example doesn’t speak to a task that was ever really billable,” some naysayers may ask. “What about AI taking over a task I can bill a client for today?” Drawing from my own past life as a practicing lawyer, let’s examine just such a task — a cite check.
As a baby lawyer, I was often required to cite check briefs in books as opposed to using electronic tools. That meant that cite-checking a 10-page brief could involve several hours of work — every minute of it potentially billable time since it was directly related to client work. For more than 15 years now, though, there have been plugins for word processing programs that will complete most of the work of a cite check in seconds rather than hours. Vetting what the automated tool provides as a result has turned the process of cite checking into maybe a one-quarter of an hour investment of time.
Clearly, this would have a measurable negative impact on my productivity as a lawyer, right?
In reality, likely not. Lawyers are incredibly adept at finding ways to fill their time, and generally what they find as a replacement often is of higher value than what was replaced. Hours that had been spent cite-checking can now be spent on higher value work.
The link between innovation and profitability
A quick examination of the past 40 years or so provides myriad examples showing that new innovation doesn’t necessarily stifle law firm profitability. The early 1980s saw the genesis of electronic legal research, starting the move of legal research away from the sole realm of bound books, a shift that continues to this day. The rise of the internet also created new opportunities for client communication, minimizing time spent drafting correspondence and curtailing revenue streams for things like postage or photocopies (or, perhaps, tuna sandwiches). Then, of course, the now-universal use of laptop computers created an incalculable gain in efficiency for lawyers.
Not surprisingly, some of these technological advances rang the same alarm bells that GenAI is ringing today, while others did not. However, all these innovations increased the efficiency with which lawyers can complete their work — and none were law firm profitability killers.
In fact, it would be difficult to argue that any of these advances did anything other than ultimately improve law firm profits. The data on the growth trend in law firm profits is clear.
And that brings us back to the objections about GenAI’s potential negative impacts. The way law firms do business, from how they handle matters, to how they price and bill work, may change — but that’s not necessarily a bad thing.
As those changes become reality, however, it is important to bear in mind that just as the objections to the current leaps in technology rhyme with those of the past, so too will the likely outcomes. Changes will be required, but the end results, for those law firms willing to roll with the changes and adapt, will likely be a big net positive in the long run.
