The End of Billable Hours? Law Firms Face a 50% Reduction in Just 4 Years
The recent valuation of $2B for AI startup Harvey is one of many indications that the legal profession is squarely "in the crucible" of GenAI disruption
Disruption is coming quickly to the legal industry because of GenAI.
Like dentists and plumbers, lawyers provide a necessary and important service, but after a project is completed, the customer doesn't need to purchase services.
With its ability to generate value from unstructured data (Word, PDF, etc.) and the vast corpus of law, case law, filings, briefs, and contracts, all with well-defined terms, use cases in law are ideal for GenAI. Powerful use cases abound from enhanced discovery, to the creation of draft contracts based on previous versions, to analyzing and ranking risks of existing contracts, to summarizing roles and obligations, to analyzing differences among hundreds of SaaS contracts, and more.
[Image created with ChatGPT. Prompt: create a picture of a robot working in a law library working on a contract in front of a computer. The atmosphere is positive and professional.]
Companies and individuals are already saving hundreds of hours with GenAI DIY.
Using GenAI, many legal projects require significantly less time. If you are not seeing a reduction in time and cost for the same legal project before and after ChatGPT 3.5 was introduced, then you are leaving real money on the table.
Yes, "human in the loop" is a necessity (don't be like the lawyer who submitted a GenAI-generated brief to the court without reviewing it and was fined $5,000 because the AI generated fake citations).
We’ve spoken with many law firms, and the responses vary widely, in part because law firms never viewed or invested in technology as a competitive differentiator.
New demand for additional legal work related to AI IP, data use etc., will be created but this won’t be enough to offset the trend.
We estimate that 50% of billable hours will go away. Law firms need to learn and adjust more quickly. The change tsunami is coming.
Which robots do you carry with you?
I currently carry six (ChatGPT, Co-Pilot, Gemini, Perplexity, Claude, and Pi). I have them on my home/first screen on my iPhone and on my Chrome browser tab.
What is your configuration?
SEO Bloodbath
We continue to have many conversations with business leaders about the upcoming SEO Bloodbath. I ask the robots which airline is “best” in the US and got different answers.
We had two good, recent discussions on this at our weekly Learning Lab. Here are the recordings
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Notable upcoming events
Weekly GenAI Learning Lab (Zoom call) 7p ET/ 4 PT every Monday. The Showcase for tomorrow Monday is on AI Agents. Signup here.
AI Woodstock Palo Alto this Tuesday, Jun 25. This is an informal networking event regarding enterprise GenAI. Meet practitioners, entrepreneurs, investors, engineers, data scientists. Tue June 25. 5:30p-7p. Meet at Terun, 448 S California Ave, Palo Alto.
Oct 7-8 (2 days. in-person, paid): GAI Insights’ Generative AI World 2024 Conference in Boston, MA. We have a great set of confirmed speakers already. UBS and Quantum Gears are our Gold sponsors, and Goodwin is our Legal Sponsor.
“To govern [lead] was to serve, not to rule. - Seneca
Onward,
Paul
Are there recordings available of GenAI Labs sessions?
Big law has issues.