Legal Team
Generative AI is set to disrupt legal pricing models, creating tension between in-house teams and law firms. While many in-house teams foresee AI-driven cost savings, most law firms are hesitant to adjust their billing practices. Experts suggest that the evolving role of AI may reshape the legal workforce, requiring firms to rethink their pricing structures and talent strategies.
Source: LexisNexis
As generative AI begins to shape the legal industry, its impact on pricing models is becoming a central topic of debate. A recent survey highlights a growing divide between in-house legal teams and law firms. While 52% of in-house teams expect reduced legal bills due to AI-driven efficiencies, only 40% of law firms share the same view. The differing expectations signal a potential shift in the balance of pricing power between clients and their legal service providers.
The debate extends beyond just pricing reductions. An even greater disparity exists when considering how AI will reshape billing practices. While 62% of in-house teams believe AI should prompt changes in billing models, only 18% of law firms agree. This divergence suggests that many firms may not be ready to pass on the potential savings AI could provide. The current billing models, focused on hours worked rather than outcomes, could be challenged as AI enables faster and more efficient legal work.
Prominent voices in the industry, such as Quinn Emanuel, Macfarlanes, and LexisNexis, foresee AI reshaping the legal landscape not just in terms of pricing but in how law firms operate. Quinn Emanuel predicts a slimmer, more AI-driven law firm structure with fewer junior lawyers handling routine tasks. Meanwhile, Macfarlanes envisions AI as a tool to elevate lawyer expertise, rather than replace human intelligence. The broader legal industry is still grappling with these changes, but one thing is certain: the fusion of AI and legal work will demand new approaches to pricing, talent management, and value creation.
Read more: LexisNexis