Artificial Intelligence
Welcome to this month's article of Let’s Be Frank, a monthly newsletter series hosted on LinkedIn and authored by our founder Digby. If you are interested in following along pop over to the Let’s Be Frank LinkedIn page here and hit the subscribe button to have these articles sent straight to your inbox.
As is the case in a lot of life, we tend to be more reactionary rather than making proactive change, but the catalyst for change has arrived! Artificial intelligence (AI) has become a huge topic for lawyers, as I saw at the recent Ontario Bar Association TECHxpo conference I spoke at in June. When the wrap up speech occurred and the topic was AI, the interest from the attendees was huge. No one was going to miss that presentation by Al Hounsell.
The buzz is hard to ignore, so I thought it was time to dig deeper.
How will AI shake up the legal industry? What will the impact of AI be on how law firms do business?
I am by no means an expert on this subject, so I asked someone who is - John Stroud (CEO at AI Guides). John says that AI “is poised to supercharge the productivity of white-collar workers by as much as 30%. Research by Goldman Sachs shows that law firms are among the most vulnerable to these changes. Quite simply, AI in law is happening. It will either be done to you, or by you.”
So, how will these changes impact law firms? John thinks that while “it is always risky to predict with confidence what impact these changes will bring, the following outcomes do seem likely: efficiency gains, downward pressure on fees, and redefining the pyramid.”
For me, what is noteworthy, is that AI will impact law firms by making them more efficient in getting projects done. AI’s ability to create efficiencies, accelerate processes that save time and resources, automate, find trends, etc. will have an inevitable impact on those billing by the hour.
Law firms will need to adapt to survive and prosper. The light bulb is starting to go on for the masses. If we are aggressively moving to machine learning and more efficiency, how will this affect the hourly billing model? Why would I be more efficient and bill less for the same work? Maybe I will have to start thinking about still being paid the same for the project as I used to, when I billed by the hour?
As you know, I believed that the hourly billing model was at risk because lawyers would eventually see that connecting what they got paid to merely working more hours was not a way to live a rich and varied life. This is still true and was the major driver behind why I moved Digby Leigh & Co. away from billing by the hour. However, as I explored the legal industry, I found that the pain of change often outweighed the perceived benefit of the better pricing model.
AI will motivate change - and I think that change will be the shift away from hourly billing. This is an opportunity right in front of us that can’t be ignored.
At AltFee we have been riding the crest of the wave, waiting for when the message of finding a healthier way to practice would be the wave to catch, but now we are also seeing a Jaws like wave on the horizon, that is going to propel the legal industry crashing forward.
Until next time,
