AI to Blindside Law Firms: A License to Bill More Hours?

AI is about to blindside some law firms. It’s a license to bill more hours.

The 1 in 3 law firms going all in (discussed here last week) sense this — explaining why they are all in. They know clients want new and better ideas for the new and bigger risks they face.

BTI results from a brand new survey of more than 350 corporate counsel reveals client expectations about AI’s impact on fees and hours. The current state of client expectations looks like this:

• 23.6% see fewer hours billed
• 76.4% expect more hours to be billed

8 Pillars Behind Corporate Counsel Reasoning:

• More Time for Higher Value Work: Clients expect more sophisticated legal analysis as time for low-value hours is shifted to higher-value work.
• Better Ideas will grow out of the more sophisticated legal analysis adding more time to work through with corporate counsel. This drives better engagement as well as outcomes.
• Overestimated AI Impact: The reduced workload AI will create may be overblown while the increase in complexity is here now.
• Larger Stakes: Matters are getting bigger as measured in dollars at stake.
• Sharply Increased Complexity: Legal issues are more complex now than ever before.
• Sustained Complexity: It is here to stay and will get evermore complex.
• Higher Overhead: Law firm overhead continues to increase, further influencing billable hours.
• Intense Validation: AI requires more intense review and validation from high-billing attorneys.

Clients are looking for tools to help inform their thinking — not cut and dried answers to legal problems — and expect their outside counsel to do the same.

The Shift to a Higher Value Era

AI could easily augment instead of replace. The law firms going all in are starting with efficiency — but outside counsel are quietly experimenting with developing new ideas and alternative approaches — as are clients. To be clear — no one is dropping client names or confidential information — but the anonymous use drives a whole body of alternative thinking. All of which boost value — just as the legal issues clients face are growing in complexity and risk. This is perfect timing.

Clients are living this shift — which is why most clients don’t expect AI to drive hours billed down. They would much rather have problem-solving ideas for the new complexity. This saves more money than any reduction in hours — and makes clients look good as they navigate their world — which is priceless and can’t be measured in billable hours.