After Hours 1: The legal profession's new value proposition
The days of selling legal tasks by the hour are ending. Lawyers' future value lies in safeguarding clients' legal journeys by overcoming the most challenging obstacles on the way. Part 1 of 2.
Here is the traditional lawyer business model: Clients pay lawyers for the time lawyers spend applying their skills and expertise to carry out legal tasks, create legal instruments, and generate legal results, in order to enable client outcomes.
Here is the post-AI lawyer business model: Clients pay lawyers for the time lawyers spend applying their skills and expertise to carry out legal tasks, create legal instruments, and generate legal results, in order to enable client outcomes.
As you can see, the lawyer’s goal remains the same; but the lawyer’s activities, and the model that supports them, are going to change radically. Whether and how well lawyers manage this transition depends on how quickly and effectively they understand this change, absorb it, and incorporate it into their legal business platforms.
In this two-part series, I want to explore what that process could look like: first, by examining the future purpose and function of private-practice lawyers, and then by considering the kind of business model required to support and deploy that role sustainably and competitively.
For as long as any of us can remember, the legal market has rested on two assumptions: People lack the capacity to achieve legal outcomes on their own, and lawyers are the only reliable source of that capacity. If you control that single source and leverage its work by the hour, then you can build a very profitable enterprise. And lawyers sure have.
Generative AI is in the process of blowing up those assumptions. By putting powerful legal tools directly in clients’ hands, Gen AI reduces or extinguishes external demand for many legal activities. And by offering the market an affordable alternative source of legal intelligence, Gen AI removes the exclusivity lawyers have always maintained over the supply of legal solutions while increasing legal productivity a hundredfold.
As a result, legal work is dividing into two spheres, the first larger than the second: what Gen AI can satisfactorily address, and what it can’t.
Sphere 1: Legal Production. This is all the specialized intellectual work involved in generating legal solutions: researching, issue-spotting, summarizing, synthesizing, drafting, revising, reasoning, and analyzing. This is the bulk of lawyers’ traditional activity and billed hours. In future, it will be done faster, cheaper, and increasingly better with machines — either by clients themselves, or embedded in systems and platforms that reduce the need for lawyer involvement.
Sphere 2: Legal Judgment. This is higher-value work defined by the unpredictability, complexity, and impact of its challenges. In this sphere, you’ll find hard-decision advice, guidance under uncertainty, systematic dispute avoidance, strategic counsel, critical advocacy, risk prioritization, and high-stakes accountability. It’s likely (but far from certain) that this work will remain outside the reach of Gen AI. This is the sphere that holds the potential to support a future legal profession.
These spheres are meant to be analytical categories, rather than hermetically sealed silos. In the real world, client needs naturally will be met with a blend of both types, e.g., legal judgment reinforced by machine-driven production. The point is that in future, lawyers will rarely be undertaking Sphere 1 activities themselves.
The stratification of legal work into these two spheres has been noted by a number of legal commentators recently, including Brandi Pack, Adan Ordońez, and Christina Blacklaws. Nilay Patel touched on it in his closing plenary at ABA TECHSHOW last month. A useful framework of “industrial” vs. “judgment” legal work is provided by Eric Dodson Greenberg — but he worries that even some legal judgment work could be pilfered by AI (a prospect I’ve written about, and one that could reduce the size of the second sphere even further).
There’s a conversation to be had about whether Gen AI will shrink the sphere of “judgment work” so much that virtually everything people once obtained from lawyers will instead be provided by machines. I’m not interested in having that conversation today. For now, I’ll presume that people will still ask lawyers to help them with their most critical, complex, and challenging situations — the Sphere 2 requests.
But lawyers have to clearly understand how their value proposition is going to change as a result. They have to recognize that the post-AI legal market will want something different from them than they’re accustomed to providing.
The essence of a lawyer’s job, it seems to me, has always been to guide clients along the journey to their legal goal. Clients come to lawyers at some unsatisfactory Point A and want to reach some better Point B. But they often don’t fully understand where they are now, they don’t know exactly where they need to go, and they’re not sure how to get there.
The road from Point A to Point B has been the lawyer’s terrain. The lawyer figured out the best route, gave the client a rough map of the journey, told the client to follow closely behind, and proceeded to lay every brick on that road (in six-minute increments) as they made their way slowly towards the destination.
Now, thanks to Generative AI, clients have their own car, they can see their destination more clearly, they can draw their own maps, and most importantly, they can build much of the road themselves and travel a good distance on their own. Many short legal trips won’t require a lawyer’s involvement at all.
Lawyers’ business model is painfully simple: They charge their clients for every activity they perform that enables the client’s outcome, mapping out and carrying out every step of the client’s journey. But AI will mechanize most of those activities and automate most of those steps. Lawyers will not be competitive for this “Sphere 1” work in future. And that’s a serious problem, because a lot of lawyer work is found in Sphere 1. Many law firms are kept afloat by this work. If it disappears, so will they.
But not every legal journey is so simple or safe that the client can go it alone. Many times, Point B is more like Point F or Point R: a long and tortuous distance away. Many AI-generated maps will suggest a clear and direct route that bears little resemblance to the messy tangles of reality. On even moderately complex legal journeys, the unwelcome and the unexpected are always lurking. Something arises that was nowhere on the map, and until it gets resolved, the client can’t move any further towards their destination.
Here’s the thing about lawyers: They know the legal road. They can see farther down it than the client or their AI can. From training and experience, they know where the potholes lie, where the forks appear, and where the bridges over gaps and valleys are damaged or gone altogether. They’re hardly omniscient, but they’re better able than anyone else to recognize where friction, opposition, and risk are likely to emerge.
Just as importantly, lawyers have the expertise, skills, and composure to address serious problems and overcome difficult obstructions when they appear. This is Sphere 2 work: timely and essential interventions that help the client reach their destination.
Some legal journeys will no longer require lawyers, and as AI becomes more powerful, that number will grow. But many will still require a lawyer’s steady guidance, while others will call for expert intervention at decisive moments when the path forward is threatened by uncertainty, conflict, or risk.
In this way, lawyers will be in the business of safeguarding the client’s legal journey. Their legally informed judgment, guidance, and representation — delivered at critical junctures through advocacy, advice, and accompaniment — will enable a complex, high-stakes, or mission-critical journey to reach its destination safely and successfully.
The post-AI lawyer will be an indispensable presence in the client’s most important legal journeys, helping to ensure that whenever the road becomes uncertain, contested, or dangerous, the client can keep going.
This might sound like an awfully narrow foundation upon which to build a legal business. I don't think it is. In an increasingly complex and chaotic world, the degree of uncertainty and unknowability will keep climbing; the instances of important and even existential decisions will multiply; the frequency with which new risks emerge and take on unfamiliar forms will only grow.
Here are just three of the countless examples of make-or-break moments in serious matters that require the best judgment and advice that lawyers can give:
A company is preparing a hostile takeover; the lawyer sees the risks that could wreck the deal and tells the client whether to proceed, renegotiate, or walk away.
A small business faces a ruinous lawsuit; the lawyer decides whether to settle or fight, then drives the strategy that gives the business its best chance to survive.
A young family is on the verge of eviction; the lawyer identifies the one viable route to keeping them housed and steps forward to secure it.
A business that undertakes this kind of work is no longer a volume-based legal task performance firm. It’s a business that safeguards the client’s legal journey by deploying legal judgment where and when it matters most. It’s not a traditional law firm selling task performance; it’s a legal enterprise built to guide high-stakes decisions, manage serious risk, and intervene at decisive moments.
And it does not sell its services by the hour. You can’t use a Sphere 1 business model to meet Sphere 2 needs. The best judgment, the timeliest intervention, the right call — these essential contributions to the success of the client’s journey have never been adequately measured in hours.
This kind of entity will require a completely different enterprise vision, business model, talent framework, and productivity infrastructure than what traditional law firms offered. In Part 2 of this series, I’ll explore what that new legal enterprise would actually look like.
I agree but I am left with more questions!
Is Sphere 1 addressing the access to justice imbalance? Will it also act as the Jevon's paradox by increasing access, leading to increases demand which could result in more Sphere 2 matters for firms and a great relationship foundation.....but most importantly how are the next generation of lawyers going to be trained, trusted, instilled with wisdom to be able to assist in Sphere 2? I hope Part 2 has these insights!
Precisely what #DeliveredValue is all about — and that’s precisely what my team insisted upon and paid outside counsel for when I was a GC. What was truly amazing — no disconcerting — is that despite demonstrated effectiveness and results, true delivered value to the customer and increased profitability for those firms that delivered, the model, while praised and celebrated, never took hold more broadly. I blame the #LawLand guild member buyers for that disconnect — and indeed have argued that the failure to demand delivered value was tantamount to a breach of the in-house lawyer’s fiduciary responsibility to their customer. When the needs and the protection of the profession outweigh the needs of the customers, the profession mutates from one designed to protect customers to one dedicated to the preservation and protection of the prerogative, power and profitability of the guild-based intermediary. At the end of the day, like all intermediaries, they become a citadel for income redistribution — formed in the name of efficiency and protection of the customer, but that becomes a mere fig leaf to obscure the mutant and malignant tumor.
What you are arguing for and predicting is precisely what we deployed effectively. The tragedy of the past several decades when this model was freely available — and free — is that broad based-acceptance could have driven mutually advantageous results for firms and customers, but the customers failed to demand Delivered Value and the firms resisted this challenge to the prevailing business model tooth and nail. Like a bizarre combination of Diogenes and Sisyphus, I long argued that it was time for customers to vote with their fees and to demand delivered value. When they did this, the firms would be forced to change and deliver that value. The AI revolution simply provides the tools by which the customer can bypass the lawyer and the law firm for the vast majority of their legal needs — if only my team, and the very few GC fellow travelers focused on actual customer needs, had access to these tools years ago — the legal industry landscape would have been much different, much sooner. We didn’t and were patted on the head, compliments, but considered to be lunatics on the radical fringe.
But as is so often the case with your masterful delineation of the problem, you are once again correct — those needs where a lawyer’s judgment is actually necessary in the operation of the service delivery platform, as opposed to the design of that platform, is where the true delineation of legal needs must be discerned. What I find interesting is that most of the legal industry cognoscenti focus on what this means for lawyers and law firm — on the lawyer as the customer for AI enabled or enhanced services. It is not focused on what truly customer focused legal service delivery means and how the realization of those needs is what actually matters — to the customer — and therefore what the customer is willing to pay for.
In a world where 85% of legal needs are unmet because the prevailing delivery system is simply too expensive, that delivery system will be bypassed by those with the legal needs to be met and available tools to now meet those needs. For that latent unmet demand, this is not UPL — it is using a delivery platform that is pretty effective, recognizing that while it might be wrong from time to time, it is far better than simply going naked all the time.