Let me tell you a story about the AI-driven evolution of pricing in the legal market. It might not happen for many years. It might happen much sooner. But when it does, I expect it'll look like this.
Excellent and thought-provoking article Jordan! A couple of comments:
1. The "lawyers love it (hourly billing)" point. It is easy but I think more lawyers that you might think despise it, probably for reasons related to well-being. A primary reason that I left private practice years ago was that I found hourly billing (and that my value to the firm was based on the number of hours I recorded each day) very soul destroying. No one likes to be fully engaged at the office for 12 hours a day and record only 5 billable hours. That shame can lead to the temptation to "cheat". Hourly billing may have contributed to the large migration of lawyers from private practice to working inhouse in industry or government. As Michael points out, this group of practitioners are very aware of its drawbacks!
2. Your point that very few firms have adopted alternative billing practices. There are actually quite a few bright spots out there now including some exciting innovators right here in BC including Alinea Legal Coaching (packaged services), Digby Leigh & Co., Butterfly Law and the Everyone Legal Clinic. Altfee is a local example of a firm offering a platform to assist law firms to design and use non-hourly billing approaches. I don't expect this sort of innovation to emanate from the big firms. If the picture you paint of the future is accurate then it may well be the solo, small and medium-sized firms that survive and prosper. On the other hand there is now a worldwide directory of law firms of all sizes offering alternative fees in a variety of practice areas : https://www.altfeeco.com/afa-law-firm-directory
Jordan -- Excellent posting, although also remember, we general counsel and other in-house lawyers have long expected this change. Keep in mind ACC's Value Challenge, starting over 15 years ago, and also this posting of mine: https://sites.google.com/view/michael-roster/facing-up-to-the-challenge?authuser=0. A related challenge is how those of us who are now teaching at law schools teach the highest and best use of AI while also trying to grade our students on things such as contract drafting and analysis, which I've been teaching for over ten years. I ran one or two of my regular assignments through both Chat GPT and Google Bard and was blown away with the quality of the contracts they produced on the very first try.
Excellent and thought-provoking article Jordan! A couple of comments:
1. The "lawyers love it (hourly billing)" point. It is easy but I think more lawyers that you might think despise it, probably for reasons related to well-being. A primary reason that I left private practice years ago was that I found hourly billing (and that my value to the firm was based on the number of hours I recorded each day) very soul destroying. No one likes to be fully engaged at the office for 12 hours a day and record only 5 billable hours. That shame can lead to the temptation to "cheat". Hourly billing may have contributed to the large migration of lawyers from private practice to working inhouse in industry or government. As Michael points out, this group of practitioners are very aware of its drawbacks!
2. Your point that very few firms have adopted alternative billing practices. There are actually quite a few bright spots out there now including some exciting innovators right here in BC including Alinea Legal Coaching (packaged services), Digby Leigh & Co., Butterfly Law and the Everyone Legal Clinic. Altfee is a local example of a firm offering a platform to assist law firms to design and use non-hourly billing approaches. I don't expect this sort of innovation to emanate from the big firms. If the picture you paint of the future is accurate then it may well be the solo, small and medium-sized firms that survive and prosper. On the other hand there is now a worldwide directory of law firms of all sizes offering alternative fees in a variety of practice areas : https://www.altfeeco.com/afa-law-firm-directory
Keep up the great work Jordan.
Kari
Jordan -- Excellent posting, although also remember, we general counsel and other in-house lawyers have long expected this change. Keep in mind ACC's Value Challenge, starting over 15 years ago, and also this posting of mine: https://sites.google.com/view/michael-roster/facing-up-to-the-challenge?authuser=0. A related challenge is how those of us who are now teaching at law schools teach the highest and best use of AI while also trying to grade our students on things such as contract drafting and analysis, which I've been teaching for over ten years. I ran one or two of my regular assignments through both Chat GPT and Google Bard and was blown away with the quality of the contracts they produced on the very first try.