alt Hacker NewsAs A.I. makes law firms more efficient, clients ask: 'Where's my discount?'
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I feel this is the case for a lot of industries (and even a lot of productivity-enhancers, beyond AI).
I remember a much slower change where software slowly ate away the work of property managers. Especially convenient was the ability for the tenant to perform the 6-monthly inspection remotely by uploading a half-dozen photos per room, taking just 15 minutes or so rather than waiting around for several hours for a physical meet up with the property manager. Software also allowed rent payments to be easily automated, collated and monitored.
But I don't think the number of property managers decreased, nor the price that landlords paid for their services.
Sounds like a case of "Where Are the Customers' Yachts?" again. As brought up by an author called Fred Schwed regarding Wall Street investment.
Spoke with a banker at a well known investment bank in NYC last week. They told the law firm they want the fees cut in half or they walk. This is to a top 5 law firm. Lawyers are trying to charge the same prices, when both sides know they are working half the hours. This is even at the most premium top end, where an engagement bill can run up to 30 million.
The issue is that communications with A.I. are not privileged like client-attorney. There was some judge that made that ruling.
Feels like a conflict of interests to me, I'd guess friends, neighbors, children and nieces of that judge enjoying their livelihood by charging for legal services. While legal services are now available under substantially lower rates and with a lot fewer conflicts of interests from A.I. providers...
It's even worse with some physicians. When I got an MRI a year or two ago, getting an AI diagnosis cost extra. I am very positive about AI, but I can understand why people would be hesitant to pay extra when they hear about false positives and the unreliability of AI.
Outside of court proceedings, a significant proportion of what law offices do is already extremely streamlined. Stuff like wills, deeds, incorporation paperwork, is all template-based and any remaining work is done by paralegals, then billed at outrageous rates. So I'm not actually sure if AI makes it a whole lot cheaper. Maybe it makes it harder to pretend.
But there's also a good reason why lawyers can keep charging these fees: because they have a say on who can practice the profession. Unlike software engineers and like doctors, they're in charge and will not allow autonomous systems to represent you or otherwise "practice law". That'd be suicide.
Also, for many services, downward price pressure already exists to some extent, in that there are various "low-stakes" virtual legal firms licensed in multiple states that provide forms you can fill and then file for $50 a pop instead of $500 a pop. But most consumers still prefer to visit a local law office. I'm not sure this will change with AI. I know quite a few people who are keen to self-diagnose using Google or ChatGPT, but I don't know as many inclined to vibecode their articles of incorporation.
It's really one of these white-collar professions that I think is quite secure. Software engineers are hosed to a greater extent, having enthusiastically engineered their own personal hell.
My partner spent many years in big law and now sits across the table on the client side. The billable hour has been problematic for much longer than AI has been in the picture, but what many people forget (including sometimes the companies paying the bill) is that you often aren't really paying for the hours, you're paying the structural tax that has been established by the system. Hours imply work product, but sometimes the reason firms are paying outside counsel _at all_ isn't because their in-house team couldn't do it, it's because the market/courts have told them they need the liability transference granted by a signed piece of paper.
That said, the rest of the article is on point. AI billing analysis software + internal knowledge of how the sausage gets made has shaved literal millions off bills at this point. I wouldn't expect them to lose money in an absolute sense though. More like a balloon you squeeze from one end.
One thing I came here to say, but turn out not to be the case, was the large jump in associates salaries as an interesting possible driver. I found a handy tracking number that does inflation adjustment. Turns out when you index for inflation, the associate pay scales are more or less flat.
I know almost nothing about law firms. But for some other industry if you have 1000 competitors making similar products then companies will compete on price. If you reduce your prices then you will probably get more customers.
If you want to buy a new PC would you rather just have IBM making PCs and setting the price to whatever they want or a thousand different clone companies all competing on price, features, support, etc?
So some new law firm may want to disrupt the industry with a new model
Law firms are going to be rolled over by AI. The inefficient law firms will be replaced. Like Expedia, etc. did to travel agents.
Can’t recall where I read it, but there was an interesting post about how AI was being received by the legal industry. There were largely two camps, those who got it and knew they must adopt and adapt, and those who got it but were like “why should I adopt something that directly reduces my billable hours?” It seemed pretty clear that the latter camp was not going to exist much longer. I guess this is playing out as expected.
So… if AI is reducing time taken for billable actions, then that reduces the cost no? Unless it’s not actually reducing the time spent on said actions.
I think that question is very similar to why, if AI is making software developers so much more productive, those developers are not getting paid substantially more, or having to work fewer hours.
I’m just waiting for the AI judgments, followed by the flash trials, followed by the flash litigation DDOS attacks.
AI is just a tool like everything else. Are you also going to ask me for a discount because I used a powered screw driver?
The whole law should have been automated and formally verified decades ago.
One thing you get from legal council is they'll be ready to defend and contracts or agreements they've made for you. Might be hard to find defense or offense on AI slop contracts. We've seen how AI does code, imagine that inconsistency in legal docs.
That's basically like devs being 10x with AI - they ain't getting a raise for that..
Lawyers and politicians are the first things that ought to be replaced by AI, honestly.
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Well we’ve spent over a trillion on infrastructure and we’re only just getting started so good luck getting your fucking discount
My experience with lawyers is that if you need a legal document, they often have templates ready to go and will take 10 seconds to find & replace your company name into the document. I know this because they often don’t proofread it afterwards. They then charge you $1000 for that 10 seconds of work. Given that I have felt ripped off by many lawyers, I’m totally fine with that industry getting disrupted.