We were delighted to host leading figures from the legal profession at Argyll Central Court for a fascinating discussion on how AI is reshaping the industry. Chaired by Claer Barrett, Consumer Editor at the Financial Times, our distinguished panellists included:
- Joe Cohen, Legal Innovation Partner, EMEA, Harvey
- Rebecca Hume, Partner, Howard Kennedy
- Adam Curphey, Director of Innovation, Macfarlanes
- Ria Karnik, Managing Director, Major Lindsey & Africa
AI implementation is top of the agenda across the corporate world, and the legal profession is no different. As the expectations of lawyers and their clients change, all agreed that the profession cannot afford to stand still. From the fate of the billable hour to why lawyers have never been busier, here is what the panel had to say…
What are clients really paying for?
Clients pay for three things: expertise, judgement, and labour, and AI is shifting the focus away from the latter. Lengthy due diligence work by junior lawyers has always been a significant portion of charged time, but it is not what clients truly value.
Instead, clients want a trusted adviser who stands alongside them on difficult decisions, exercises judgement, negotiates for them, and navigates complex problems. In many cases, they’re happy for the ‘grunt work’ to be left to AI.
The end of the billable hour?
If clients value strategic counsel instead of minutes spent, where does that leave the billable hour? It’s a common headline, but will AI really upend the idea that ‘more time means more value’?
All agreed that the hourly model won’t end just yet, but it’s under strain as AI does the same work faster. Clients now expect their advisers to be using AI and therefore want to see savings on repetitive, transactional work.
But clients will pay for value, and the panellists agreed that fixed pricing is becoming ever more popular as a result. Some firms are even finding success by asking clients to assess what they think the work is worth.
Fixed pricing brings its own benefits. In M&A transactions, for example, speed can give clients earlier access to funds, lower costs, a better price, or avoided penalties. Firms can therefore use AI to add value through speed, knowing their fixed pricing model will secure revenue.
However, habits die hard, and the panellists expect resistance from a profession comfortable with the hourly model.
The next generation
When asked how firms have changed the competencies they look for at junior level, the panel’s assessment was “not yet”. However, interview tasks are increasingly being set for candidates to complete in their own time, with the assumption that they may use AI.
When it comes to training, AI creates both a hurdle and an opportunity. Because it strips away routine tasks, first and second years are taking on more substantive, higher-level work earlier. Judgement, commercial awareness, and client rapport are therefore being built up faster. In a market where these are valued, the panel believes that partners must bring their junior teams to client meetings to ensure this nous is built early – even if that means trainees billing fewer hours as a result of attending these often less formal meetings.
But these billable hours will be more than made up for by AI tools operating as teachers. An AI tool acting as a coach to trainees frees up valuable senior associate bandwidth that can then be billed out to clients.
Security concerns
The session also explored how client caution is growing. Several of the panellists’ clients have raised questions about how their information is used and objected to firms using it to train AI models – the sentiment being ‘it’s my information’. Some go further, asking firms not to use AI on their matters at all, despite often asking for cost savings only possible through AI use.
Privilege remains a serious concern, particularly for contentious work. Firms now include AI provisions in their engagement letters, but many still need to be cautious about what goes into open or public tools. One case was raised as a warning: prosecutors were able to read a client’s defence after it was put into a public tool.
More work, not less
Finally, the Jevons paradox is alive and well in the age of AI. Cheaper, faster analysis tends to increase total demand: reviewing thousands of contracts is now feasible, which surfaces more issues and generates more instructions. Passive AI tools have turned episodic client relationships into ones that are ‘always on’.
By the same token, litigants can also use AI to draft claims. Many are spurious, but all need to be read, and much of that is done by AI tools. As lawyers increasingly outsource work to ever more capable AI tools, the panellists agreed they have never been busier!
Many thanks to all our panellists for their insights, to Claer for her skills as host and to all those who attended. We hope you enjoyed the event!
