The Shape of Things to Come (Our Fearless Prediction)

In an upcoming article, we consider how much downward pressure GenAI will exert on the use of billable hours as a proxy for value. If technology can handle adeptly the more mundane tasks in a lawyer’s day, why will clients be inclined to pay humans to take more time to do the same work? And if clients refuse to pay for humans to handle routine work, what will that mean to a law firm’s bottom line?

We’ve heard all of the fears about GenAI’s use in the practice of law.  Some of those fears are important to resolve—such as confidentiality, bias, reliability—and some are less so, as one of us has pointed out. Sure, even the best technology is error-prone, but so are humans.[1] And computers, unlike humans, don’t get bored, tired, or inconsistent when performing repetitive tasks.

Imagine a world in which a law firm has figured out a way to use GenAI to do simple tasks quickly and well. If ChatGPT can pass a bar exam, then any well-designed GenAI program can prepare a credible first draft of a pro hac vice motion; it can analyze a contract; it can draft a brief.[2] Even way back in 2018, LawGeex demonstrated the superior work of  its technology as compared to humans, in issue-spotting clauses in NDAs.  And GenAI keeps improving at a breathtaking pace. So consider different strategic paths taken by two hypothetical firms, imaginatively named Law Firm A and Law Firm B. 

Law Firm A has decided that there are certain tasks that its lawyers do that can be given to GenAI first, with the lawyers then reviewing the resulting draft. The good news is that these lawyers can now be deployed to do tasks that GenAI can’t do—their time has been freed up for that more interesting work. The bad news is that the work that used to be billed out by the hour is completed in seconds through automation. Isn’t that bad for the law firm?

We don’t think so. Now Law Firm A has two types of income streams: a commoditized income stream generated first by GenAI and then revised by humans, and a more bespoke income stream for things that only lawyers can do. (In our article, we suggest that the bespoke work, if it’s billed by the hour, can now command a higher billable rate than before, because experts are focusing on the tricky, novel issues.) With its freed-up time, in addition to working on bespoke matters, Law Firm A can find ways to bring junior lawyers up to speed the way that both of us were trained: by watching and learning from more senior lawyers in real time. Its commoditized work will likely be monitored by senior associates, with bespoke work done by both senior associates and by partners. In a world in which clients don’t want to pay for first- and second-year lawyers to be trained “on their dime,” the firm can now afford to devote more in-depth mentoring to keep itself sustainable.

What about Law Firm B, which eschews GenAI and insists that all but the most mundane work has to be done by humans, for quality control reasons? We think that Law Firm B runs the risk of becoming obsolete. When a Law Firm B client can do a first draft of something internally with or without the assistance of GenAI, why would it want to pay for Law Firm B’s junior associates to take time doing the same first draft? Law Firm B may find itself losing clients to Law Firm A, which is handling client matters more efficiently. It may also find itself losing associates to Law Firm A.

Our article contemplates a world in which the pyramid model, built on the premise of many junior lawyers doing billable work, may disappear in light of a more efficiently shaped economic model. Maybe that model is more of a cylinder, streamlined to use fewer lawyers in total because some of its junior ranks have been replaced with GenAI. Maybe the model morphs into a diamond, with more senior associates and fewer partners and junior associates. Or maybe the pyramid becomes a starfish, with a core of central support and different “arms” using GenAI either more or less, depending on the type of practice. There are many possible shapes, but we believe that the pyramid, as we have known it for decades, will be the least sustainable for most practices. Ultimately, law firms will have to grapple with the idea that the billable hour is not value but just a mere proxy for value. We believe that the firms that find a better way to capture the value-add of humans to drafts initially produced by GenAI will be the firms that survive and thrive.

[1] This point is where the other one of us wants to refer you to the speech in Top Gun: Maverick about drones taking over for test pilots.

[2] We’re just citing to some of the great programs out there. There are many such great programs.

Nancy B. Rapoport is a UNLV Distinguished Professor, the Garman Turner Gordon Professor of Law at the William S. Boyd School of Law, University of Nevada, Las Vegas, and an Affiliate Professor of Business Law and Ethics in the Lee Business School at UNLV.  After receiving her B.A., summa cum laude, from Rice University in 1982 and her J.D. from Stanford Law School in 1985, she clerked for the Honorable Joseph T. Sneed III on the United States Court of Appeals for the Ninth Circuit and then practiced law (primarily bankruptcy law) with Morrison & Foerster in San Francisco from 1986-1991.  She started her academic career at The Ohio State University College of Law, served in three deanships, one stint as Acting Provost (UNLV), one stint as Acting CFO (also UNLV), and one stint as Special Counsel to the President of UNLV.  In 2022, UNLV’s Alumni Association named her the Outstanding Faculty Member of the Year.  Boyd law students have honored her three times:  she tied (with Professor Jean Sternlight) for “Faculty Member of the Year” in 2024; she was named “Faculty Member of the Year” (and faculty commencement speaker) in 2021; and she was named “Dean of the Year” by Boyd law students in 2013.  Her specialties are bankruptcy ethics, ethics in governance, law firm behavior, artificial intelligence and the law, and the depiction of lawyers in popular culture.  She has served as the Secretary of the Board of Directors of the National Museum of Organized Crime and Law Enforcement (the Mob Museum) and currently serves as a Trustee of Claremont Graduate University and the Chair of its Audit and Risk Management Committee.  She is also a Fellow of the American Bar Foundation and a Fellow of the American College of Bankruptcy.  In 2017, she received the Commercial Law League of America’s Lawrence P. King Award for Excellence in Bankruptcy, and in 2018, she was one of the recipients of the NAACP Legacy Builder Awards (Las Vegas Branch #1111).  She has served as the fee examiner or as chair of the fee review committee in such large bankruptcy cases as Zetta Jet, Toys R Us, Caesars, Station Casinos, Pilgrim’s Pride, and Mirant.  She is serving as the President of UNLV’s Chapter 100 of Phi Kappa Phi from 2024-2025.

Joseph R. Tiano Jr., Esq. is Founder and Chief Executive Officer at Legal Decoder. After practicing law for nearly 20 years, Joe founded Legal Decoder because he saw that clients lacked the analytic tools and data to effectively price and manage the cost of legal services delivered by outside counsel. Joe set out to build an intelligent, data driven technology company that would revolutionize the way that legal services from outside counsel are priced and economically evaluated. Legal Decoder’s data analytics technology is used in law firms of all sizes from AmLaw 50 law firms to boutique firms; Fortune 500 legal departments and in major Chapter 11 bankruptcy cases (PG&E, Purdue Pharma, Toys R Us and others). Joe is a prolific author having (co-)authored nine law review articles published in scholarly journals. In addition, he has written articles for countless blogs and other online media on substantive legal issues and the legal industry in general. He regularly presents at CLEs and other seminars and courses on topics ranging from artificial intelligence, LegalTech, legal data analytics to legal ethics and legal malpractice. He is also an Adjunct Professor of Law at the Arizona State University Sandra Day O'Connor Law School. Previously, Joe was a Partner at Pillsbury Winthrop Shaw Pittman, LLP and Thelen LLP where he grew and managed all aspects of a multi-million-dollar cross-border finance practice. Entrepreneurship runs through Joe’s veins since his early days as a venture capital lawyer representing transformative technology companies, like Blackboard Inc., and many of the outgrowths of Blackboard (WeddingWire/The Knot, Presidium, Starfish Retention Solutions and others). Joe graduated from Georgetown University in 1992 with a Bachelor of Science Degree in Business Administration and received his J.D. from the University of Pittsburgh School of Law in 1995. Joe is a native Washingtonian who currently lives in Scottsdale, Arizona with his wife, Meredith, and their two boys, Gabriel and John-Paul. During the rare moments when he is not working, Joe can be found taking his sons on hikes, watching their extracurricular activities and helping Meredith implement her design creations.