Law firms are working out how to use artificial intelligence to save time, but their lawyers are wringing their hands over the effect on their billable hours.
Sean Fitzpatrick, CEO of LexisNexis North America, UK, and Ireland, thinks a lot about this question. He oversees the teams responsible for delivering data products and insights to legal professionals at law firms, corporations, and government entities. Last week, during a panel discussion at Legalweek, he tried to ease their concerns.
Fitzpatrick predicted that some law partners could charge a standard billing rate of $10,000 an hour within the decade, placing them on the top shelf of high-paying, white-collar professions.
Billing rates are trending upward at big firms across the country, driven by the continued consolidation of law firms and rising demand for top legal talent. The going rate for senior partners at some of the nation’s highest-grossing law firms is close to $2,100 an hour, according to an analysis of public disclosures by legal data platform Valeo Partners.
Fitzpatrick’s belief is that lawyers who leverage artificial intelligence, from virtual legal assistants to chatbots, will provide a higher quality service to clients. They could then charge more.
During his panel discussion, Fitzpatrick offered a hypothetical.
“Let’s say an attorney does 10 hours worth of work at $750 an hour, and let’s just say it’s a very simple matter. She’s the only person that works on it,” he said.
She bills the client $7,500.
“Let’s say tomorrow, she has almost exactly the same matter, but tomorrow, she’s got access to this new technology that helps her with her work. It provides her with some additional perspectives and things that she hadn’t thought of previously. It’s that extra set of eyes.”
“She’s actually able to create more value for her client,” he continued. “So yesterday, she billed ’em $7,500. Now, she’s got a better work product than she did before. Maybe she can bill $8,000.”
The work also takes her less time now. She’s free to take on additional legal matters and produce more billings.
For top senior partners, “it doesn’t take that much inflation to get to the $10,000-per-hour billable hour,” Fitzpatrick said. “I think there’s a realistic scenario where we could absolutely see this.”
Earlier this year, LexisNexis rolled out Protégé, a system that uses agents — software that can carry out tasks without much human hand-holding — to write drafts, create timelines from documents, and allow users to query all their enterprise data. It was built on a patchwork of large-scale and fine-tuned models from OpenAI, Anthropic, Mistral, AWS, and Microsoft, the company said.
The legal industry’s reliance on billable hours is facing potential disruption. Legal experts, including attorneys and legal-tech startup founders, shared with Business Insider at Legalweek that law firms are moving toward fixed fees instead of billable hours. The idea is that artificial intelligence can handle simpler legal tasks, freeing lawyers to apply more brainpower to problem-solving.
Those lawyers might lose some of the billable hours they pass on to clients. But the value of their time is likely to increase — a belief shared by Max Junestrand, founder and chief executive of Legora, one of the more buzzed-about software firms making legal copilots.
He told Business Insider that clients will press their law firms on how they’re leveraging artificial intelligence to “do more with the hours they have.” Law firms will apply fixed fees for bread-and-butter matters as “both [AI] adoption increases and the sophistication of the tools continues to improve.”
“The lawyers’ clients always want service cheaper and better quality,” Junestrand said. “The work that AI cannot do today will become even more valuable. So law firms will have a bigger opportunity.”
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