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How AI will affect the traditional legal pricing model

26th November 2018

The legal industry is keen for digitisation.

This is especially for lower-level legal work, which tends to require a lot more man-hours than the top-billing work. This is where the use of technology has really taken off. Firms are keen to use AI technology to perform the more meticulous tasks, with the benefits including an improvement in accuracy, a reduction in time-spent as well as cutting costs.

The use of AI can be used to review contracts and carry out other routine legal work. For example, it could help produce the most relevant cases and information in a much shorter time span.

This could dramatically alter the pricing model of law firms. 

It will have a revolutionary change on how this type of work is charged for. It is more likely that a fixed-price offering will become the norm, with clients being the ones making a saving. 

But what does this mean for junior lawyers?

Can law firms start to reduce their trainee numbers and will training substantially change?

In a job climate which is already difficult for those trying to commence their legal career, the implementation of AI tools in law firms may not be well received by all. 

Jomati principal Tony Williams commented:

‘It is often said that the law firm partnership model hinders the ability of the legal sector to embrace change. 

Legal practices around the world are now investing significant amounts of time and money on technology and innovation, entering into new partnerships, developing new legal products, diversifying into new services and hiring the personnel required to deliver change. 

‘These new ways of working will, ultimately, have a profound effect on the future success and business model of law firms and the shape of the legal market."

However, it is noted that not all law firms are keen to implement such changes as of yet. However, Travers Smith, Linklaters and Denton's are just a few firms who have already begun embracing the technology.