In an interview with Artificial Lawyer, Paris-based AI-native consulting firm owner, Olivier Chaduteau, set out a three-part account of the current state of AI in the legal sector. At first, lawyers dismissed AI as irrelevant to expert work. In the second, organisations bought licences to LLMs to signal activity to partners and/or clients, but little else. He says the market has now entered a third stage, in which firms understand it’s time to engage with the AI tools at their disposal.
Chaduteau said to engage with AI on an operational level, firms should focus on change management, choosing the right operating models, and reforming their business models. It’s necessary to rewrite workflows, re-train the lawyers on the books, set standards for AI use, and decide where human review needs to be in the workflow. These are, he acknowledged, political questions that are much more challenging than stage one’s decision, which comprised largely of which large language model or law-specific AI service to buy into.
For law practices, the presence of AI in the workflow may instigate a farewell to cost-plus pricing and hourly billing, with firms adopting what he terms value pricing instead – something that many firms have considered and in some cases, already adopted independently of technological issues. There are questions posed about fundamental billing methods, after all, if firms use AI to reduce the time spent drafting papers or reviewing documents, and can undertake research more quickly. The correlation between a lawyer’s time and income is weakened, and law companies may have to start thinking differently.
Senior managers at law firms have two choices, therefore. AI can be used inside existing billing models for as long as possible, optimising the ratio of cost to revenue. The other is to redesign the firm’s service and prices in line with an AI-enabled, streamlined workflow, and offer clients services based on a new billing model that’s reflective of the automation in play at the law office. Chaduteau’s view is that clients will eventually force the issue – someone, somewhere will begin to offer better value based as a result of their increased efficiencies (most likely a new company unencumbered by traditional billing practices) and the rest of the market will be forced to respond and offer the same. This is a classic case of technological disruption.
Chaduteau said corporate legal departments are increasingly pressured to show how they are implementing AI in workflows, in line with other business functions in the enterprise, a pressure that’s is likely to matter more, in the long run, than any amount of internal enthusiasm. Demands for evidence of competence and efficiency are not unique to internal law departments – the same is happening right across enterprises that have invested significantly in AI.
Chaduteau said that he thinks AI capability will become part of panel selection, pitch processes, and ongoing client scrutiny during the selection process for work. Practices may have to give details on which tasks are supported by AI, what safeguards are in place, how client confidentiality is protected in the context of those systems, and what measurable effect the tools have on the firm’s speed and quality of service.
Chaduteau did not frame the technology solely as a cost-reduction tool, but one that lets lawyers have more room in their working days for more interesting work. Lawyers, like any profession, are more likely to engage seriously with a technology reduces the amount of routine tasks that give little back in terms of job satisfaction. In large firms, that points to practice-level uses and basic supervision, and every use-case will be different.
Large law firms are moving from symbolic adoption towards changes to their operations because of AI’s abilities, Chaduteau claimed. The firms that benefit are likely to be the ones that treat AI as a management decision before it becomes an issue pressed upon them. That means disciplined implementation, client-facing proof of value, careful treatment of confidentiality and sovereignty, and a willingness to examine whether the billing model still fits the work, he said.
(Image source: Pixabay)
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