Generative AI is already disrupting the legal profession by slashing the time and cost of the searching, summarizing and drafting that has been the bedrock of legal work. As more manual labor becomes automated, it gets harder for law firms to justify charging for time. This in turn will have an impact on how legal work is handled by in-house corporate teams.
It is inevitable that law firms will have to accept the death of billable hours and rethink how to apply the latest legal tech tools. As a consequence, we expect to see more legal work moving in-house as Generative AI makes it possible for companies to do more themselves. It is also a way for companies to avoid ‘AI washing’, where law firms are claiming to be using AI, but in reality are only doing what is necessary as a brand-building exercise.
Some will accept the shift toward Generative AI, while others will cling to the past and be unable to adapt to a livelihood beyond billable hours. Generative AI has been a game-changer, bringing accuracy, complexity and flexibility that wasn’t technically possible before. Despite the initial disbelief by senior professionals, we have found the reaction to be one of testing and acceptance and many are enthused about the potential of GenAI-native tools for legal work.
The business model of legal work will have to change
Anecdotally, we have heard of senior partners who prefer to use Generative AI summaries over the work of a newly-qualified solicitor. In the short term, this may be a boon for law firms that can leverage their brand to charge the same rates yet produce the work at a fraction of the cost. However, with AI-driven law firms now gaining regulatory approval and large firms employing AI specialist lawyers, costs will ultimately be driven down in the long term.
With this kind of automation, billing by the hour will no longer cut it with clients. The business model of law firms will be disrupted and corporate legal teams will expect products, outcomes and deliverables instead.
For those who can get past the disbelief and denial of this monumental shift, there is an opportunity for legal professionals to be more thoughtful and strategic now that much manual work can be automated.
Less work for lawyers will impact the talent pool
Overall, we expect to see less work for law firms and a shift in the skills that corporate legal teams need. GenAI-native tools are particularly useful for companies that have a high regulatory and compliance burden, and we expect such companies to rely less on external counsel.
With Generative AI able to automate manual legal work, it is likely there will be fewer jobs for law graduates. In fact, this is a trend we are already seeing. In 2024, for example, the recruitment of law graduates fell by 7.9%. This is creating fears of a ‘jobpocalypse’ for graduates, with entry-level jobs seemingly being eradicated by Generative AI and the future of work set to change dramatically.
A real question hangs over the legal profession about what the future of the firm is and how the next generation of lawyers will be trained. Right now, there is a shift in expectations of what graduates are expected to do while there is also a skills gap with the senior partners who are expected to oversee them and the use of the latest legal technology.
The impact of Generative AI’s disruption is being felt already at the junior level. One general counsel at a US biotech company recently commented that discovery and diligence is the “sandbox of junior lawyers” and this is no longer a viable training ground for the industry. “Clients are going to say, I’m not going to pay $600 an hour to have a junior lawyer review 57 commercial contracts,” they commented.
This will create a “vacuum in training” according to Stephen Franchetto, sole counsel at a Canadian pharmacy services company. “If you don’t understand the ‘why’ behind what you’re doing, how the heck are you going to be good at it?,” Franchetto said.
This shift will also be felt in corporate legal teams, which source their talent pool from the graduates who have been trained in law firms. As the talent funnel changes, with fewer lawyers to choose from, corporate legal teams will also turn their attention to the other skills – technical operations, AI analysts and so on – that are needed in this new era. As the potential of Generative AI takes hold, these kinds of skills will be a ticket into the profession.
Despite the fears, there are massive opportunities
Meanwhile, competition among graduates is intensifying as the job pool shrinks. Despite the fears, however, there are opportunities for law graduates right now – even in the face of AI-driven law firms and AI lawyers. Those with a progressive mindset can become equipped with the skills that are currently lacking in many legal teams and specialize in implementing and effectively using legal tech and Generative AI. In three years, this kind of skill will be a commodity, but right now there is an opportunity to stand out and differentiate.
