Notes To My (Legal) Self Season 9, Episode 2: LLMs and Business of Law: How Will Lawyers Continue Making Money?! (with Damien Riehl)
How will lawyers make money in a world where AI can do in minutes what used to take hours? In this episode of Notes to My (Legal) Self, we dive into the transformative effects of Large Language Models (LLMs) on legal practice with our special guest, Damien Riehl. Together, we explore the profound changes LLMs are bringing to the traditional hourly billing model and discuss how the legal industry can adapt to this new reality.
With LLMs increasing efficiency, we're seeing a shift toward flat fee billing models. Currently, flat fees make up about 10%-15% of legal revenue, but this could rise to 50% or more as AI continues to revolutionize our industry. But what does this mean for the future of legal work and the financial health of law firms?
Our conversation also delves into the untapped market of legal services—both in corporate and consumer sectors—where needs often go unmet due to high costs. With LLMs reducing expenses, there's a golden opportunity for lawyers to penetrate these markets more deeply, potentially boosting profitability even as traditional revenue streams evolve.
Key Takeaways:
Insights into Reshaping Workloads: Damien explains how LLMs are changing workloads and billing practices in the legal field, making traditional time-based billing less viable as technology increases efficiency.
Shift from Hourly Billing to Flat Fee Models: Understand the broader implications of moving from an hourly billing model to flat fees, especially as LLMs reduce the time required for various legal tasks.
Strategies for Tapping into the Latent Market: Learn how lawyers can leverage LLMs to access underserved markets, both in corporate and consumer sectors, by providing more affordable and efficient services.
Navigating the Ethical Landscape: Delve into the ethical considerations that arise as the legal industry adapts to new technologies, including the challenges of maintaining reasonable fees and client confidentiality.
As you listen, reflect on these critical questions: How can you adjust your billing practices to stay competitive in the age of LLMs? In what ways can legal professionals leverage LLMs to access and serve the latent market effectively? What are the potential challenges and benefits of transitioning to a flat fee model?
Don’t miss this insightful exploration into the future of legal billing. Learn how you can adapt and thrive amid these technological advancements. Join the conversation and discover the opportunities that lie ahead.
Thank you for tuning in, and remember to subscribe and share this episode with your colleagues. Let's navigate these changes together and redefine what it means to practice law in the 21st century. Stay curious, stay proactive, and embrace the future of legal innovation!