Extract from Ella Sherman’s article “Legal Tech-Owned ‘Hybrid Law Firms’ Are Growing. Why Now?”
A growing number of law firms are launching under a hybrid model designed to put artificial intelligence-powered legal services at the forefront of their business.
This type of law firm, typically made up of a law firm and a separate, affiliated service or legal tech provider, is becoming more common in the legal market. Hybrid law firms in the U.S. must establish a separate company apart from the law firm to receive outside funding from investors.
Such hybrid law firms have the potential to disrupt the traditional model of law firms and alternative legal service providers.
The hybrid, AI-powered law firm is not an entirely new concept. In fact, it was the strategy behind Atrium, a hybrid law firm that launched in 2017 but had to shut down its startup operations three years later after raising a total of $75.5 million. While the model did not pan out for Atrium, newer hybrid firms may be better positioned to succeed. QuisLex CEO Sirisha Gummaregula sees the growth of hybrid law firms stemming from the emergence of generative AI technology.
“Now that there is this new powerful technology, should the legal services delivery that is currently being done by traditional law firms and ALSPs, should that change?” Gummaregula told Law.com. “The AI native law firms, the new models, they’re taking the approach that this is an opportunity to fundamentally redesign how legal advice is being delivered and how legal services are being delivered, where the technology is front and center with the human providing the governance layer or the judgment layer.”
