Extract from Isha Marathe’s article “Gen AI Could Force Lawyers, Clients to Talk Differently About Billable Hour, Legal Pricing”
When a latte in Manhattan can cost close to a lunch in San Antonio, for any customer, the concept of how expensive something is, and how much it should cost, can get murky.
For many lawyers and clients, this incongruence is at the crux of an obstinate pricing model, the billable hour, that many deem responsible for making legal work tedious and the legal market resistant to change.
And while the potential of legal technology to disrupt the billable hour is often touted, this traditional pricing model has, of course, survived—and in some ways, even thrived.
But the current moment brings with it a technology, generative artificial intelligence, that is unlike many past innovations, reviving not only the potential to hamper the billable hour, but also the impetus for legal teams to better communicate with their clients about pricing dynamics.
In a session last Thursday at Legalweek 2024 entitled, “Aligning Technology, Pricing, and Compensation to Create the Sustainable Engagement of the Future,” panelists discussed which stars would have to align in order to rescue legal from its archaic pricing structure—and how much upheaval could be caused by emerging tech, or legal professionals themselves.