The CEO of LexisNexis thinks AI could make lawyers more expensive — to the tune of $10,000 an hour
The use of new technology, including AI, in law firms could potentially lead to an increase in legal billing rates. The CEO of LexisNexis suggests that lawyer rates could rise to $10,000 per hour due to AI's impact on the industry. This shift towards higher rates may be driven by the efficiency and accuracy that AI brings to legal processes. As AI becomes more integrated into legal practices, it is expected to significantly impact the way billing is structured in the industry. The evolving role of technology in legal services may lead to changes in how lawyers bill their clients for their services.
Legal professionals confer in the New York Hilton Midtown lobby during Legalweek in New York City. As law firms probe how to leverage AI, lawyers are worried about the impact on billable hours. Sean Fitzpatrick, CEO of Lexis Nexis, shared why he thinks billable hours may go up in cost. AI gives lawyers "that extra set of eyes" that allows them to deliver better service, he said.
Sean Fitzpatrick's Insights
Law firms are working out how to use artificial intelligence to save time, but their lawyers are wringing their hands over the effect on their billable hours. Sean Fitzpatrick, CEO of LexisNexis North America, UK, and Ireland, thinks a lot about this question. He oversees the teams responsible for delivering data products and insights to legal professionals at law firms, corporations, and government entities. Last week, during a panel discussion at Legalweek, he tried to ease their concerns. Fitzpatrick predicted that some law partners could charge a standard billing rate of $10,000 an hour within the decade, placing them on the top shelf of high-paying, white-collar professions.
Billing rates are trending upward at big firms across the country, driven by the continued consolidation of law firms and rising demand for top legal talent. The going rate for senior partners at some of the nation's highest-grossing law firms is close to $2,100 an hour, according to an analysis of public disclosures by legal data platform Valeo Partners.
Fitzpatrick's belief is that lawyers who leverage artificial intelligence, from virtual legal assistants to chatbots, will provide a higher quality service to clients. They could then charge more. During his panel discussion, Fitzpatrick offered a hypothetical scenario to illustrate his point.
Impact on Legal Industry
Earlier this year, LexisNexis rolled out Protégé, a system that uses agents — software that can carry out tasks without much human hand-holding — to write drafts, create timelines from documents, and allow users to query all their enterprise data. The legal industry's reliance on billable hours is facing potential disruption. Legal experts, including attorneys and legal-tech startup founders, shared that law firms are moving toward fixed fees instead of billable hours. The idea is that artificial intelligence can handle simpler legal tasks, freeing lawyers to apply more brainpower to problem-solving.
Those lawyers might lose some of the billable hours they pass on to clients. But the value of their time is likely to increase — a belief shared by Max Junestrand, founder and chief executive of Legora, one of the more buzzed-about software firms making legal copilots. He predicts that clients will press their law firms on how they're leveraging artificial intelligence to "do more with the hours they have." Law firms will apply fixed fees for bread-and-butter matters as both AI adoption increases and the sophistication of the tools continues to improve.
"The lawyers' clients always want service cheaper and better quality," Junestrand said. "The work that AI cannot do today will become even more valuable. So law firms will have a bigger opportunity."
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