AI is expected to dismantle the legal industry’s existing hourly billing model, an argument has been raised.

On March 13 local time, Business Insider reported that Anthropic general counsel Jeff Blake (제프 블레이크) stressed that the legal industry has long known the limits of hourly billing, but AI will now change it fundamentally.

He argued that as AI replaces repetitive legal work, the hourly billing model is no longer valid. He added that the adoption of AI will free lawyers from tedious tasks and shift legal services toward strategy and outcomes.

He said the existing system has distorted interests between law firms and clients. Companies want issues resolved quickly, but law firms have a structure in which they earn more revenue the longer work takes.

Blake said clients want problems solved efficiently, but law firms make more money as cases grow bigger, and AI will bridge that gap. Liberty Mutual chief legal officer Damon Hart (데이먼 하트) also said the value of legal services will now be strategy and results rather than time spent.

IBM general counsel Anne Robinson (앤 로빈슨) said the hourly billing model does not align the interests of law firms and clients, and new billing methods suited to the AI era need to be considered. Blake said as AI replaces repetitive legal work, law firms will need to find new economic models, and predicted that firms that adapt quickly to change will be more competitive.