Source: Financial Times

Despite the growing adoption of artificial intelligence (AI) in many sectors, legal tech firms are finding it challenging to sell AI products to law firms, where the traditional billable hour model still dominates. The article explores how AI tools—designed to automate routine legal tasks like document review, contract analysis, and legal research—could potentially replace the billable hour and shift law firms to more value-based pricing models.

However, many law firms remain resistant to change, as the billable hour is deeply ingrained in the legal industry. Legal tech firms argue that AI can increase efficiency and reduce costs for clients, but convincing law firms to move away from billing by the hour remains a significant hurdle. The article also examines how some firms are experimenting with AI tools in specific areas, such as e-discovery, but widespread adoption is still slow.

The legal tech industry is optimistic that as AI technologies mature and prove their value, more law firms will begin to embrace AI solutions, potentially transforming the traditional billable hour model.