Law Firms’ AI Nightmare Is Fewer Billed Hours and Lower Profits

Reviewing anonymized time sheets from real law firms, Brown hypothesized AI would have its biggest impact on time entries for “drafting and reviewing.” Those entries accounted for 47% of the revenue in his sample of timesheets, which came from a broad range of work performed by 10 large firms, totaling around $500,000 in revenue.

Brown estimated a conservative 5% reduction in partner hours and a 20% reduction in non-partner hours. That led to a 13% revenue decline and a 7% cut in profit margins.

That’s certainly not the AI future law firm leaders are dreaming of.

Source: Law Firms’ AI Nightmare Is Fewer Billed Hours and Lower Profits