It's about ๐
๐๐๐๐ ๐
๐๐ ๐๐๐๐๐๐๐๐๐ (Festpreisfähigkeit)
๐๐ฏ๐๐ซ๐ฏ๐ข๐๐ฐ:
Recent workshops with law firms (LF) and legal departments (LD) revealed interesting insights into AI's impact on the commercial relationships in the legal sector. The focus on AI has largely been on service delivery, use cases, risks, and opportunities. However, discussions on its impact on legal fees are just beginning.
๐๐ข๐ฏ๐๐ซ๐ ๐๐ง๐ญ ๐๐ข๐๐ฐ๐ฌ ๐จ๐ง ๐๐'๐ฌ ๐๐จ๐ฆ๐ฆ๐๐ซ๐๐ข๐๐ฅ ๐๐ฆ๐ฉ๐๐๐ญ:
โ
๐๐๐ ๐๐ฅ ๐๐๐ฉ๐๐ซ๐ญ๐ฆ๐๐ง๐ญ๐ฌ:
- Some anticipate significant reductions in external legal spend, with expectations for double-digit cost reductions in specific work types.
- Others prioritize quality and fair pricing, believing market dynamics will address cost concerns.
โ
๐๐๐ฐ ๐
๐ข๐ซ๐ฆ๐ฌ:
- Some foresee a negative impact on profits.
- Others see AI as a vehicle to increase market share, revenue, and profits.
What they have in common? LF and LD familiar with AI and its practical applications are better informed and more optimistic.
๐๐๐ฒ ๐๐๐๐ซ๐ง๐ข๐ง๐ ๐ฌ ๐๐ซ๐จ๐ฆ ๐๐ฎ๐ฒ-๐๐ข๐๐ ๐๐ง๐ ๐๐๐ฅ๐ฅ-๐๐ข๐๐:
๐๐ง๐ฏ๐๐ฌ๐ญ๐ฆ๐๐ง๐ญ: Both sides need to invest in AI, with law firms incorporating investments into their pricing.
๐๐๐๐ข๐๐ข๐๐ง๐๐ฒ: AI will reduce billable hours on the sell-side but may not necessarily translate to client savings.
๐๐ง๐ฌ๐จ๐ฎ๐ซ๐๐ข๐ง๐ : Increased efficiency will lead to more insourcing by legal departments, reducing external spend and offering more engaging work.
๐๐ฎ๐ญ๐ฉ๐ฎ๐ญ ๐ฏ๐ฌ. ๐๐ง๐ฉ๐ฎ๐ญ: AI-supported legal service delivery's output does not align with the traditional input-based model.
๐๐๐ฅ๐ฎ๐ ๐๐๐๐ฌ๐ฎ๐ซ๐๐ฆ๐๐ง๐ญ: The output is either a work package or measured by value, raising complex questions about the ๐ฏ๐๐ฅ๐ฎ๐ of professional services.
๐๐จ๐ฆ๐ฆ๐๐ซ๐๐ข๐๐ฅ ๐๐จ๐๐๐ฅ๐ฌ: Law firms will need to shift from input-based to output-based commercial models.
๐๐ก๐ข๐๐ญ ๐ญ๐จ ๐
๐ข๐ฑ๐๐ ๐
๐๐๐ฌ: Like other professional services, the legal industry will move from time-and-materials to fixed fees, a development I observed in my previous career in IT and consulting. And no, the billable hour is not dead!
๐
๐
๐ involves:
๐๐ญ๐๐ญ๐๐ฆ๐๐ง๐ญ๐ฌ ๐จ๐ ๐๐จ๐ซ๐ค: Legal departments must clearly define the scope of work.
๐๐ญ๐๐ง๐๐๐ซ๐๐ข๐ณ๐๐ญ๐ข๐จ๐ง ๐๐ง๐ ๐๐ฎ๐ญ๐จ๐ฆ๐๐ญ๐ข๐จ๐ง: Maximizing efficiency through standard practices.
๐๐๐ฎ๐ฌ๐๐๐ข๐ฅ๐ข๐ญ๐ฒ: Utilizing project management, frameworks, and templates.
๐๐ฎ๐ญ๐ฉ๐ฎ๐ญ-๐
๐จ๐๐ฎ๐ฌ๐๐ ๐๐ข๐ง๐๐ฌ๐๐ญ: Shifting focus from input to output with appropriate KPIs.
๐๐๐ญ๐ข๐จ๐ง ๐๐ฅ๐๐ง: We have analyzed time sheets and developed a project structure plan for law firms and legal departments to tackle these challenges. For more information, please reach out.
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Achim Tschauder
Josef-Brix-Straße 16
65187 Wiesbaden๏ปฟ
Mail: at@legal-operations.com