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The traditional law firm structure—with many lower-level lawyers performing mostly analytical tasks on behalf of a few partners—is poised to become obsolete thanks to artificial intelligence.
The firms that survive and thrive will embrace AI to elevate their value and rethink their approach to human capital, changing their practices and culture to emphasize innovation and insight.
A 2023 Goldman Sachs report estimated that 44% of tasks within legal could be automated by AI. While any such projection is speculative, it doesn’t feel far off.
Generative AI’s breakthrough abilities—to understand natural language and to analyze and synthesize unstructured information from many sources—is a perfect fit for our industry. Tasks currently performed by lawyers, paralegals, and others will now be automated or amplified by AI. This will transform every sector of our industry, but none more than law firms.
End of the Pyramid
In many ways, the structure and model of the modern law firm has barely evolved over the last century. It’s a pyramid: A small number of partners, sharing both profits and decision-making power, supported by a much larger group of less senior staff.
These firms are dominated by the classic “up or out” career model. Associates work tirelessly to rise through the ranks to someday rise to the partner tier, but at the most prestigious firms, less than 10% ever do.
I was one of those associates, working for a big firm and spending long days and nights stuck in a windowless office. I worked with smart and talented people, but it was hard not to feel there was a better way.
Intelligent, motivated attorneys who essentially are treated as disposable and interchangeable resources are constrained to a narrow career track, chasing a partner status that is harder than ever to attain. They’re forced to operate within a rigid, inefficient system to get their work done. And so much of that work is grinding and repetitive, scanning across sources or precedents, or drafting and editing long legal documents.
The pyramid model has endured through a lot of change, but it won’t survive the rise of AI. So much of the brute-force legal analysis work that occupied my time when I was an associate can now be heavily or completely automated.
The latest AI tools have moved beyond straightforward reading, writing, and comprehension; they now can display creativity and perform controlled reasoning. They can review and tag documents, adapt contracts and legal terms to fit a particular set of circumstances or business rules, and create reports spanning huge bases of complex data.
The capabilities that exist today are nothing compared to what will come in the next six months or year, much less what we’ll see in five years.
With capable tools, there won’t be the need for large teams of junior lawyers, and clients won’t be willing to pay for them. If a firm chooses not to use the AI tools, then clients or other firms will.
Next Steps
In an age when legal knowledge and analysis can be largely or fully delivered as an AI service, firms need to embrace a new value proposition. They must shift from providing legal counsel to providing business strategy, helping guide clients through an uncertain and fast-changing world.
This isn’t new. The most in-demand partners at firms have long been providing this type of broader value and strategic insight. Many of the best-compensated, most celebrated senior attorneys play this role, earning the dedication and loyalty of their clients.
Anyone looking at law firms can recognize Sherwin Rosen’s famed “superstars” economic theory at work: A handful of individuals can rise far above others, seizing a disproportionate share of the market rewards.
It’s critical to note that these superstar “lawyer advisers” have succeeded not because of, but rather despite, the pyramid model. Managing and coordinating large teams of associates is time-consuming and difficult work, pulling them away from interacting with clients or exploring strategic possibilities. This has been a necessary but distracting element of their work, but that’s largely no longer the case.
With AI replacing junior associates on legal research, document review, and document management tasks, partners will be freed to hone business strategies with their clients, deepen their relationships, and leverage their unique capabilities.
The paradox of AI is that it renders humans more, not less, important. It allows individuals of exceptional talent and ability to have more leverage and impact. When they aren’t tasked with running large teams staffed by mostly interchangeable associates, these leading partners can identify and develop a small, tight team.
I imagine many law firms will start looking more like venture capital firms, with each partner having one or two associates in whom they train and invest heavily.
Another area poised for much investment is bringing in new skill sets. Lawyers always will be important, but you’ll see firms hiring people with vastly different capabilities and roles. Confronting and solving the client problems of the next decade will require technologists, legal engineers, data analysts, AI experts, and others. Non-lawyers will have more opportunities, and lawyers will have more interesting and powerful experiences.
The best firms will recognize this new competitive landscape as a chance to refocus on their real value—their deep expertise and domain knowledge, the strength of their relationships, and their ability to help clients look around corners and spot opportunities and threats. AI can’t replace that value, but it can amplify it and help it scale in new ways.
This is true not just for firms but for the whole legal industry. AI offers the most exciting and transformative technology wave of our time, with immense potential to push our work, culture, and society forward.
Firms, law schools, and others that take the lead raise exciting possibilities. Instead of being a laggard in adopting technology and delivering innovative services, legal could become the tip of the spear in the post-AI era.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Author Information
Jason Boehmig is CEO of Ironclad, and was an adjunct professor at Notre Dame Law School.
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