The latest episode of the Legal Leaders Exchange podcast features a compelling discussion between Jennifer McIver and Ken Crutchfield about how generative AI is transforming the legal industry. Drawing from insights in Wolters Kluwer’s sixth annual Future Ready Lawyer survey, the conversation delves into how AI is reshaping legal practice, workflows, and business models.
Generative AI has already become an integral part of the legal profession. According to the survey, 76% of law department attorneys and 68% of law firm attorneys use generative AI weekly. Additionally, 56% of legal professionals express confidence in their ability to manage technology-driven changes. The adoption of AI is likened to the shift from print to digital legal research—a transformation that required both adaptation and patience, but ultimately delivered significant benefits.
The future of the billable hour
Our experts discussed AI’s potential impact on the traditional billable hour model. The survey found that 60% of respondents believe AI will influence how legal services are billed, with optimism about this shift more prevalent among law departments (67%) compared to law firms (55%).
Jennifer and Ken highlighted how AI could accelerate the adoption of alternative fee arrangements by helping firms distinguish between high-value, specialized services, and more routine, commoditized tasks. These changes may drive higher rates for complex, expert-driven work while reducing hourly costs for more standardized processes.
Despite the potential for innovation, the billable hour remains deeply ingrained in law firm revenue models. Regulatory barriers, such as ABA rules, continue to limit the ways non-attorneys can contribute to legal work, but experiments in states like Arizona and Utah offer glimpses of possible change on the horizon.
Driving efficiency and work-life balance
Another critical point raised during the discussion was the potential for AI to enhance efficiency and improve work-life balance for legal professionals. Jennifer and Ken observed that attorneys, particularly those in large firms and corporate legal departments, often lack time to spare due to demanding workloads.
Generative AI and other technologies can act as force multipliers, amplifying the intellectual horsepower of legal professionals by automating routine tasks and streamlining processes. This shift not only enhances productivity but also holds the promise of helping attorneys achieve a better work-life balance—something they consistently express as a priority.
Insights from the Real Rate Report
The conversation also touched on some findings of the 2024 Real Rate Report from Wolters Kluwer ELM Solutions. This year’s report shows that average hourly rates for partners have risen to $803, while associate rates have increased by 8.2%.
To enhance its value, Wolters Kluwer is developing a new interactive version of the Real Rate Report, which will offer frequent updates and dynamic trend analysis. This advancement reflects a broader push toward actionable, data-driven insights for legal professionals.
What’s next for AI in legal?
Looking ahead, the conversation pointed to 2025 as a pivotal year for generative AI adoption. Practical, value-driven applications of AI are expected to take center stage, with a focus on enhancing attorney engagement and productivity. Jennifer and Ken emphasized the importance of sharing successful AI use cases within the legal industry to inspire broader adoption.
Generative AI represents a transformational force that will help attorneys and firms remain competitive. By embracing technology and adapting to these changes, legal professionals can position themselves for long-term success.
For more insights and guidance, listen to the full conversation with Jennifer McIver and Ken Crutchfield on the Legal Leaders Exchange podcast: How Attorneys are Embracing Generative AI Ahead of a Pivotal Year of Transformation.
