Tech giant’s top lawyer makes bold predicition
The billable hour, that most stubborn fixture of the legal profession, may finally have met its match, according to the general counsel of US tech giant Anthropic.
Jeff Bleich, the top lawyer at Claude-maker Anthropic, told last week’s American Bar Association White Collar Crime Institute in San Diego: “I don’t think the billable hour is the solution, and we’ve known it for a long time.”
For the uninitiated the dreaded billable hour has long been the backbone of how law firms charge clients. Rather than charging a fixed fee, lawyers instead split their time into six-minute increments, log their work, and invoice their clients accordingly.
The model has been under pressure for some time, with clients increasingly pushing back against open-ended hourly charges in favour of more predictable fee structures. Bleich, who previously served as a partner and group CEO at Dentons before joining Anthropic, said AI tools are eliminating the need for companies to hire armies of lawyers to do what he called “tedious” but lucrative work.
“Now we’ve got a technology that’s going to eliminate the sorts of things that allow people to become wealthy off of tedious work,” Bleich said on the panel, alongside lawyers at Google, IBM, and Liberty Mutual. “That was not what lawyers are trained to do, and not what we ultimately look to lawyers for.”
According to Bleich, the current model pits the interests of firms against those of their clients. Whilst the longer lawyers work on a matter, the more money they make, clients naturally want matters resolved as quickly as possible. The billable hour has “created a wedge,” he said.
“Clients want you to solve the problem as efficiently as possible and with as little drama as possible,” he continued. “And if you’re a company, the bigger the case gets, and the more dramatic it gets, and the more complicated it gets, and the more work that has to be done, the more lucrative it is.”
As reported by Business Insider, fellow panellist Damon Hart, lawyer at Liberty Mutual, added that the value of legal work is no longer about time spent. “The value is no longer you putting in time,” Hart said. “The value is your strategy, your results.”
Bleich said he still values outside law firms, but wants them to find an alternative that works for everyone. “We’re not going to sort of cheap out and starve you,” he said. “On the other hand, you have to have an economic model that works. And the firms that adapt to that faster and better will be leapfrogging other firms, because they’ll be more attractive to work with.”
These comments come at a difficult time for Anthropic, who are currently embroiled in a dispute with the Trump administration after the US Department of Defence effectively blacklisted the company following the collapse of contract negotiations. Anthropic has since sued the federal agencies involved.
yawn
if AI eliminates the tedious work that junior lawyers cut their teeth on, who develops the judgment to do the strategic work that supposedly replaces it? The panel basically said “the future is strategy and results” without asking where the strategists come from once you’ve destroyed the apprenticeship pipeline.
I believe the answer is in their statement, just because the law firm model works for the law firm, it doesn’t necessarily mean it works for the client. Ultimately in the end, there will be less jobs for the newly minted lawyer to jockey over. Those that are left will quickly showcase/market their strategy skillsets. Adaptation seems to be the watchword of the future legal law firm market.
That will be good for poor clients
The panel’s optimism assumes a mythical acceleration of experience that doesn’t exist. If AI eliminates the “tedious” work Bleich describes, what junior lawyers will gain the practical experience needed to develop judgment for the strategic work that Hart calls valuable? As he said, “The value is your strategy, your results,” yet there’s no consideration of where tomorrow’s senior strategists come from once the training-contract pipeline is hollowed out by automation.
The billable hour has not been around since time immemorial: I can recall its introduction in England in the middle of the last century.
Over the next decade (to use a time period suggested by Richard Susskind) in some fields outside dispute resolution ,fewer lawyers (and paralegals) will be needed and
those that remain may be given intensive and thorough training in the application of AI.
It will remain necessary (and obligatory in court matters) for the foreseeable future for AI outputs in relation to legal matters to be checked by qualified lawyers.
It is difficult to advise potential new entrants to the profession what to do. The starting point must always be what motivates them. Subject to that crucial point, I would think dispute resolution and advocacy would be the safest bet.
There are two schools of thought about AI. On the one-hand that AI has plateaued. On the other,t(at we are nowhere near the peak and still in the foothills. I suspect that latter is the safest bet.
Initially,investing in AI will be expensive both in time and money.But it maybe unwise to come late to the party as the longer it is left the harder it will be to grapple with. There is something to be said for being the one-eyed in the Kingdom of the Blind.
We are, and will be forever, a long way away from trusting AI (over the mind of a good lawyer) with the nuances and constant changes in important details in contracts, negotiations, and strategy planning where litigation is the potential end game. Value has never been just time spent, but the trickle-down from the big firms whose cachet allows them to get away with the billable six minutes has polluted the profession generally.
I’m afraid you enormously underestimate the progress of AI and of Anthropic’s model in particular. We are probably less than a year from their model outstripping even the most experienced lawyer in every respect
Real thought leader stuff here. 😉. Resurrect predictions for the end of the billable hour from the 1990s when the internet would allow for lightning speed legal research etc. but now with an AI spin. So wrong. 1000s of associates will be hired to proof LLM output that cannot be cured oh hallucination and will ALWAYS contain errors not yoerated in legal practice. LLMs are not built for ‘“accuracy”. Also, lawyers have writing style. They pride themselves on … being a good lawyer and a good practitioner different from the hordes of cheaper crappier lawyers who kick out mediocre work product similar to AI writing. Is it really necessary to say these things???