If you are being billed by the hour for professional services, now is the time to renegotiate, as AI has put the billable hour on life support.
In January 2024, during his recuperation from surgery and radiation treatment of thymoma — an extremely rare cancer — Los Angeles-based attorney Aaron Shechet, “wanted to do something for my wife and law partner, Leigh, who proved what being there ‘for better or for worse’ means. She said, ‘Make an app that helps me bake better sourdough.’
“So I built an app to take pictures of her sourdough bread — AI analyzes the picture and tells how to improve it. It came out so good that I released it on Android and Apple.”
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Then an idea came to Shechet. “What if I could develop a platform that helps service providers, accountants, lawyers and other professionals use AI programs that would save them hours and result in significant cost savings to their clients?”
Veilgrid was the result. “It is a platform that creates custom AI-powered tools tailored to specific business activities,” he notes, “such as drafting contracts, leases, various sorts of documents and automating related office functions, saving upwards of 75% of the time required to do the same work manually.”
AI impacts professionals and their clients/customers
Shechet has been a mediator and fee arbitrator in Los Angeles for years, and he has impressed me with his concern for clients trapped in billable-hour spirals. He sees a tsunami coming to those professions that view efficiency as their mortal enemy.
“Billable hours reward lawyers, accountants, management consultants — to list just a few — for spending more time on a task,” he says. “Faster work — efficiency — directly reduces total revenue, as you can’t bill a whole lot of hours.
“With AI, the incentive is to be more efficient, as you will invoice on the completion of work, not the hours to do the work.”
He adds, “Clients do not care how the final product was produced — they just want results, the more economical the better. And they know that AI saves an enormous amount of time in producing reproducible items, such as contracts, leases, tax returns and so much more.”
A new standard of care
Shechet strongly believes that the new standard of care for law and other professions, figuratively speaking, will be a $5 charge with “AI quality,” instead of hundreds of dollars an hour with potentially less quality.
“What clients pay must come down,” he says. (For the record, AI is wrong sometimes, so someone still needs to check the work to make sure it’s accurate.)
He lists tasks where AI is most effective in law that would take hours to do manually and cost clients hundreds to thousands of dollars:
- Anything written, including contract drafting, pleadings, motions and discovery
- Summaries of depositions for senior partners that can be generated in minutes
- Legal research that requires dramatically reduced time
- Tasks that once took teams of junior associates weeks can now be completed by a single attorney in a few hours or even seconds
AI also works 24 hours a day. It doesn’t have student loans or employment insurance, it doesn’t complain, and it doesn’t face employee lawsuits.
New billing methods
Shechet and many other observers expect to see subscription models where a lawyer, accountant or other professional is on call to handle all the matters a client needs for a flat monthly fee.
“We should also see more per-job and contingency fees,” he notes, adding, “AI is no longer in the experimental stages for many professions. It is being widely adopted. Clients need to ask their lawyers, accountants and other professionals who bill by the hour, ‘Are you using AI to save me money? And if not, why not? Why does this professional service cost so much?'”
What’s the impact on lawyers?
I asked Shechet what impact AI will have on the human side of the legal profession.
“There will be little justification,” he says, “for massive law firms — that have been compared to pyramid schemes — to reward senior partners while demanding impossible 2,000 yearly billable hours from junior lawyers. That (practice) has invited decades of bill-padding and outright fabricated work and destroyed marriages and families.
“The need for lawyers will shrink, and hopefully, the ability to go home at 5 p.m. and have dinner with the family and have a life will return to the legal profession.”
For anyone considering law as a career
Shechet cautions that law can no longer be recommended as a safe, automatic path to a high-income career.
“But if law is pulling you, go for it. Follow your instincts, but do not expect the profession to look the way it did 20 years ago. Veilgrid came from following what presented itself: I built it for our practice, then other lawyers, then other professions, and finally, it became a platform.
And he cautions, “Anyone considering law should think very carefully about debt. Do not borrow an enormous amount of money because this seems like a safe profession. The supposedly safe, predictable part of legal work is exactly the part AI is commoditizing most quickly.”
Dennis Beaver practices law in Bakersfield, Calif., and welcomes comments and questions from readers, which may be faxed to (661) 323-7993, or e-mailed to Lagombeaver1@gmail.com. And be sure to visit dennisbeaver.com.