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Comment by w10-1 | Hacker News Reader

> You wont want or need associate attorneys

In commercial law, the business model is to rent the associates out to clients at rates higher than you pay (d/t your supervision). No client will pay $350/hour for your AI.

And for direct billing, it's not your interest to do things faster for the client (at risk of making a mistake).

So the real question is whether these pay-by-the-hour models will die as a result of competition from fixed-price transactions made viable via automation. I think not because the entire difficulty of legal work is that it's a complex bundle of issues until you sort them out; once sorted, there's really little to do other than execute (read: paralegals).

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Corporate lawyer at big law firm here. I believe the model will be like this: we will review your 1000 agreements but with AI. AI is generally accurate but has some risks, if you agree we will charge you less. The client will agree. Instead of spending 300-400 hours to review the ageeements AI will do instantly. A lawyer will spend the time on reviewing the red flags identified and draft a report. We already do the same with translation. Before computer translation became good (i.e pre-Deepl era), we used to translate documents (cease and desist letters, court petitions etc.) ourselves. Now we offer AI translation free of charge. If client wants reliance on the translation we charge a small bit. Lawfirms are also under pressure for meeting internal budgets. Most clients ask for capped fees. If you charge 10k for a job to a client and the hourly costs ramp up to 20k, the management criticises the partner, the associates become unwilling to work for the partner (as their hours get written off). So with AI law firms can bet more competitively as the cost (human attorney hours) are reduced.

> No client will pay $350/hour for your AI.

But they may be willing to pay $200/hour for your AI (plus, of course, your final expertise in the matter as the lawyer), and the firm can ditch the paralegals and pocket the difference.

The point is, if you need fewer grunts doing the busywork, you can charge less and be competitive.

There's a middle area too between your options - a law firm that utilizes AI offers cheaper pricing than the current firms for the same work. Ideally competition will drive prices down but of course law doesn't have the benefit of do-overs on cases, so reputation still plays a big factor.

That's the big question, how prices evolve if LLMs increase supply. Standard economic theory says that prices must collapse. There is probably still a short time of 2-5 years where AI native firms can pocket in quite some arbitrage but I guess markets will eventually figure it out and prices will collapse. This is not only for law. The same applies to all the other industries where LLMs can be used to automate work tasks.

I agree that prices will go down dramatically in occupations that primarily involve code, words, and numbers - and in general knowing the "rules". But there are so many occupations that will have to wait for AI to enter the physical realm. I also predict that the backlash will largely prevent that from occurring.

> No client will pay $350/hour for your AI.

But they already do! There are cases of professional service firms creating their reports using LLMs, there have even been a few prominent scandals re the fake data generated in them

It is in litigation as well. The issue is that corporate clients are demanding AI. They don’t want to pay associates to do a first draft, they want senior partner to just push the ChatGPT button and then check it.

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