Generative AI in Law: Valuable, Inevitable… and Still Unquantified
Everyone agrees: generative AI is powerful and poised to become essential in legal practice. But no one seems entirely sure what it’s worth — not in dollars, billable hours, or ROI. That’s the core tension in the 2025 Generative AI in Professional Services Report from Thomson Reuters.
It’s not just the hype cycle that confuses lawyers into mistaking productivity tools for miracle machines. The confusion runs deeper. Firms are investing, and clients want them to, but almost no one is tracking what GenAI is actually doing.
While 79% of firms expect significant integration of generative AI by 2027 — and 95% of professionals believe it will become central to their workflows — only 20% are actively tracking ROI. Even more striking, 57% of clients say they want their legal providers to use GenAI now, but 71% don’t even know if their firms are doing so.
This disconnect is setting the stage for future tension around legal pricing. Almost half of firms believe GenAI won’t impact billing — but that’s already fallen 7 points since 2024. Eventually, something has to give.
As GenAI reduces the need for junior lawyers and automates specific tasks, firms face three options:
1. Accept that matters will bring in less money (unlikely).
2. Raise hourly rates to offset lost time (already controversial).
3. Expand fixed-fee and value-based billing models (more realistic but still underdeveloped).
The last option seems most promising — and necessary. The report found that 40% of firms expect greater use of alternative fee arrangements due to GenAI, but many still hope to maintain the status quo. That’s risky. You can’t change your operating model without measuring whether it’s working.
Crucially, even among the minority of firms measuring ROI, only 38% evaluate client satisfaction—a key factor in long-term profitability and trust.
Generative AI isn’t going to leap forward without breakthroughs in computing or energy infrastructure. However, the tools already in use are transforming workflows. Law firms and clients alike need to stop guessing and start measuring. If you haven’t figured out how AI affects your pricing, rest assured that someone else will.
Source: Above the Law
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