The 2-Year Countdown to Obsolescence for Lawyers

Unless you’ve been sleeping under a rock, you probably already know, the legal industry is on the brink of a transformative revolution, driven by the rapid advancements in artificial intelligence (AI), but just how big of a threat is AI to the legal industry?

As AI-powered tools become increasingly sophisticated, forward-thinking law firms are harnessing their potential to unlock unprecedented levels of productivity. The adoption of AI in the legal sector is not just a trend, but a critical strategy for survival and success in the coming years.

Between the time of writing this article in August 2024 and mid-2025, there is a golden opportunity for lawyers who fully adopt AI and deeply embed it in their firms. I’m not talking about a basic AI chatbot that some tech companies add to their products so their marketing team can promote the fact that “they have AI.” I’m talking about deep AI, the kind that actually transforms businesses. 

During this period, early adopters will have a significant advantage over their competitors. They can either increase their output and bill more, leveraging the efficiency gains provided by AI, or they can lower their prices to attract more clients and gain market share. This strategic window is a game-changer for firms willing to embrace AI wholeheartedly.

However, the window of opportunity is not indefinite. Between mid-2025 and mid-2026, the legal landscape will undergo a profound shift. Firms that are not using a significant amount of AI in their legal practices will find it increasingly challenging to compete. They will struggle to match the productivity, cost-effectiveness, and quality of services provided by their AI-powered counterparts. This period will mark a critical juncture, separating the adaptive firms from those resistant to change.

The third phase, after mid-2026, will be even more transformative. Law firms that have not integrated a substantial amount of AI into their operations will face an existential threat. They simply will not be able to compete in a market where AI is no longer a luxury but a necessity. Clients will gravitate towards firms that can deliver faster, more efficient, and more cost-effective legal services, all made possible by AI.

Early adopters of this technology are already reporting impressive gains, with productivity increases of 10-20% becoming the norm. However, this is just the beginning. Samuel Junghenn, CEO of AI Legal Assistant, a cutting-edge AI tool designed specifically for Australian lawyers, predicts that “by the end of this year, we expect to see a 30-40% productivity increase for our clients, which in many cases is equivalent to doubling a firm’s net profit.”

The implications are profound. AI is no longer a futuristic concept or a nice-to-have addition. It’s a transformative tool that is rapidly becoming a necessity for law firms looking to stay competitive in an evolving landscape. 

The Productivity Advantage: Completing Tasks in a Fraction of the Time

The productivity benefits of AI are already being felt across the legal industry. Tasks that once took hours can now be completed in minutes, thanks to the power of AI-driven automation. Drafting, reviewing contracts, conducting legal research – these time-consuming tasks can now be streamlined and accelerated with the help of tools like AI Legal Assistant.

Consider the potential impact on your own practice. If you could reduce the time spent on routine or unbillable tasks by 75%, how would that transform your productivity? What if you could complete a week’s worth of work in just a couple of days? These scenarios are no longer hypothetical – they are the reality for firms that are leveraging the power of deep AI.

The implications for profitability are staggering. By dramatically reducing the time spent on routine tasks, AI enables lawyers to take on more cases and clients without increasing headcount. This means that firms leveraging AI could potentially double their net profit, simply by making their existing resources more efficient.

The Critical Time Window: A Race for Survival

While the benefits of AI are clear, it’s crucial to recognise that the window of opportunity for gaining a competitive edge is limited. Industry experts predict that within the next two years, AI adoption will shift from being a competitive advantage to a basic requirement for survival in the legal market.

As Samuel Junghenn warns, “Firms that wait to see, will find themselves in a race they cannot win. Those playing catch-up will struggle to remain relevant, let alone competitive.” The message is unequivocal: the time to act is now.

Firms that proactively embrace AI today will be the leaders of tomorrow. They will be the ones setting the pace, defining the new norms of productivity and service delivery. On the other hand, those that hesitate, those that cling to the status quo, risk being left behind, struggling to keep up in a rapidly evolving market.

The Financial Impact: Maximising Billable Hours with AI

In the legal industry, time is the most precious commodity. Every minute a lawyer spends on a task directly translates to the firm’s bottom line. This is why the productivity gains offered by AI are so transformative. By automating routine tasks and streamlining complex processes, AI allows lawyers to maximise their billable hours in ways that were previously unimaginable.

The numbers speak for themselves. “Currently, our clients are billing an extra 4 to 8 hours a week per lawyer” says Samuel Junghenn, CEO of AI Legal Assistant. “By the end of 2024, we project this number will double with the new advancements we’re preparing to launch.”

Let’s put that into perspective. For a firm with 50 lawyers, an extra 4 billable hours per week per lawyer equates to 200 additional billable hours per week. At an average billable rate of $300 per hour, that’s an extra $60,000 in revenue per week, or $2.88 million per year (accounting for holidays). If Junghenn’s projections hold true, and those gains double by 2025, we’re looking at an annual revenue increase of over $5.76 million, most of which will go straight to the bottom line.

But the financial benefits of AI extend beyond just increasing billable hours. By automating mundane tasks, AI also allows lawyers to focus on higher-value, more complex work. This not only boosts productivity but also enhances the quality and sophistication of the services the firm can offer.

Consider a corporate lawyer who spends hours reviewing contracts for standard clauses and potential issues. With AI, that same lawyer can have those contracts analysed in a matter of minutes, freeing up time to focus on more strategic aspects of the deal. This shift towards higher-value work not only makes the lawyer’s job more interesting and fulfilling but also allows the firm to charge premium rates for their expertise.

Moreover, AI can help law firms expand their services without necessarily expanding their headcount. By leveraging AI to automate certain tasks, firms can take on more clients and cases without the need to hire additional staff. This allows for revenue growth without a proportional increase in overhead costs.

Of course, implementing AI does require an initial investment. But the returns on that investment are substantial and swift. “Our clients typically see a full return on their investment within the first month or two” notes Junghenn. 

For law firms operating in an increasingly competitive market, the financial advantages of AI can’t be ignored. Firms that adopt AI early will be well-positioned to capture a larger share of the market, as they’ll be able to offer faster, more efficient, and more sophisticated services than their slower-to-adapt competitors.

But it’s not just about gaining a competitive edge. In many ways, AI is becoming table stakes for law firms. As more and more firms adopt these technologies, those that don’t will find themselves at a severe disadvantage. They’ll be slower, less efficient, and less able to handle the complex demands of modern legal work.

The Cost of Staying the Same

Despite the clear financial benefits, some law firms remain hesitant to embrace AI. The reasons for this resistance are varied, but often boil down to a fear of change and a comfort with the status quo.

“We’ve always done it this way,” is a common refrain. And indeed, the legal industry has been slow to adopt new technologies compared to other sectors. There’s a certain inertia that comes with established ways of working, even when those ways are clearly inefficient.

But in today’s rapidly evolving legal landscape, staying the same is no longer an option. The cost of inaction is simply too high.

Firms that resist AI adoption will find themselves at a severe competitive disadvantage, so the question is which is more scary, the fear of change or the fear of being so far behind it’s constant struggle to keep up. 

They’ll be slower to complete tasks, less able to handle complex cases, and more expensive to operate. As their AI-powered competitors start to pull ahead, these firms will find it increasingly difficult to attract and retain clients.

Moreover, firms that don’t invest in AI risk losing their top talent. Lawyers, especially younger ones, are increasingly drawn to firms that offer the most advanced tools and the most innovative ways of working. They want to spend their time on intellectually stimulating work, not mundane tasks that could easily be automated. Firms that don’t provide these opportunities will struggle to recruit and retain the best and brightest in the field.

And of course there’s the risk of outright obsolescence. As AI continues to advance, there’s a very real possibility that firms that don’t adapt will simply be unable to compete. They’ll be like Blockbuster in the age of Netflix: a once-dominant player that failed to innovate and was left behind.

For those who may not remember, Blockbuster was once the undisputed king of video rentals. It was the go-to destination for anyone looking to rent a movie. But then came Netflix, with its innovative subscription-based model and its embrace of streaming technology. Suddenly, the very idea of driving to a store to rent a physical DVD seemed antiquated.

Blockbuster, however, was slow to adapt. They were hesitant to change their pricing model as they made a significant amount of money from late fees. They clung to their brick-and-mortar model, even as Netflix’s popularity soared. They introduced their own online rental service, but it was too little, too late. By the time they tried to pivot to streaming, Netflix had already captured the market. In 2010, Blockbuster filed for bankruptcy, and by 2014, all of its stores had closed.

The parallels to the legal industry are striking. For decades, law firms have operated on a model that’s not so different from Blockbuster’s. They’ve relied on manual, time-intensive processes, charging by the hour for work that is often repetitive and routine. They’ve been slow to adopt new technologies, even as other industries have been transformed by digital innovation.

And now, with the rise of AI, law firms are facing their own “Blockbuster moment.” Like Netflix, AI represents a fundamentally different way of operating. It automates routine tasks, freeing up lawyers to focus on higher-value work. It allows for faster, more efficient service delivery. It enables firms to take on more clients and cases without necessarily adding more staff.

The message is clear: resistance is futile, and the cost of staying the same is too high. Firms that want to remain competitive, profitable, and relevant in the coming years must embrace AI. They must be willing to let go of old ways of working and adopt new, more efficient processes.

This doesn’t mean abandoning the human element of legal work. On the contrary, AI is a tool that enhances and empowers human lawyers. It frees them from the drudgery of routine tasks so they can focus on the work that truly requires human Judgement, creativity, and empathy.

But it does mean being open to change. It means investing in the tools and training necessary to harness the power of AI. It means being proactive rather than reactive, and leading the charge rather than being left behind.

The firms that will thrive in the age of AI will be those that embrace change, even when it’s uncomfortable. They’ll be the ones that are willing to rethink old assumptions and reimagine what’s possible. Will your firm be among them? Or will you cling to the status quo until it’s too late?

The choice is yours. But one thing is certain: in the fast-approaching future of legal services, there will be two kinds of firms: those that use AI, and those that wish they had. 

The Blockbuster story is a powerful reminder of the risks of complacency in the face of disruptive change. It’s a cautionary tale for any law firm that’s tempted to dismiss AI as a passing fad or a minor efficiency gain.

What AI Isn’t: The Pitfalls of Superficial Solutions

As the buzz around AI in the legal industry grows, it’s important to cut through the hype and understand what AI really is – and what it isn’t.

In the past year, we’ve seen a proliferation of tech companies offering “AI” solutions for law firms and some adding a basic layer so that their marketing teams can slap a “powered by AI” sticker on their promotions. Many of these are little more than basic chat tools or glorified search engines. They might use some machine learning to improve over time, but they’re not the kind of game-changing, transformative AI that we’re talking about.

True AI – the kind that can revolutionise a law firm’s operations – is much more than just a buzzword. It’s a deeply integrated, end-to-end solution that uses advanced technologies like natural language processing, machine learning, and knowledge representation to automate complex legal tasks.

Take AI Legal Assistant, for example. This isn’t just a tool that helps with document review or contract analysis. It’s a comprehensive platform that can handle a wide range of legal tasks, from research and due diligence to drafting and multi-document analysis. It’s built from the ground up to understand legal language and context, and it gets smarter with every use.

This is the kind of AI that can truly transform a law firm. It’s not just about incremental efficiency gains or marginal cost savings. It’s about fundamentally reimagining the way legal work gets done.

But to achieve this level of transformation, AI can’t just be a bolt-on solution. It needs to be deeply integrated into a firm’s workflows and processes. It needs to be trained on a firm’s specific data and use cases. And it needs to be embraced and leveraged by everyone in the organisation, from senior partners to junior associates.

This is where many law firms fall short. They might invest in an “AI” tool, but they don’t fully integrate it into their operations. They use it for a few narrow tasks, but they don’t leverage its full potential. As a result, they see only marginal benefits, and they conclude that AI is just another overhyped technology.

But this is a mistake. When implemented correctly, AI has the potential to be as transformative for law firms as digital streaming was for the entertainment industry. It can fundamentally change the way legal services are delivered, making them faster, more efficient, and more affordable.

Of course, this kind of transformation doesn’t happen overnight. It requires a significant investment of time, resources, and effort. It requires a willingness to rethink old ways of working and embrace new processes and tools. And it requires a long-term commitment to AI as a core part of the firm’s strategy and operations.

But for firms that are willing to make this investment, the payoff can be enormous. They’ll be able to serve more clients, take on more cases, and deliver better outcomes. They’ll be able to attract top talent and differentiate themselves in an increasingly competitive market. And they’ll be well-positioned to thrive in the AI-powered future of legal services.

So as you evaluate AI solutions for your firm, don’t settle for superficial or piecemeal tools. Look for comprehensive, deeply integrated platforms that can truly transform the way you work.