Marien: Fundamental rethink
Law firms around the world are warning that AI is already leading to a “radical shift” in client expectations, with lower fees top of the list.
Firms should see the technology as “continuous disruption”, not a one-off transformation.
The warning comes from senior leaders at some of the world’s largest firms, such as Hogan Lovells, Herbert Smith Freehills, Baker McKenzie, Bird & Bird, A&O Shearman and White & Case.
The qualitative study – The AI Leadership Challenge in Law – was published yesterday by The Positive Group, a global consultancy specialising in psychology and behaviour change. Researchers conducted 16 in-depth interviews with law firm leaders in the US, US, Singapore, Australia, Hong Kong and Spain.
These highlighted that AI is leading to “a profound and growing tension at the heart of the law firm-client relationship”.
The firms talked about a “double-bind”, with clients demanding greater efficiency and lower costs through the use of AI, but more human oversight and risk management because of the fears around AI.
One senior leader said clients were effectively asking firms to “use AI… but they want everything human-validated, cheaper, and with full liability”.
Will Marien, chief executive of The Positive Group, said: “We are witnessing a fundamental rethink of ‘output’ and ‘value’ at leading law firms. For decades, the billable hour created a linear relationship between effort and worth. AI challenges that.
“Increasingly clients no longer want to pay for the ‘doing’ – the generation of a first draft or the searching of a database – they want to pay for the ‘thinking’.
“This requires a massive psychological shift for law firm leaders who must now re-articulate their value proposition in a world where the commodity – the legal information – is increasingly commoditised.”
The findings reflected that “AI adoption is not primarily a technological challenge, but a deeper shift in how legal work is performed and where expertise creates value”.
The downward pressure on fees was offset by a premium on strategic advice, the report found.
“The ability to challenge automated reasoning, contextualise advice within a client’s specific commercial reality, and exercise ethical judgement in complex ‘grey zones’ remains the primary driver of value.
“For law firm leaders, the challenge is not just technical adoption, but the psychological readiness of their people to act as the ultimate ‘risk-buffer’ for machine-generated content.”
One senior leader questioned this new relationship between man and machine: “The propensity of tech change is almost unlimited. The propensity of humans to change is very limited.”
As well as automating structured legal tasks, AI was playing a growing role in “complex and ambiguous legal work by supporting investigations, litigation strategy and risk analysis by identifying patterns, stress-testing arguments and surfacing alternative perspectives”.
The distinction was therefore “not between work done by AI and work done by lawyers, but how they work together”.
Mr Marien added: “The firms that will thrive in this new era are those that recognise AI as a psychological disruptor as much as a technical one.
“Leadership must move away from three-year roadmaps and toward a state of ‘permanent readiness’. This means fostering a culture where professional judgement is sharpened, not dulled, by automation.
“If a lawyer stops questioning the output because the machine is ‘usually right’, the firm’s value – and its professional safety – disappears. We are seeing the end of the stable planning cycle; strategy is now a live, breathing process of constant recalibration.”
Leaders needed to articulate clearly how AI enhanced, rather than replaced, professional judgement.
Few firms, including the major ones, have integrated AI into their strategy, governance and ways of working, or created the flexibility they need to enable AI to continuously disrupt how they work, the report said.
“AI is not being experienced as a discrete transformation programme with a defined start and end point. Leaders described how initiatives that felt long-term even 18 months ago are already being revised as capabilities rapidly evolve.”
The report concluded that navigating the transition towards AI, and then embracing AI’s continuous disruption, was as much about the human mind as the machine.
“This creates what has been characterised as the jagged frontier: an uneven and constantly shifting boundary between human and machine capability.
“In law, this frontier is particularly difficult to navigate. The distinction between acceptable and unacceptable use of AI is often unclear, shaped by context, risk and professional judgement rather than fixed rules.”
“The firms that succeed will not be those that adopt AI most quickly, but those whose leaders most effectively shape how it is used by aligning technology with professional standards, client expectations and the development of legal expertise.
“These leaders will define what effective legal practice looks like in an AI-enabled profession.”
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