Teaching an ‘Old Dog’ Profession New Tricks: Economic Model(s) for use of technology in providing legal services in 2025 and beyond

Ask almost any legal professional about applications of modern technology (artificial intelligence (“AI”) and beyond) and you may hear a similar sentiment, a sense of concerned optimism.

Concern about changing client expectations. Concern about modern technology rendering delivery of traditional legal services obsolete. Concern that clients will no longer seek or pay for legal services that once were the bread and butter of attorneys’ practices. Concern that jobs will be eliminated and practices no longer profitable.

On the flip side, there is optimism that new technology will enhance the legal profession. Optimism that more thorough services can be achieved. Optimism that legal services will be more available and cost effective to those who previously could not afford the costs. Optimism that more mundane tasks will be performed by AI and other technology leaving time and mental energy to develop creative solutions and to solve unique problems.

1. Traditional models for charging for legal services include billable hours and fixed fee arrangements and salaried employees .
2. Examples of some legal services that use these billing methods are:
3. Drafting legal documents (e.g., contracts, wills, license agreements, NDAs, etc.)
4. Legal research and memorandum drafting
5. Discovery and litigation tasks (e.g., briefs drafting, interrogatory/document production requests, etc.)
6. Document summaries/synopses
7. New assignment/work intake interviews\Travel expenses for physical meetings, hearings, etc.

Considering these examples and countless others, and thinking about how the legal profession has and is evolving in our post-COVID era, one may ask how many of the legal services and/or tasks are, or will be impacted by technology? AI tools are ever-improving the automation of contract drafting, legal research, memorandum drafting and generation of document summaries and synopses from individual legal cases to whole areas of the law. Video conferencing software like Zoom and Microsoft Teams have made in-person oral hearings in some cases obsolete or significantly curtailed in others.

In view of this, are billable hours or fixed fee arrangements suitable models that outside counsel should use when charging for modern legal services? Should one consider other models for charging for modern legal services?

A first step in this discernment may be to consider the fundamentals of assessing a viable business.

Some of most basic business fundamentals include:

1. What does a customer want and/or need?
2. What is a customer willing to pay?
3. Can I provide that to the customer to cover my costs plus desired profit?

These basic business fundamentals also apply to the legal profession.

What does a client want?

Sometimes it is not so easy to know what a client wants, and clients don’t always know what legal solution they truly need. They might think they want one thing, but after a deeper review, legal professionals often find that a different approach might be more appropriate. This is where legal professionals can add real value – helping clients understand and get what they actually need, not just what they think they want.
For example, legal document drafting software like LegalZoom can be useful—but only if the client is both clear about what they want and correct about what they need. Without professional guidance, there’s a risk that such tools could lead to the wrong outcome.

What is a client willing to pay?

Clients, naturally, want to pay a fair price for services rendered. Clients are willing to pay for things that they find valuable. Therefore, the key here is to add value and have a business model that allows you to charge for the value perceived and received by clients.

Can I provide the client the services to cover my costs with profit?

Once you know what the client wants and you know what the client is willing to pay, you will need to determine your costs with profit to see if you have a viable business model.

New Business Opportunities

Changing technologies and an ever-changing business environment provides opportunities for developing new services. For example, in-house legal departments are downsizing and reducing costs and staff, relying more and more on outside counsel to fill the voids and tasks once done by its internal staff. Some in-house legal departments are now outsourcing tasks that their internal paralegals and administrative assistants once had handled including project management and organization. Some refer to this function as “information integration.”

Understanding your client’s in-house legal department and/or inner workings, allows outside counsel to fill the void left behind after corporate legal department downsizing. Legal practice management tools can assist law firms in providing the client with the needed organization. Monetizing the added new service is key to the legal profession adapting to this changing world.

Alternative Economic Fee Models

I facilitated a roundtable discussion at the 2025 ITechLaw World Conference (attended by over 325 legal and technical professionals from the U.S. and around the world) on the topic of economic models and the use of technology in providing legal services in 2025 and beyond.

The following is a list of just some economic fee models to supplement or act as alternatives to billable hour and fixed fee arrangements discussed during the roundtable interaction and currently being implemented:

1. Subscription for new services (e.g., legal practice management tools and legal analysis tools)
2. Annual flat fixed fee for all legal services provided (analogous to outside counsel acting as de facto in-house counsel with set, fixed legal annual cost)
3. A technology fee for novel legal technology implementation (e.g., legal Software as a Service (SaaS), integration, analysis and organization of information, etc.)

Regardless of a fee model, it will be key that clients understand the value that you are providing them. Often this will require legal service providers (i.e., attorneys) to explain the specific value that they are adding when providing their services.

For example, clients are often very willing and appreciative to pay outside counsel to manage and mitigate risk. However, in order to receive payment, regardless of the billing model, it is important that clients are aware that you (outside counsel) are providing this service (regardless of the technology or tools that outside counsel is using).

Training the Next Generation

Historically, law firms recouped the costs for training new attorneys by billing clients for work done by the new attorneys. Often this work is basic and often time consuming. By doing this work, young attorneys learn and develop their legal aptitude. However, AI is being developed to handle these mundane and time consuming tasks that traditionally were done by first, second, or third year associates and paralegals. If these tasks are no longer being done by young associates, how will law firms recoup the costs for training young attorneys and to develop advanced legal skills?

What economic models accommodate adopting AI and other technology that displaces tasks traditionally used as learning projects for young associates?

Will the legal profession adopt practices of other professions? For example, the medical profession uses a three-year residency program to continue the education of medical school graduates. In the sciences, Ph.D. graduates often take a postdoctoral position after receiving a Ph.D. before entering academia or industry.

Modern technology has the promise of giving legal professionals new tools to provide more value, better quality and quicker services. Discerning how to charge for modern legal services will be key to having a viable legal practice in the future. Efficiencies, enhanced quality and additional value achieved through the implementation of modern technology may be realized in higher billable hour rates, increases or changes in flat fee arrangements or completely new and unique billing models.

Stites & Harbison is committed to implementing the best modern technology when providing legal services to its valued clients. AI and collaborative practice management tools are two examples of novel technology that Stites & Harbison has implemented to serve clients with the highest level of legal services.*
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Disclaimer: All views expressed are exclusively those of the Stephen Weyer and do not reflect the views of Stites & Harbison, PLLC.