That’s the question that Nancy B. Rapoport and Joseph R. Tiano, Jr., discussed in Fighting the Hypothetical:  Why Law Firms Should Rethink the Billable Hour in the Generative AI Era.

This article provides a deep analysis, summarized in the abstract (with added blank lines to enhance readability):

As the legal profession continues to grasp the contours of how generative artificial intelligence (GenAI) will change the practice of law, it is already well-versed in many of the ethics issues involved in using GenAI to assist in legal work.

It is significantly less well-versed in the financial effect of GenAI on the standard pyramid model of law firm structure.  That pyramid model, which is based primarily on the billable hour method of compensation, leverages junior associates to perform routine work.  The pyramid narrows with each level of professional performing more sophisticated work:  many associates at the bottom, fewer associates in the middle, and fewer still partners at the top.  But because GenAI currently can perform many tasks at the level of a first-year associate (and will get better at tasks) – in fractions of the time that a first-year associate would take – that pyramid model may no longer make sense.

Our article suggests that law firms should rethink how they measure the value of the work that they deliver to their clients and that such rethinking will likely move many firms away from the pyramid model.  As part of our article, we’ve interviewed several industry leaders who are currently wrestling with the effect of GenAI on their business models.

Ultimately, we suggest that law firms should spend more time on those tasks that require human insight and less time on those tasks that GenAI can do well – and that they should find new ways to capture the value of what they’re doing.  We also offer some thoughts about how law schools should grapple with the GenAI training that law students will need.

The article suggests that GenAI will result in major transformations of the legal industry with significant implications for legal education.  It seems likely that big law firms will sharply reduce the hiring of new associates because GenAI will increasingly perform their tasks much more efficiently.

As a result, new graduates who would otherwise be hired by big firms would compete for jobs in lower strata of the law firm market.  This could mean, in turn, that the legal industry may not be able to absorb as many graduates as law schools now produce.

It also suggests that the graduates who will be hired will need the skills that dispute resolution courses teach – along with the skills needed to work with GenAI.

Here’s the conclusion of the article:

Lawyers should be using their brainpower to focus on those tasks that GenAI simply cannot do well:  use judgment developed over a wide range of experiences;  read body language as part of interviewing witnesses and in negotiations;  use critical thinking to evaluate the work product of others;  speak persuasively while observing nonverbal cues;  and use sparks of creativity that take the law into new directions.

The types of tasks that were mindnumbing to us when we were junior lawyers will not be mind-numbing to GenAI.  If we give those types of tasks to GenAI, we free ourselves up to do the more interesting work that we assumed that all lawyers did back when we enrolled in law school.

GenAI can improve access to justice, making certain types of legal work more affordable to clients, though we also believe that humans need to continue to pay attention to all of the biases and flaws that any computer program may have.

In this brave new world, law firms that don’t adapt will find themselves replaced by law firms that do.  And we applaud those who adapt.  [Footnote omitted.  Blank lines added for readability.]

Take a look.