A Paradigm Shift:
Serve the Latent Legal Market and Ditch the Billable Hour
Mathew Kerbis, The Subscription Attorney
Joshua Lenon, Lawyer in Residence at Clio
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In this session, you’ll learn:
(1) Implications of AI efficiencies on billing time
(2) Data on the latent legal market and AI+legal services
(3) How to correctly use artificial intelligence for legal services
(4) The most profitable way to ethically bill clients when using AI
Mathew Kerbis Bona Fides:
Launched Subscription Attorney LLC in March of 2022
Using AI since launch (still a daily user)
Using Generative AI since November 2022 when ChatGPT launched
Teaches lawyers how to ethically use AI in law practice
Target market is latent legal market
JOSHUA LENON
Lawyer in Residence
Joshua.lenon@clio.com joshualenon.bsky.social @JoshuaLenon
Part 1
Shifting Paradigm
Bryce Tarling
Staff EWdriittoerr and
Sasha Perrin
Director, Content and Communications
Ardo Illaste
Staff Data Scientist
Emi Zibaei
Brand Designer
Irina Otubela
Marketing Project Manager
Irene O’Brien
Brand Strategist
Simona Mackovichova
Researcher, Customer Insights
Amanda Seigmann
Brand Designer
Kate Rattray
Content Writer
Roger Purcell
Director, Strategic Research
Meggie Javid
VP, Business Operations
Amir Danak
Senior Director, Head of Data and Analytics
Sonal Bihani
Data Scientist
Ally Reeves
Brand Designer
Brandon Lau
Brand Designer
Julia Yaroshinsky
Sociographic Researcher
Vetting and intaking new clients
Latent Legal Market:
According to Grand View Research, approximately $396.80 billion was spent on US legal services in 2024
https://www.grandviewresearch.com/industry-analysis/us-legal-services-market-report
World Justice Project estimates that 77% of US legal issues are unresolved by a lawyer (https://worldjusticeproject.org/)
Only 23% of the market is being served by lawyers
Potential legal market of approximately $1.328 trillion
Probably greater since this is based on most fees being billable hours
Ethical Considerations:
Using AI incorrectly can result in…
Sanctions
Censures
Disbarment
Loss of trust
Ruined reputation
Disengaged clients
and more
Generative AI:
What makes AI generative?
It generates something!
Analysis is not generative but it can be powered by AI
GenAI can revolutionize the practice of law when used correctly
GenAI is not a source of facts or data
YOU are the source of facts or data
It’s not perfect but it’s less prone to error than humans
Retrieval-Augmented Generation:
What is retrieval-augmented generation and why does it matter?
RAG is when Generative AI (GenAI) draws from a specific source of truth when responding to a prompt.
The purpose is to improve the accuracy and relevance of responses.
External knowledge sources include documents, databases, and APIs.
Reduces if not completely eliminates “hallucinations.”
LLMs are not necessarily trained on the sources of truth.
GPT Wrapper:
Provides a user-friendly interface to interact with and utilize LLMs
Sits on top of the core GPT language model, providing a more accessible and purpose-built user experience
Makes it easier for users to leverage the capabilities of GPT models without having to directly interface with the underlying API or complex prompting
Pre-built templates, industry-specific/specialized models, and mechanisms for user feedback to improve the outputs
Simplify user experience and making GPT more accessible
GenAI is like…
The smartest person on the planet
Who is your assistant
Has read everything on the Internet
Works for free
Or for a much lower cost than a human assistant
But they’re an entry level worker
This is their first job
And it’s their first day on the job
And it’s like that every time you start a new conversion with them
GenAI is like…
What would you do?
You’d provide a lot of context
And follow up and iterate on whatever the work product is
You would not give up if they didn’t get it right the first time
Would you trust this assistant as a source of truth?
Of course not!
This assistant is also not socially well adjusted and doesn't know how to say no or ask follow up questions (unless it does as a GPT wrapper)
GenAI is not…
A calculator
2+2=4 is an immutable truth, and once programmed it always gets it right
Language is all made up and the meaning changes with context
GenAI is a probabilistic model guessing the next most likely word
This is why it can never be relied on, on its own, as a source of truth
General Use vs. Legal-Specific AI:
What makes an AI legal-specific?
The vendor will tell you it’s designed for legal.
Is that enough?
No - but’s a good start.
Inputs/uploads/prompts will not train underlying LLMs.
Each user and/or client will have a separate layer/instance from the LLM and can be replicated through the firm or per client.
Higher security for compliance such as with HIPAA/SOC 2.
Company reps cannot access your data or prompt history.
SOC 2 Compliance:
“SOC 2 stands for System and Organization Controls 2. It was created by the American Institute of Certified Public Accountants (AICPA) as a way to help organization’s verify their security and reduce the risk of a security breach. The name relates to which controls are being assessed, which for the case of SOC 2, is an organization's data security controls across their technical system and day-to-day operations.”
-Vanta.com
General Use AI:
Underlying large language models powering the GenAI is training on all documents and prompts put into the tool.
Default typically doesn’t use RAG.
Company can access your prompt history and past uploads.
Less reliable results.
Broader use cases.
Perplexity, NotebookLM Plus (and other Gemini tools), and Descript
Legal AI Categories:
Assistants
Research
Analysis
Database/Knowledge Base
Litigation
Drafting
Intellectual Property
Augmentation
(See end of deck for specific tools)
AI Tips:
Written/spoken natural language is the interface
Follow up, follow up, follow up
Context windows matter
The power of personas
The future is agentic
Non-legal tasks
Client/subscriber benefit
Subscriber benefit is access to models trained on firm data
Internal version for firm team members to use to increase productivity
70%
Over 70% of mid-sized law firmsʼ time entries come from non-lawyers
Part 2
Shifting Billing Models
Hypothetical:
You charge $500/hour
10 hours of billable time makes you $5,000
Generative artificial intelligence can make 10 hours of billable work only take 10 minutes
Under the billable hour in a GenAI world, $5,000 worth of work is only billable at $100
What do you do?
Raise your rates?
Hypothetical:
To make .2 of an hour worth $5,000 means your billable hour rate would be $25,000/hour
That’s a 5,000% increase to your hourly rate (or 50x)
Will your clients be happy to be to pay that rate?
Are you ethically allowed to charge that high of a rate?
What does that mean for serving the latent legal market and access to justice?
What are your options?
The era of the billable hour is over…
Enter the subscription model.
Finally!
ABA Model Rule 1.5:
Terms of Payment
Comment: [5] a lawyer should not enter into an agreement whereby services are to be provided only up to a stated amount when it is foreseeable that more extensive services probably will be required, unless the situation is adequately explained to the client…A lawyer should not exploit a fee arrangement based primarily on hourly charges by using wasteful procedures.
Why the Subscription Model?
Not using AI in your practice means that you are exploiting a fee arrangement based primarily on hourly charges by using wasteful procedures
Adoption of most legaltech eliminates billable hours
Client expectations have changed
Remote meetings are expected
Cost transparency demanded
Easy scheduling is expected
Subscription Model Benefits:
Predictable MRR and ARR
Predictable and transparent pricing for clients
Clients are not afraid to call or contact you
Fosters ongoing relationships with clients
Incentivized to be efficient and effective (adopt technology)
Scale is possible without more hiring
Overcome the labor shortage
Subscription Model Benefits:
Reduced burnout
Improved mental health
Attorneys are rewarded for efficiency
Compete with other industries offering a 4-day work week
Alleviate the need for reregulation (Utah, Arizona, ALSPs)
Increases A2J and attorney bottom-lines
Subscription Model Benefits:
Lifetime Value (LTV) for and from clients
Market opportunity for institutional clients who want to cut costs
Blue ocean market opportunities to clients previously priced out of billable hour and traditionally priced legal services
Competing with LegalZoom but actually providing legal services
Latent legal market
Adapting the Subscription Model:
Pure subscription model
Subscription + flat fees
Subscription add-ons
Practice areas
Transactional
Litigation
Pricing
Pure Subscription Model:
Trademarks: Unlimited C&D; Unlimited attorney-client communications; 3 trademarks searches; 1 trademark filing
Fractional (outside) in-house counsel: employment; contracts; etc.
Document marketplace with optional automation and legal advice
Legal adjacent services (how to comply with probation program)
Subscription + Flat Fee Model:
Corporate formation
Real estate
General transactional
Estate planning
Unbundled services and flat fee add-ons
Litigation
Criminal defense
Pricing Subscriptions:
Keep it simple!
No more than 3 offerings at a time
Give options of different tiers/levels
A low accessible price for the market you are trying to serve
Offer subscription add-ons to lower level subscribers
Bundled services with higher subscription levels should be a discount on a la carte flat fee services and include subscription add-ons
This helps sell the value of higher subscription levels
Pricing Subscriptions:
See my website for examples
I chose $19.99/month to compete with consumer spending on other subscriptions like streaming services and even business tech
I charge $49.99/page for document drafting/analysis
I have 3 buckets and 2 tiers per bucket
I offer my entry level subscription with similar benefits to employers as a benefit to their employees
https://subscriptionattorney.com/#allaccess
Subscription Model Strategies:
Easy unsubscribe and resubscribe
Same account information
Offer a reduction in subscription level, if applicable, to stop churn
Anti-law firm approach
Traditional looking law firm with this model
Trade name firm niching down
Non-English opportunities
Technology you need:
Artificial intelligence
Automate processes
Document automations
Client portal
Online payments
Client relationship manager
Newsletter tool
Scheduling tool
Voice over internet protocol
Secure video calls
Secure document sharing
PDF editor
eSignatures
Knowledge base
(See end of deck for specific tools)
Final Tips:
Look for tools with unlimited usage as part of the subscription
Subscriptions are about scale, so the more clients you sign up makes these tools more than pay for themselves
It’s easier to spend on technology when you know how many subscribers pay for your subscriptions used to power your practice
The same is applicable to any monthly spend (insurance, salaries, etc.)
Look at marketplaces like LawNext, Legaltech Hub, Above the Law
Stop billing time and switch to a more profitable business model
Be transparent with your fees somewhere (agreement/website/portal)
Contact Information:
Mathew Kerbis, The Subscription Attorney
LinkedIn: linkedin.com/in/kerbisverse
Law Firm: subscriptionattorney.com
Legal Podcast: www.lawsubscribed.com
Kids Podcast: www.lawforkidspodcast.com
Course: subscriptionseminar.com
Email: kerbis@lawsubscribed.com
Joshua Lenon, Lawyer in Residence, Clio
LinkedIn: linkedin.com/in/joshualenon
Clio: www.clio.com/clio-home
Guide: www.clio.com/guides
Resources: www.clio.com/resources
Email: joshua.lenon@clio.com
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Legal AI Assistants:
Paxton (proprietary Legal LLM)
LawDroid (customizable)
GC AI (in-house)
Legalyze (practice area agnostic)
Legora, formerly Leya (practice area agnostic)
Centari (transactional)
Eve (litigation focused)
Alexi (litigation focused)
Callidus (litigation focused)
Harvey? (speculation)
Legal Research:
Paxton
Vincent/vLex
CoCounsel
LawDroid
Lexis+AI
Responsiv
Eve AI
Callidus
CaseSnappy
Analysis:
Paxton
Vincent/vLex
CoCounsel
LawDroid
Lexis+AI
Responsiv
Leya
GC AI
LegalOn
SpeedLegal
Robin AI
Legalyze
Lexion
Luminance
eBrevia
Ivo
Kira
LexCheck
Centari
Callidus
The Contract Network
Legalfly
Legl
Sirion
ContractPodAi
ClearyX
MyCase IQ
AffiniPay IQ
Dioptra
Data and In-Firm/House:
Clio Duo
Centari
Leya
Deliberately
Harvery AI
Trellis
Filevine AI
Streamline
Cobalt
Evisort
Lexion
GC AI
Eve AI
Onit
Ontro
Callidus
Legalfly
LawDroid
Checkbox
Legl
Josef Q
ContractPodAi
MyCase IQ
AffiniPay IQ
Amazon Q
Wordsmith
Standd
Litigation:
Parrot
Skribe
Briefpoint
EvenUp
Filevine AI
GenLaw
Alexi
ProPlaintiff
Eve AI
Callidus
LegalMation
CoCounsel
Lexis+AI
RPX Empower
ContractPodAi
Darrow
Steno
eDiscovery AI
AI.Law
Drafting:
Hyperdraft
Paxton
LawDroid
Spellbook
Clearbrief
Leya
Legalyze
Centari
Gavel
The Contract Network
Callidus
Legalfly
Henchman
ContractPodAi
Intellectual Property:
Patented AI
Huski
Tradespace
Solve Intelligence
RPX Empower
Patsnap
Augmentation:
Screens AI (acquired by Agiloft)
Gavel (formerly Documate)
PatternBuilder (NetDocs)
Josef Q
SixFifty
Automation Tech:
Gavel (formerly Documate) (a Law Subscribed sponsor)
SixFifty (a Law Subscribed sponsor)
Legal Karma (estate planning)
IICLE’s Formulaw
PatternBuilder (formerly AfterPattern before NetDocs acquisition)
GenAI (Large Language Models)
eDiscovery (Machine Learning + LLMs)
Client Portal Tech:
LegalTech
Fidu
Rally
Clio
MyCase
PracticePanther
Smokeball
Filevine
Non-LegalTech
SuiteDash
Outseta
Copilot
Clinked
SmartVault
Wordpress plugins:
WooCommerce
MemberMouse
Client-Portal.io
Many more…
Online Payments Tech:
Stripe
Recurly
Chargebee
Chargify
ProfitWell
Paddle
Braintree
Trust Accounting Options
Confido Legal
LawPay
QuickBooks
Scheduling Tech:
Calendly
Hubspot
Acuity
Google Appointments
Microsoft Bookings
Newsletter Tech:
Substack (can also publish video podcasts)
Beehiiv
Brevo
Mailchimp
Hubspot
Constant Contact
Built-in with CRM or client portal
CRM Tech:
Microsoft Excel
Google Sheets
SuiteDash
Hubspot
Clio Grow
Lawmatics
Other client portals
VoIP Tech:
Google Voice
OpenPhone
Zoom
GoToConnect
RingCentral
Secure Video Tech:
Zoom
Microsoft Teams
Google Meet
GoTo Meeting
Webex
Secure Document Sharing Tech:
Google Docs via paid Google Workspace account
Microsoft Sharepoint/OneDrive
Dropbox
Box
Client portal feature (i.e., SuiteDash)
PDFs and eSignatures Tech:
Adobe Acrobat Pro (both)
Google Workspace Business
Power PDF
DocuSign
DocHub
Client portal feature
Knowledge Base Tech:
Notion (GenAI integration lets you query against it)
NotebookLM (Google Gemini)
Zoho Desk
Zendesk
Wordpress plugins
Google Docs via Workspace
Microsoft Sharepoint
Client portal feature (Fidu)
Integrations Tech:
Zapier
Make (formerly, Integromat)
IFTTT (If This Then That)
Hubspot
Stripe (or alternative)
Client portal feature