AI and the Future of Legal Services with Richard Susskind

We recently recorded a podcast with Professor Richard Susskind—arguably the most influential thinker on the future of legal services—to talk through his new book, How to Think About AI: A Guide for the Perplexed. What followed was a candid, insight-rich conversation about where the legal industry is heading.

Here are 7 key points about legal AI that Susskind laid out.

1. The short-term impact is overhyped. The long-term impact is underestimated

Susskind opened with a clear-eyed take on AI hype versus reality. “Most of the claims being made about the short term are overstating the impact of AI in law. But most of the claims about the long term are hugely understating its impact.”

Over the next two to three years, Susskind observed, AI will function as a powerful productivity tool—automating much of the workflow lawyers already perform but faster and cheaper. As we move into the 2030s, however, the legal industry needs to think about how the work of lawyers will fundamentally change and even prepare for a reasonable scenario in which AI replaces lawyers altogether.

“Every professional sees far greater scope for AI with professions other than their own. But if you can take out a human and plug in a machine, your job's under threat,” Susskind said.

The legal profession is particularly conservative. But it would be naïve and myopic to think the status quo will continue.

2. Solving legal problems faster is good. Preventing them is better.

How will AI change the nature of legal work, not just enable faster, cheaper workflows?

Susskind offered an analogy from healthcare. When we think of the future of healthcare, we can imagine improvements in disease care like robotic surgery. But what if technology could enable us to avoid surgeries altogether with non-invasive therapy and prevention?

Like traditional healthcare, traditional in-house legal service has always been more reactive than proactive, responding to problems once they’ve arisen. But AI shouldn’t just improve the jobs we’re doing today. It should change the way we think about legal services. For example, legal departments, Susskind said, could become the “fence at the top of the cliff rather than the ambulance at the bottom.”

A more proactive and strategic approach to in-house legal work would be very welcome in organizations. “All the senior executives I speak to in my research prefer problem avoidance rather than problem resolution,” Susskind said. Imagine a future in which AI makes it possible for “agents that can roam around client organization systems and identify early warning signs of problems, difficulties and issues.” That’s a very new way of thinking about the role and value of the in-house legal function.

3. Law firms won’t be competing with each other. They’ll be competing with AI-empowered clients.

"Your biggest competitor in the future will not be another law firm,” Susskind said. “It's more likely the AI-empowered client."

AI empowers people who are not professionals to undertake work that they historically have relied on experts to accomplish. Susskind envisions a world in which AI legal expertise is embedded in normal business operations. Executives and managers will be able to handle routine legal tasks themselves like compliance, contract reviews, and so on.

Empowered by AI, GCs and in-house teams will also have expanded resources and expertise at their fingertips and will no longer need to turn to outside counsel by default.

4. The billable hour is not dead. But the split invoice is coming.

On legal service economics, it will soon be necessary to conceive of billing divided into two parts—the human contribution and the system contribution.

When AI is doing significant portions of the work, charging for human hours becomes increasingly difficult to justify. The underlying economic model is shifting from one where value is created by human labor to one where value derives from the intellectual property in systems and solutions.

The billable hour may still be necessary for some work. As Susskind said, “It is simply not coherent to render the system contribution in terms of six-minute units. That just can’t make sense…. We can still have a debate about whether or not the best way to charge for expert time is through hourly billing. But I don't think there can be a debate, if you are using AI systems, that we have to render our invoice for the use of the systems in some way that accords with the hourly bill. "

For in-house teams, it’s time to recalibrate expectations for price and value.

5. In-house legal should drive legal tech adoption, not law firms.

Susskind observed that there’s an assumption law firms will be leading the way with AI adoption, and that in-house legal departments are looking to see how law firms are investing in this technology. Five years ago that might have been the case; today, the reality is different.

“Some of the most impressive experiments and projects in AI and law are being driven by in-house legal departments without participation by law firms,” Susskind said. “We’re really seeing in-house lawyers grabbing a lot of these systems themselves, experimenting, piloting, using [them] in practice.”

It’s easier than ever for a legal department to take a first cut of a piece of work, then hand to the law firm for review. CJ agreed and mentioned that he’s seen clients do exactly that. Worst case, they’ve wasted a few hours. But the benefits are compelling. “One, it gets you comfortable with the technology,” CJ said. “And then two, it gives you an opportunity to… learn how your law firm will actually respond to a different method of interaction.”

Which gets us to…

6. The relationship between law firms and legal departments is in question. And that’s good for both sides

Some legal departments believe that they’ll no longer need law firms in the long run because they’ll be using AI to conduct many of their own tasks. Others have an expectation that law firms should be turbocharged through the technology and able to provide more comprehensive service.

What’s the reality? It’s important for both sides to be measured and collaborative in figuring out what their relationship will look like going forward.

Law firms prefer that legal departments think that they have everything under control. With AI, many are making big claims all the experimentation and pilots they’re running, and how much know-how they’re gaining. Susskind called that, “AI by press release.”

Susskind advises law firms to develop a thoughtful view on the future impact of AI on their legal services, have frank conversations with clients about that impact, and even do demonstrations. “It’s very helpful to hear from law firms that are using the technology, how are they using it? What benefits are they bringing? How are they measuring the benefits?”

Inevitably that will lead to questions about which party gets the most value from a law firm’s use of AI. Some law firms already argue that their work quality is improving because of AI, so their fees should stay the same. In contrast, legal departments may be looking for price reductions because those enabling technologies allow legal work to be done faster and cheaper.

“Fundamentally,” Susskind said, “this is going to change the nature of the relationship” between legal departments and law firms.” There’s an opportunity to make that relationship stronger and more collaborative if both parties work together in figuring out the best way to manage legal needs in the future.

7. Leaders need to stay on top of current challenges but prepare for a very different future.

“The first task for leadership is to disentangle thinking and planning activity relating to the short term in AI from thinking and planning activity in relation to the long-term,” Susskind said. “The short term is a story of ops. It’s about better operations. And this is something with which most general council are wholly familiar, the idea of running a tighter ship.”

But that doesn’t far enough. As Susskind said, we “need groups of people within major in-house legal departments thinking longer term, thinking about strategy, thinking about the kind of vision I have. And very often in house lawyers will say to me, ‘Well, that's just fanciful. It's speculative. Let's be practical. Let's just get on with today's problems.’ And here I say, and I know this is challenging, this is the difference between managers and leaders in this era. The manager in the in-house legal department is the person who says, ‘Let's worry about the next couple of months. Let's not worry about the future. We'll cope with that when it comes.’… Whereas the leader will say, ‘We're living in a time of unparalleled technological change. We don't know what's going to happen, but we at least need to prepare.’”

Susskind argued that both ways of thinking about AI are important and should happen in parallel, not sequentially.

How different could the future of legal AI be? The centerpiece of Susskind's new book is a call to take Artificial general intelligence (AGI) seriously from a planning scenario. AGI is a hypothetical form of advanced AI that learns, reasons, and applies knowledge at a level of performance matching human intelligence. Its arrival may be uncertain, but the consequences of not preparing for it are massive and a “dereliction of duty among leaders.”

“We're living in a time of unparalleled technological change,” Susskind said. “We don't know what's going to happen, but we at least need to prepare. We need to think it through. We need to contemplate various scenarios. We need to plan.”

Last thoughts: Just use it

Susskind can’t say what that future will look like. “Am I optimistic that the traditional legal function will continue? Probably not. Am I optimistic that there's exciting new jobs for an ambitious strategic legal department? Yes, I am. So very much depends on one's perspective.”

In the meantime, he emphasized the importance of approaching AI in a practical way. Don’t get overwhelmed or paralyzed by it. Just use it.

Stop waiting for pilot program results. Stop delegating the experimentation to someone else in the department. Spend a weekend with the tools—really use them, for work and for life—and see how that changes your worldview.

“I find it rare to speak to someone who has really given the technology a chance, who doesn't think this is going to be transformational in their professional lives.”

Susskind has been studying AI and writing about legal industry transformation for decades. AI has accelerated that transformation dramatically today, making it visible in real time.

“I see a future in which legal services are dominated by and delivered through AI systems,” Susskind said. “The challenge for in-house lawyers is to lead the charge in developing systems that will replace old ways of working.”

As in-house teams lead AI adoption, AI legal counsel can help them develop use policies, assess vendor terms, and address regulatory risks.

Listen to the full conversation on Axiom Insights. Richard Susskind's book, How to Think About AI: A Guide for the Perplexed, is available now.