As you may have heard, the legal profession stands at (insert “dun dun dun” for effect...) for an inflection point. And while many, maybe you, worry that artificial intelligence will commoditize legal services and erode law firm profitability, the most forward-thinking firms are recognizing a different truth: AI isn't a threat to their business model—it's the key to transforming it entirely. To be among the few Netflixes in a world of Blockbusters.
And those winners won't be those who use AI to work faster. They'll be the firms that follow the playbook of today's most dominant tech companies, transforming their expertise and specialized resources into scalable, premium services that reach far beyond the scope of their existing clientele and addressable markets.
Two Big Tech Examples
Think, for a minute, about Amazon Web Services. What started as an internal resource to its parent company now powers half of the internet. And it started with the thought: what if all this excess cloud computing we built for holiday shopping surges could be made available to others at scale?
CoreWeave, the highest profile IPO of the year, followed a strikingly similar pattern. What began as a cryptocurrency mining operation using GPU chips became a $40 billion AI cloud-computing powerhouse. When crypto crashed in 2018, CoreWeave packaged its GPU processing capabilities and delivered them at scale through the cloud.
The pattern is unmistakable: take what you already have, reimagine how to deliver it, and scale relentlessly. This playbook isn't limited to tech—it's becoming the defining competitive advantage across industries, including legal.
The Legal Industry's Transformation
Law firms possess a comparable opportunity. Whether through specialized knowledge bases, repeatable processes, or institutional expertise, firms can convert existing assets into scalable services using AI tools like Harvey AI and, for corporate teams, GC AI. These platforms enable firms to package and deliver their expertise far beyond what traditional service models allow.
The question isn't whether this transformation will happen—it's which firms will execute it successfully.
Why Size Doesn't Determine the Winner
The advantage doesn't automatically accrue to the largest firms. According to research conducted with ten AmLaw100 firms and published by Harvard Law School, large firms are experiencing productivity gains exceeding 100 times in certain applications. In high-volume litigation, complaint response systems have reduced associate time from 16 hours to 3-4 minutes. However, these same large firms face structural challenges that smaller, more nimble competitors don't. The Harvard research revealed that some firms acknowledged their staffing models won't change "without generational replacement." This institutional inertia creates openings for smaller firms willing to restructure more aggressively around AI capabilities.
Mid-sized and boutique firms often demonstrate greater willingness to experiment with new technologies and business models. They can pivot faster, test alternative pricing structures more readily, and build AI-native practices without the burden of legacy systems and entrenched partnerships. Thomson Reuters research supports this dynamic, finding that among firms with up to 100 employees, AI adoption is driving significant changes in how legal work gets delivered.
The competitive landscape is flattening. Tools like CoCounsel for legal research or Luminance for contract review are available to firms of any size, democratizing access to sophisticated AI capabilities that were previously out of reach.
The Revenue Model Evolution
Contrary to fears that AI would destroy traditional revenue models, the Harvard research found that the billable hour remains surprisingly resilient. Client expectations are shifting, but not in the direction many predicted. Clients aren't necessarily expecting reduced costs but rather quicker responses and higher quality service.
This finding aligns with Thomson Reuters data showing that 59% of legal professionals believe AI helps deliver greater value by handling large volumes of legal data more effectively, while 41% see improved client response times as a key benefit.
More significantly, 53% of organizations already report positive ROI from AI investments. The firms capturing this value are those positioning AI not as a cost-cutting tool but as a capability enhancer that justifies premium pricing.
The Harvard research revealed another counterintuitive finding: none of the interviewed AmLaw100 firms anticipate reducing attorney headcount due to AI. Instead, they're expanding into adjacent services previously considered too low-margin. Approximately 50% of firms interviewed said they would consider adding work to their portfolios if AI tools allowed them to do it more efficiently.
The Competitive Advantage: Methodology and Differentiation
The firms winning this transformation share a critical characteristic: they're developing proprietary methodologies where AI integrates with institutional knowledge. The Harvard study found that about one-third of firms have practice methodologies in place which AI tools will enhance. This differentiation matters enormously. Every firm won't have the same processes, AI tools, or knowledge databases—creating meaningful distinctions in a market traditionally commoditized by hourly billing. Smaller firms with specialized practices can leverage this dynamic particularly effectively, using AI to compete against larger generalist firms on quality and responsiveness rather than breadth alone.
Thomson Reuters research indicates that lawyers will need to develop new capabilities, with 71% of respondents expecting increased demand for adaptability, 56% for problem-solving, and 53% for creativity. These skills favor firms that can move quickly and think strategically, regardless of size.
The Path Forward
The legal services market is becoming simultaneously more competitive and more lucrative. The firms that will dominate—whether large, mid-sized, or boutique—won't be those that use AI to do the same work cheaper. They'll be the firms that use AI to scale their expertise, reach new markets, command premium pricing, and redefine what legal services can accomplish.
The tech playbook has shown the way: convert internal assets into scalable services, differentiate through proprietary capabilities, and capture value at scale. Size provides advantages, but nimbleness and strategic vision matter more.
The only question is which law firms will have the courage to follow it.
