The Value Reckoning for In-House Legal
Earlier this year (after admitting AI Bot Claude’s superiority in complex legal analysis) Justice Elena Kagan quipped: “It just seems ridiculous that Claude could do an oral argument…better than I could. I kind of think I’m better than Claude.”
Her remark cuts right to the heart of the identity crisis facing the legal profession.
For half a century, time has been the proxy for value in law. But when AI systems are capable of producing high-quality analysis, drafting contracts, and even simulating oral arguments, that proxy begins to unravel.
In the past, I’ve often talked about how in-house lawyers really have two jobs:
- To provide sound legal and strategic advice to the business.
- To buy and manage legal services on behalf of the business.
True expertise in that second bucket — procurement — is required but has rarely been mastered. Yet it plays a critical role in the GC’s ability to deliver the first. If half or more of your legal budget goes to outside counsel, then how you buy those services directly impacts the quality, speed, and credibility of the advice you give the business.
Now, AI is reshaping both buckets.
The Death Knell of the Billable Hour
The billable hour once served as a tool for transparency: a way to connect effort with price. Over decades, though, time became conflated with value itself. The longer something took, the more it was “worth.”
AI now makes that logic untenable.
When machines can perform document review, research, or drafting in seconds, firms can’t justify pricing based on time. Clients are demanding a new standard: outcomes, predictability, and pricing models that align incentives.
The New Identity of the In-House Lawyer
This reckoning isn’t only for firms. In-house teams are also being measured differently.
No one asks how many hours outside counsel logged. Instead, GCs are judged on how well they enable the business, move quickly, and keep costs defensible.
AI gives GCs new levers — forecasting spend, benchmarking firm performance, and ensuring disciplined sourcing — to meet those expectations. Procurement, in other words, is no longer the “other” job. It’s at the core of proving value.
Beyond Pricing: A Paradigm Shift
This is more than a debate about fees. It’s a paradigm shift.
The measure of success is no longer hours billed, but whether the right result was achieved at the right cost, with the right mix of human and machine resources. The new currencies of value are speed-to-insight, decision quality, and strategic clarity. AI can handle the first draft, but it is still the lawyer’s job to own the judgment, the interpretation, and the ethical responsibility.
AI will not erase the lawyer’s role. But it will make crystal clear what only lawyers can do.
The future of legal is not less human — it’s more intentional. And it will be owned by the lawyers and firms who can redefine value and prove it at scale.
Cheers,
Jim
This post first appeared in TheValue Standard, a bi-weekly newsletter dedicated to helping enterprise legal leaders advance in the new marketplace for legal. Join 4,700+ senior legal leaders who get The Value Standard delivered directly to their inbox.
