Another week, another study demonstrating the gap between what in-house legal professionals want from their outside law firms and what they\u2019re getting when it comes to innovation and technology. Despite all the AI talk, we aren\u2019t there yet.<\/p>\n
This time,\u00a0the\u00a0study was\u00a0interestingly\u00a0from a law firm. Thompson\u00a0Hine<\/a>,\u00a0an Am Law 200 midwestern-based law\u00a0firm, conducted\u00a0the\u00a0study<\/a>\u00a0of almost 200 senior\u00a0in-house\u00a0legal professionals\u00a0to\u00a0look at how\u00a0they\u00a0were embracing innovation.\u00a0<\/p>\n The study, entitled\u00a0Bridging the Perception Gap-Disconnects, Expectations and Opportunities<\/em>,\u00a0also focused on\u00a0how\u00a0in house\u00a0legal\u00a0perceived their law firms were doing. \u00a0<\/p>\n This is the fourth such study that Thompson\u00a0Hine has conducted.\u00a0Thompson\u00a0Hine partnered with\u00a0Corporate Counsel<\/a>\u00a0to conduct\u00a0it.<\/p>\n A\u00a0Disconnect<\/strong><\/p>\n As the title suggests, the study found some pretty glaring disconnects. \u00a0Only 5% of those surveyed said\u00a0they saw a great deal of innovation from their law\u00a0firms. That\u00a0percentage\u00a0was\u00a0the same in 2023 and an increase of\u00a0only\u00a0two percentage points since\u00a02020.\u00a0That\u00a0ain\u2019t\u00a0much progress.<\/p>\n And here is the first\u00a0disconnect. When asked how much innovation their firms claim,\u00a0the respondents said\u00a020% of\u00a0 them are\u00a0actually\u00a0claiming\u00a0to be greatly\u00a0innovative.\u00a0<\/p>\n Why\u00a0the Gap?<\/strong><\/p>\n As someone once told me, \u201cThere are firms that want to be innovative and there are firms that want to say they are innovative.\u201d Quite simply,\u00a0firms are often telling clients what they\u00a0think\u00a0they want to hear when it comes to innovation.\u00a0Some firms are content to say we did innovation,\u00a0pat themselves on the back,\u00a0and check the box.\u00a0<\/p>\n Just like back in the early days of converting to computers, there were firms that bought desktops for all lawyers just for the optics when clients visited, even if no one knew\u00a0how to use them.<\/p>\n Then there is a\u00a0definition\u00a0problem.\u00a0In-house\u00a0legal professionals are interested in\u00a0innovation and technology\u00a0to\u00a0help them\u00a0get\u00a0more\u00a0work\u00a0done\u00a0faster\u00a0and\u00a0more\u00a0efficiently.\u00a0Law firms\u2019\u00a0interest in\u00a0innovation and technology\u00a0is\u00a0often\u00a0limited to\u00a0reducing\u00a0non-billable hours or\u00a0marketing.\u00a0When a law firm\u00a0says\u00a0it\u2019s innovative, it may not be innovative in a way that\u00a0resonates\u00a0with in-house.\u00a0<\/p>\n In addition, note that only 16% of those surveyed said\u00a0their outside firms\u00a0were superior to\u00a0in-house\u00a0legal departments when it came to innovation.\u00a0Only 3% said their outside\u00a0law firms\u00a0were supplying\u00a0them\u00a0with\u00a0all of\u00a0the innovation needed.\u00a0<\/p>\n Think about that.\u00a0Law firms are often smaller. They\u00a0operate\u00a0in practice groups. This should make them\u00a0more nimble\u00a0than the\u00a0large corporations\u00a0they serve.\u00a0<\/p>\n Moreover,\u00a0law firms are service providers. You\u2019d think they\u2019d want to\u00a0be ahead of\u00a0their customers in innovation to provide better service,\u00a0not behind.<\/p>\n We see the same thing with attitudes toward things like AI.\u00a0Twenty-three percent of the in-house folks say AI has come\u00a0a\u00a0long\u00a0way and should be used\u00a0versus 18% of the outside lawyers. Outside lawyers are more concerned about accuracy and privacy than\u00a0in-house.\u00a0This gap\u00a0squares\u00a0with\u00a0the\u00a0findings\u00a0of the\u00a0Association\u00a0of Corporate Counsel<\/a>\u00a0(ACC)\u00a0which I\u00a0reported<\/a>\u00a0last week.\u00a0That\u00a0survey<\/a>\u00a0found that\u00a0use of AI\u00a0in-house\u00a0had grown\u00a0to\u00a0close to 70%.<\/p>\n Why the Gap, Part Two<\/strong><\/p>\n So why aren\u2019t law firms interested in using things like innovation and AI to provide better service? First and foremost, the billable hour model\u00a0limits\u00a0robust innovation and\u00a0use of\u00a0technology. Adoption of innovative\u00a0techniques\u00a0and things like AI\u00a0inevitability\u00a0impact the billable hour and law firms know it.\u00a0<\/p>\n Secondly, the consensus decision-making process engaged by most law firms\u00a0further inhibits adoption. The\u00a0partnership\u00a0model all\u00a0too\u00a0often results in too many decision makers,\u00a0any\u00a0one of which can say no loudly and long enough to have an impact. Add to the fact that lawyers are skeptical and\u00a0independent\u00a0by nature\u00a0and you get\u00a0delay and often blindness\u00a0to innovation.\u00a0<\/p>\n Add this all up and it\u2019s not a good look for outside lawyers. But they aren\u2019t completely to blame.<\/p>\n So,\u00a0It\u2019s\u00a0Easy to\u00a0Blame\u00a0Outside\u00a0Lawyers?<\/strong><\/p>\n At first blush, it\u2019s easy to blame outside law firms for\u00a0dragging their feet when it comes to innovation and technology. But there is something else at work which\u00a0makes it easy for firms to safely and blissfully\u00a0maintain the status quo\u00a0and\u00a0not rush to innovate and adopt technology to provide\u00a0better\u00a0service. In-house\u00a0legal professionals\u00a0just aren\u2019t demanding change.\u00a0In fact, they\u00a0reward their firms for the status quo.<\/p>\n We see this with the\u00a0Thompson\u00a0Hine findings:\u00a0despite\u00a0the fact that\u00a093% of the survey\u00a0respondents\u00a0say innovation is\u00a0crucial\u00a0or at least important in selecting firms,\u00a0they\u00a0apparently\u00a0are\u00a0content with\u00a0seeing\u00a0a great deal of innovation from\u00a0only\u00a05% of their firms.<\/p>\n We saw a similar gap in the ACC Study: 59% of those in-house\u00a0legal\u00a0professionals\u00a0didn\u2019t know if their firms were using technology on their legal matters and 80%\u00a0were not demanding or even encouraging their outside lawyers to use GenAI.<\/p>\n To paraphrase\u00a0an\u00a0earlier observation: there are legal\u00a0departments that are demanding innovation and there are legal departments who want to\u00a0say they are demanding\u00a0innovation.<\/p>\n What Is In-House Legal Rewarding?<\/strong><\/p>\n Which\u00a0brings me to\u00a0another\u00a0recent\u00a0study<\/a>, this one by\u00a0Thomson Reuters<\/a>\u00a0of law firm rates which\u00a0it\u00a0conducted.\u00a0Based on the findings, the study\u2019s\u00a0conclusion\u00a0says it\u00a0all:<\/p>\n The legal profession has achieved what most industries can only imagine: The ability to raise prices year after year, with clients consistently agreeing to pay more. Over the past decade, law firms have pushed rates at twice (or more) the rate of inflation, and 2025 is no exception \u2014 worked rates are up 7.4% compared to just a 2.8% inflation rate. This isn\u2019t just a routine cost-of-living adjustment, rather it\u2019s a demonstration of genuine pricing power that has fundamentally reshaped how legal services firms generate revenue.<\/p>\n To be fair, the\u00a0study\u00a0also\u00a0suggests that this gravy train may soon be ending\u00a0due to a variety of factors. That may be true, although that sounds a little like the \u201cdeath of the billable hour\u201d that has been predicted as long as I have been practicing law. It hasn\u2019t happened yet.<\/p>\n Mind the Gap<\/strong><\/p>\n Here is the simple fact: unless and until clients demand change by their outside law firms,\u00a0it\u2019s\u00a0not going to happen.\u00a0And why should\u00a0it?\u00a0Law firms, particularly large ones, are making way\u00a0too\u00a0much money to change. Their clients aren\u2019t\u00a0pushing them to change and reward them year over year with\u00a0large\u00a0rate increases.<\/p>\n Part of the reason for all this is\u00a0in-house\u00a0lawyers are still lawyers. They have the same reluctance to change and\u00a0skepticism\u00a0as those in their\u00a0outside firms from which many\u00a0of them\u00a0came. Part of it is because the practice of law is still\u00a0relational:\u00a0in-house\u00a0legal professionals\u00a0trust and rely on their outside lawyers. They\u00a0are\u00a0reluctant\u00a0to tamper with their\u00a0law firms\u2019 business and perceived needs.\u00a0Plus,\u00a0legal department budgets are\u00a0often relatively small\u00a0when compared to\u00a0that of\u00a0the overall business.\u00a0<\/p>\n And\u00a0just\u00a0like\u00a0in-house\u00a0legal professionals\u00a0rely on and trust outside lawyer for their expertise, the business must trust and rely on the legal department\u2019s advice and\u00a0expertise.\u00a0<\/p>\n Want Change? Demand It<\/strong><\/p>\n So\u00a0we all bump along singing\u00a0a\u00a0Kumbaya\u00a0innovation song but\u00a0with little\u00a0really\u00a0changing\u00a0at\u00a0many\u00a0law firms.\u00a0In-house whines; law firms make\u00a0changes in name only.\u00a0Is it about to change with the advent of GenAI and agentic AI? Not unless clients\u00a0make it so.<\/p>\n Perhaps it\u2019s\u00a0time\u00a0for in-house legal to\u00a0have\u00a0a gut check\u00a0with their outside counsel.\u00a0Or simply vote with their feet. One thing that\u2019s not going to effectuate change is\u00a0continuing to\u00a0do\u00a0nothing.\u00a0<\/p>\n And\u00a0the next time\u00a0in-house\u00a0counsel complains about their outside lawyers, perhaps\u00a0remind them to mind the gap.<\/p>\n Stephen Embry is a lawyer, speaker, blogger, and writer. He publishes\u00a0TechLaw Crossroads<\/a>, a blog devoted to the examination of the tension between technology, the law, and the practice of law<\/strong><\/em>.<\/p>\n The post Mind The Gap: Why In-House Counsel\u00a0Often Don\u2019t See\u00a0The Innovation They\u00a0Want\u00a0From\u00a0Law Firms<\/a> appeared first on Above the Law<\/a>.<\/p>\n Another week, another study demonstrating the gap between what in-house legal professionals want from their outside law firms and what they\u2019re getting when it comes to innovation and technology. Despite all the AI talk, we aren\u2019t there yet.<\/p>\n This time,\u00a0the\u00a0study was\u00a0interestingly\u00a0from a law firm. Thompson\u00a0Hine<\/a>,\u00a0an Am Law 200 midwestern-based law\u00a0firm, conducted\u00a0the\u00a0study<\/a>\u00a0of almost 200 senior\u00a0in-house\u00a0legal professionals\u00a0to\u00a0look at how\u00a0they\u00a0were embracing innovation.\u00a0<\/p>\n The study, entitled\u00a0Bridging the Perception Gap-Disconnects, Expectations and Opportunities<\/em>,\u00a0also focused on\u00a0how\u00a0in house\u00a0legal\u00a0perceived their law firms were doing. \u00a0<\/p>\n This is the fourth such study that Thompson\u00a0Hine has conducted.\u00a0Thompson\u00a0Hine partnered with\u00a0Corporate Counsel<\/a>\u00a0to conduct\u00a0it.<\/p>\n A\u00a0Disconnect<\/strong><\/p>\n As the title suggests, the study found some pretty glaring disconnects. \u00a0Only 5% of those surveyed said\u00a0they saw a great deal of innovation from their law\u00a0firms. That\u00a0percentage\u00a0was\u00a0the same in 2023 and an increase of\u00a0only\u00a0two percentage points since\u00a02020.\u00a0That\u00a0ain\u2019t\u00a0much progress.<\/p>\n And here is the first\u00a0disconnect. When asked how much innovation their firms claim,\u00a0the respondents said\u00a020% of\u00a0 them are\u00a0actually\u00a0claiming\u00a0to be greatly\u00a0innovative.\u00a0<\/p>\n Why\u00a0the Gap?<\/strong><\/p>\n As someone once told me, \u201cThere are firms that want to be innovative and there are firms that want to say they are innovative.\u201d Quite simply,\u00a0firms are often telling clients what they\u00a0think\u00a0they want to hear when it comes to innovation.\u00a0Some firms are content to say we did innovation,\u00a0pat themselves on the back,\u00a0and check the box.\u00a0<\/p>\n Just like back in the early days of converting to computers, there were firms that bought desktops for all lawyers just for the optics when clients visited, even if no one knew\u00a0how to use them.<\/p>\n Then there is a\u00a0definition\u00a0problem.\u00a0In-house\u00a0legal professionals are interested in\u00a0innovation and technology\u00a0to\u00a0help them\u00a0get\u00a0more\u00a0work\u00a0done\u00a0faster\u00a0and\u00a0more\u00a0efficiently.\u00a0Law firms\u2019\u00a0interest in\u00a0innovation and technology\u00a0is\u00a0often\u00a0limited to\u00a0reducing\u00a0non-billable hours or\u00a0marketing.\u00a0When a law firm\u00a0says\u00a0it\u2019s innovative, it may not be innovative in a way that\u00a0resonates\u00a0with in-house.\u00a0<\/p>\n In addition, note that only 16% of those surveyed said\u00a0their outside firms\u00a0were superior to\u00a0in-house\u00a0legal departments when it came to innovation.\u00a0Only 3% said their outside\u00a0law firms\u00a0were supplying\u00a0them\u00a0with\u00a0all of\u00a0the innovation needed.\u00a0<\/p>\n Think about that.\u00a0Law firms are often smaller. They\u00a0operate\u00a0in practice groups. This should make them\u00a0more nimble\u00a0than the\u00a0large corporations\u00a0they serve.\u00a0<\/p>\n Moreover,\u00a0law firms are service providers. You\u2019d think they\u2019d want to\u00a0be ahead of\u00a0their customers in innovation to provide better service,\u00a0not behind.<\/p>\n We see the same thing with attitudes toward things like AI.\u00a0Twenty-three percent of the in-house folks say AI has come\u00a0a\u00a0long\u00a0way and should be used\u00a0versus 18% of the outside lawyers. Outside lawyers are more concerned about accuracy and privacy than\u00a0in-house.\u00a0This gap\u00a0squares\u00a0with\u00a0the\u00a0findings\u00a0of the\u00a0Association\u00a0of Corporate Counsel<\/a>\u00a0(ACC)\u00a0which I\u00a0reported<\/a>\u00a0last week.\u00a0That\u00a0survey<\/a>\u00a0found that\u00a0use of AI\u00a0in-house\u00a0had grown\u00a0to\u00a0close to 70%.<\/p>\n Why the Gap, Part Two<\/strong><\/p>\n So why aren\u2019t law firms interested in using things like innovation and AI to provide better service? First and foremost, the billable hour model\u00a0limits\u00a0robust innovation and\u00a0use of\u00a0technology. Adoption of innovative\u00a0techniques\u00a0and things like AI\u00a0inevitability\u00a0impact the billable hour and law firms know it.\u00a0<\/p>\n Secondly, the consensus decision-making process engaged by most law firms\u00a0further inhibits adoption. The\u00a0partnership\u00a0model all\u00a0too\u00a0often results in too many decision makers,\u00a0any\u00a0one of which can say no loudly and long enough to have an impact. Add to the fact that lawyers are skeptical and\u00a0independent\u00a0by nature\u00a0and you get\u00a0delay and often blindness\u00a0to innovation.\u00a0<\/p>\n Add this all up and it\u2019s not a good look for outside lawyers. But they aren\u2019t completely to blame.<\/p>\n So,\u00a0It\u2019s\u00a0Easy to\u00a0Blame\u00a0Outside\u00a0Lawyers?<\/strong><\/p>\n At first blush, it\u2019s easy to blame outside law firms for\u00a0dragging their feet when it comes to innovation and technology. But there is something else at work which\u00a0makes it easy for firms to safely and blissfully\u00a0maintain the status quo\u00a0and\u00a0not rush to innovate and adopt technology to provide\u00a0better\u00a0service. In-house\u00a0legal professionals\u00a0just aren\u2019t demanding change.\u00a0In fact, they\u00a0reward their firms for the status quo.<\/p>\n We see this with the\u00a0Thompson\u00a0Hine findings:\u00a0despite\u00a0the fact that\u00a093% of the survey\u00a0respondents\u00a0say innovation is\u00a0crucial\u00a0or at least important in selecting firms,\u00a0they\u00a0apparently\u00a0are\u00a0content with\u00a0seeing\u00a0a great deal of innovation from\u00a0only\u00a05% of their firms.<\/p>\n We saw a similar gap in the ACC Study: 59% of those in-house\u00a0legal\u00a0professionals\u00a0didn\u2019t know if their firms were using technology on their legal matters and 80%\u00a0were not demanding or even encouraging their outside lawyers to use GenAI.<\/p>\n To paraphrase\u00a0an\u00a0earlier observation: there are legal\u00a0departments that are demanding innovation and there are legal departments who want to\u00a0say they are demanding\u00a0innovation.<\/p>\n What Is In-House Legal Rewarding?<\/strong><\/p>\n Which\u00a0brings me to\u00a0another\u00a0recent\u00a0study<\/a>, this one by\u00a0Thomson Reuters<\/a>\u00a0of law firm rates which\u00a0it\u00a0conducted.\u00a0Based on the findings, the study\u2019s\u00a0conclusion\u00a0says it\u00a0all:<\/p>\n The legal profession has achieved what most industries can only imagine: The ability to raise prices year after year, with clients consistently agreeing to pay more. Over the past decade, law firms have pushed rates at twice (or more) the rate of inflation, and 2025 is no exception \u2014 worked rates are up 7.4% compared to just a 2.8% inflation rate. This isn\u2019t just a routine cost-of-living adjustment, rather it\u2019s a demonstration of genuine pricing power that has fundamentally reshaped how legal services firms generate revenue.<\/p>\n To be fair, the\u00a0study\u00a0also\u00a0suggests that this gravy train may soon be ending\u00a0due to a variety of factors. That may be true, although that sounds a little like the \u201cdeath of the billable hour\u201d that has been predicted as long as I have been practicing law. It hasn\u2019t happened yet.<\/p>\n Mind the Gap<\/strong><\/p>\n Here is the simple fact: unless and until clients demand change by their outside law firms,\u00a0it\u2019s\u00a0not going to happen.\u00a0And why should\u00a0it?\u00a0Law firms, particularly large ones, are making way\u00a0too\u00a0much money to change. Their clients aren\u2019t\u00a0pushing them to change and reward them year over year with\u00a0large\u00a0rate increases.<\/p>\n Part of the reason for all this is\u00a0in-house\u00a0lawyers are still lawyers. They have the same reluctance to change and\u00a0skepticism\u00a0as those in their\u00a0outside firms from which many\u00a0of them\u00a0came. Part of it is because the practice of law is still\u00a0relational:\u00a0in-house\u00a0legal professionals\u00a0trust and rely on their outside lawyers. They\u00a0are\u00a0reluctant\u00a0to tamper with their\u00a0law firms\u2019 business and perceived needs.\u00a0Plus,\u00a0legal department budgets are\u00a0often relatively small\u00a0when compared to\u00a0that of\u00a0the overall business.\u00a0<\/p>\n And\u00a0just\u00a0like\u00a0in-house\u00a0legal professionals\u00a0rely on and trust outside lawyer for their expertise, the business must trust and rely on the legal department\u2019s advice and\u00a0expertise.\u00a0<\/p>\n Want Change? Demand It<\/strong><\/p>\n So\u00a0we all bump along singing\u00a0a\u00a0Kumbaya\u00a0innovation song but\u00a0with little\u00a0really\u00a0changing\u00a0at\u00a0many\u00a0law firms.\u00a0In-house whines; law firms make\u00a0changes in name only.\u00a0Is it about to change with the advent of GenAI and agentic AI? Not unless clients\u00a0make it so.<\/p>\n Perhaps it\u2019s\u00a0time\u00a0for in-house legal to\u00a0have\u00a0a gut check\u00a0with their outside counsel.\u00a0Or simply vote with their feet. One thing that\u2019s not going to effectuate change is\u00a0continuing to\u00a0do\u00a0nothing.\u00a0<\/p>\n And\u00a0the next time\u00a0in-house\u00a0counsel complains about their outside lawyers, perhaps\u00a0remind them to mind the gap.<\/p>\n Stephen Embry is a lawyer, speaker, blogger, and writer. He publishes\u00a0TechLaw Crossroads<\/a>, a blog devoted to the examination of the tension between technology, the law, and the practice of law<\/strong><\/em>.<\/p>\n The post Mind The Gap: Why In-House Counsel\u00a0Often Don\u2019t See\u00a0The Innovation They\u00a0Want\u00a0From\u00a0Law Firms<\/a> appeared first on Above the Law<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":" Another week, another study demonstrating the gap between what in-house legal professionals want from their outside law firms and what they\u2019re getting when it comes to innovation and technology. Despite all the AI talk, we aren\u2019t there yet. This time,\u00a0the\u00a0study was\u00a0interestingly\u00a0from a law firm. Thompson\u00a0Hine,\u00a0an Am Law 200 midwestern-based law\u00a0firm, conducted\u00a0the\u00a0study\u00a0of almost 200 senior\u00a0in-house\u00a0legal professionals\u00a0to\u00a0look […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[16],"tags":[],"class_list":["post-136699","post","type-post","status-publish","format-standard","hentry","category-above_the_law"],"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts\/136699","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/comments?post=136699"}],"version-history":[{"count":0,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/posts\/136699\/revisions"}],"wp:attachment":[{"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/media?parent=136699"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/categories?post=136699"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/xira.com\/p\/wp-json\/wp\/v2\/tags?post=136699"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
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