Source: Above the Law
A new ACC and Everlaw study reveals a bizarre disconnect in legal services. While 67% of in-house lawyers use GenAI (up from 38% last year), 80% aren’t requiring or even encouraging their outside counsel to do the same.
The numbers tell a stark story: 91% of in-house users report efficiency gains from AI. Yet 59% don’t even know if their law firms use it on their matters. Of firms claiming to use AI, 59% of clients see no change in bills.
The Paradox
In-house counsel are experiencing AI’s benefits daily but won’t demand the same from firms they’re paying millions. Why?
They hired outside lawyers for expertise they lack internally, so they’re reluctant to dictate methods. There’s also fear. Outside counsel are masters at painting disaster scenarios: “AI could doom your case” (unsaid: and that’s on you). Or the classic: “We’d need to check everything, so it’ll cost you more anyway.”
43% of respondents bought this argument. They shouldn’t have.
The Reckoning
Stephen Embry puts it bluntly: this disconnect can’t last. In-house lawyers are seeing what AI can do. They’re doing work internally that once went to firms. Soon they’ll realise they’re essentially paying for “delivery by horse and buggy when they know there’s a better way.”
64% already expect to rely less on outside counsel because of AI. 24% are very likely to push for changes to the billable hour. These aren’t distant threats. They’re imminent realities.
What Firms Miss
Law firms might read these statistics and think they can stay “fat, dumb and happy,” as Embry puts it. After all, if 80% of clients aren’t demanding change, why bother?
Because clients’ tolerance has limits. They’re learning what’s possible. They’re seeing efficiency gains. Eventually, they’ll vote with their feet, flocking to what Zach Abramowitz calls “AI-first firms” that practice at a fraction of traditional time and cost.
The Reality Check
The gap between in-house AI adoption (67%) and their demands on firms (20%) is unsustainable. It’s like continuing to use Amazon if they delivered by horse whilst FedEx used planes.
Kate Zabriskie’s quote opening Embry’s piece captures it perfectly: “The customer’s perception is your reality.” In-house lawyers’ perception is shifting rapidly. They know what’s possible. They’re just not demanding it yet.
That “yet” is doing heavy lifting. When it drops, firms clinging to old models won’t just lose competitive advantage. They’ll lose clients.
The message for firms is clear: your clients are about to wake up. You’d better wake up first, or your competition will eat you alive.Retry
Read more: Above the Law
