Professional Services: Law firms not ready to jump headfirst into risky tech

Artificial intelligence continues to make headway into most industries, as C-suite professionals test AI-powered tools’ potential for cost savings and efficiency. Some people are even asking whether the speed of AI could finally kill off the billable hour.

Not so fast, Siri. Clients often are not fans of the hourly billing model, which averaged $370 an hour for associate lawyers and $604 for partners in 2023, but for law firms themselves, this model often makes sense. In an interview with Virginia Business last year, Williams Mullen Chairman, President and CEO Woody Fowler Jr. opined, “Every 10 years, we hear that the billable hour is dead, but it is very resilient.”

Alternative fee agreements certainly exist, and some firms that specialize in individual clients or small business owners find that flat rates bring in more business. But for now, AI tools are not ready to handle nuanced legal work, and any tool that uses publicly available information — including ChatGPT — can’t guarantee confidentiality, a cornerstone of the legal profession. Another issue: Those pesky AI “hallucinations,” which can (and already have) led to embarrassing situations in courtrooms and boardrooms.

In the meantime, law firms are using AI to come up with boilerplate contracts and marketing materials, but many lawyers say they need to check behind the machines before approving documents.

Over the past year, there was plenty of interest in the Federal Trade Commission’s ban on noncompete agreements set to go into effect in September 2024, but a federal judge struck down the ban in August. With President Donald Trump back in office, the federal body is no longer led by Lina Khan, the force behind the ban, as well as antitrust enforcement targeting Amazon, Google, Microsoft and other tech giants.

In December 2024, Trump tapped FTC Commissioner Andrew Ferguson as chair and Mark Meador to fill Ferguson’s vacancy. Ferguson has spoken in favor of Elon Musk’s argument that advertisers who coordinate to pull advertisers from social media platforms — in Musk’s case, X — should be charged with violating antitrust law.

A graduate of the University of Virginia’s School of Law, Ferguson worked for Attorney General Jason Miyares from January 2022 to March 2024 as solicitor general, handling the state’s appellate litigation before the state and U.S. supreme courts, and he was appointed to the FTC in March 2024.

He dissented on the FTC’s rule banning noncompete clauses.

In other news from the past year, the accounting industry is still struggling to hire new CPAs, according to the American Institute of Certified Public Accountants. This isn’t exactly a surprise, as more accountants are retiring and fewer students are entering the industry.

This has led to companies offering higher wages, more flexible work schedules and financial assistance to pass the CPA licensing exam, which takes many people more than one try.

Stephanie Peters, president and CEO of the Virginia Society of CPAs, judged the staffing situation as “critical” but not at crisis level in Virginia. Some of the problem comes down to vibes, Peters said in an interview last year with Virginia Business.

“A major challenge we are working on is the image that the profession is boring. That image isn’t true, and we are trying to counter it with new messaging.”