I went to a closed-door retreat for top lawyers. The message was clear: Don't fear AI — use it.

Recently, a select group of law firm executives and legal technology innovators convened at an exclusive retreat in Austin to explore the evolving role of artificial intelligence in the legal sector. The central focus was not merely on whether to adopt AI, but rather on the strategies for its procurement and funding. Hosted by The Legal Tech Fund, the TLTF Summit spanned three days, resembling the industry's elite version of the Sun Valley Conference. This year’s discussions included various topics such as staffing structures, ownership models that involve non-lawyers, and the challenges posed by unauthorized technology usage, often referred to as 'shadow IT.' During the summit, I engaged with legal professionals and ethicists regarding the impact of technology on the legal field. Traditionally, law firms have lagged in technological advancements. One legal ethicist noted that the partnership model typical of law firms often hinders investment in long-term technology initiatives, as profits are distributed annually rather than reinvested. This financial structure, coupled with the billable-hour model, discourages the adoption of software that could potentially decrease hours worked, thereby reducing revenue unless firms transition to fixed fee or share-of-savings arrangements. The cautious approach initially taken by many clients regarding generative AI has shifted dramatically. An employment lawyer shared that clients who once prohibited the use of AI on their cases are now actively requesting information about the technologies being utilized by their law firm and the training being provided to lawyers. As one former firm chair remarked, the transformation from resistance to necessity has been swift, with urgency now driving law firms to acquire software licenses, establish dedicated task forces, and prepare partners to discuss AI benefits with clients. The question of funding these technological advancements sparked lively debate among attendees. Some lawyers suggested passing the costs onto clients, while others advocated for firms to absorb the expenses. A recurring alternative discussed was seeking external investment, particularly through managed services organizations (MSOs), which allow law firms to maintain their partnership structure while outsourcing non-legal operations. The ongoing evolution of technology in the legal space is reshaping traditional firm hierarchies. A firm chair reported that his organization has ceased hiring junior lawyers, opting instead for AI-driven solutions. This has led to predictions of a new law firm structure featuring fewer partners and juniors but an increased number of experienced mid-level associates handling the bulk of work. Despite these changes, concerns remain about the future pipeline of mid-level talent, especially if the entry-level hiring slows down. A major law firm executive mentioned that, contrary to this trend, their associate class continues to expand in response to rising client demands. The discussions culminated in a thought-provoking inquiry by a law school professor: 'What aspects of legal practice will remain uniquely human?' Reactions varied, with answers ranging from 'judgment' to 'happy hour,' highlighting the complexities and evolving nature of legal practice in an AI-driven future.