In this conversation, I’m joined by “The Subscription Attorney,” Mathew Kerbis, to discuss how AI is fundamentally changing the power dynamics between Biglaw firms and their sophisticated in-house clients.
This isn’t about efficiency gains it’s about accountability, transparency, and the existential threat facing traditional billable hour models.
We explore how purpose-built AI tools are empowering in-house legal teams to benchmark work, question billing practices, and why this creates an unprecedented challenge for large law firms still operating on legacy business models.
In-House Teams Will Expose Biglaw’s Billing Problem
Mathew explains why sophisticated in-house legal teams pose the biggest threat to traditional Biglaw billing. These teams are adopting purpose-built legal AI tools and will start asking tough questions. Unlike individual clients who may not understand the nuance, in-house counsel are sophisticated enough to benchmark work and recognize when they’re being overcharged.
Purpose-Built AI vs. General AI: The Bonfire vs. Blowtorch Analogy
Mathew shares a powerful analogy from Daza Greenwood about the difference between general AI tools (ChatGPT, Claude, Gemini) and purpose-built legal AI.
General AI is like a massive bonfire—incredibly powerful and versatile, but not specialized. Purpose-built legal AI is like taking that fire and harnessing it into a blowtorch — you can now weld with precision.
The Flat Fee Trap: Why It Won’t Save Biglaw
Steve and Mathew tackle the question many law firms are considering: Can they escape the billable hour problem by switching to flat fees? The answer is no.
Even with a $100,000 flat fee, sophisticated clients can calculate that if the work only took 2 hours with AI assistance, they’re still massively overpaying.
This reveals the “underscoping and overscoping problem” — lawyers struggle to accurately price fixed-fee work, which is exactly why flat fees never replaced the billable hour in the first place.
The real issue isn’t the billing model; it’s that AI has made the actual cost of legal work transparent, and no pricing structure can hide that reality.
Listen to the latest episode of “Be That Lawyer” here.
Steve Fretzin is a bestselling author, host of the “Be That Lawyer” podcast, and business development coach exclusively for attorneys. Steve has committed his career to helping lawyers learn key growth skills not currently taught in law school. His clients soon become top rainmakers and credit Steve’s program and coaching for their success. He can be reached directly by email at steve@fretzin.com. Or you can easily find him on his website at www.fretzin.com or LinkedIn at https://www.linkedin.com/in/stevefretzin.
The post AI In Law: In-House Teams vs. Big Firms — The Real Disruption Coming appeared first on Above the Law.