Artificial intelligence continues to unsettle, energise, and reshape the legal sector. In this session, Platforum9 brought together two perspectives: James Markham, director and founder of The Legal MBA, whose work focuses on commercial skills and business models in law, and Kurt-Magnar Aanestad , a legal tech entrepreneur observing the industry shift from the vendor side. Their shared view: the cultural transformation triggered by AI may ultimately prove more significant than the technology itself.

A Cultural Shift From Top to Bottom

Markham noted a rare phenomenon in law firms—simultaneous pressure from leadership and junior lawyers, with middle management caught in the “squeezed middle”. Senior leaders are now wrestling with existential questions about business models, while junior lawyers experiment with tools such as Harvey, Microsoft Copilot, and others, discovering time-saving use cases firsthand.

This dual movement has broken open long-avoided conversations about why things are done a certain way. Markham emphasised that although AI often triggers these discussions, the outcomes may involve far more than genAI—workflow redesign, RPA, improved document structures, and streamlining of legacy processes.

For younger lawyers, this moment presents a genuine opportunity. With hierarchies loosening, firms finally appear willing to listen to those closer to the work—and closer to evolving client expectations.

Pricing: The Next Flashpoint

The billable hour dominated the debate. Markham described pricing as the “next major battleground”, with firms increasingly exploring fixed fees, value-based pricing, and subscription models. But shifting from hours-times-rate to sophisticated value conversations requires a deep mindset change: understanding client-perceived benefits, pain points, and acceptable risk.

Both speakers strongly rejected the emerging concept of the “AI hour”—a line item assigning cost to AI usage. Markham argued this is a distraction from genuine value and is likely to be the first thing clients strike off their bills.

Scope management, transparency, and a portfolio approach to profitability are becoming essential. Firms must move from obsessing over individual matter margins to evaluating performance across a range of engagements.

Remuneration: A System Holding Transformation Back

Magner highlighted a structural barrier: remuneration models still depend heavily on billable hours. Partners and associates alike are rewarded for time spent, not outcomes achieved. This creates friction against innovation, even when firms openly recognise the need to modernise.

Some US firms are beginning to experiment. Markham cited examples where “innovation hours” can count towards targets—an early, imperfect but promising step toward redefining value.

Team-based targets and profit-centre thinking could accelerate this transition, encouraging senior lawyers to invest in training juniors and engage in business development rather than optimising personal utilisation.

Training and Team Structure in the Age of AI

As routine tasks are automated, questions intensify around how to train junior lawyers. Markham warned that firms risk overlooking the long-term implications: team shape, hiring patterns, and ensuring that junior lawyers still gain the experience they need.

Without a shift away from the billable hour, non-billable training will continue to be deprioritised—even as firms rely on those juniors to sustain future growth.

Where Small Firms See Opportunity

A clear divide is emerging. Large firms increasingly view AI as a threat to their high-leverage, high-utilisation models. Smaller firms, by contrast, see opportunity—greater agility, a chance to win work traditionally dominated by big players, and an ability to build leaner delivery models powered by AI agents rather than armies of juniors.

This sentiment aligns with recent surveys Markham referenced: large firms’ optimism about AI has dropped sharply, even as smaller firms become more enthusiastic.

Private Equity Interest: What’s the Play?

Gannon raised the striking rise in private equity interest in law firms. Markham remains sceptical about its sustainability, questioning what problem PE is trying to solve that firms cannot address themselves. Magner noted that private equity groups appear focused on technology—whether by acquiring back-office functions, consolidating knowledge, or building scalable legal tech platforms.

While the long-term viability remains unclear, the trend is accelerating across Sweden, Norway, the UK, and beyond.

Looking Ahead

The speakers agreed: the legal sector stands at an inflection point. AI is catalysing a deeper examination of business models, pricing structures, and cultural norms. Those firms willing to rethink value, empower junior lawyers, embrace experimentation, and invest in transformation—rather than defend legacy models—are best placed to thrive.

Markham closed with a reminder that excitement and opportunity remain abundant, especially for firms bold enough to start with a blank sheet of paper.