Takeaways from September's Third Thursday
September's Third Thursday User Group meeting was a big one. Matt DenOuden opened the session, we welcomed guest speaker Damien Riehl of Clio, and Jean Yang closed with fresh data from our State of AI survey. We also crossed a milestone along the way: OnPoint just passed 1,000 members. Third Thursday User Group members can access the recording here.
Guest speaker: Damien Riehl, Clio
Damien is a technology lawyer, former litigator and judicial clerk, and a coder since 1985. His core message was that the AI moment in legal is not around the corner, it is here.
A few takeaways:
- Rethink what "judgment" means. Damien pushed the room to ask how much legal work truly requires judgment versus intelligence billed at judgment rates. A lot of what feels like judgment, such as "this judge hates that" or "that will scuttle the deal," is really data that can be quantified.
- Legal is a prime target. Everything lawyers do runs on words: ingest, analyze, output. AI does exactly that at superhuman speed. That is why legal sits second only to software in agentic AI deployment and in VC and PE investment, with roughly 1,200 legal AI startups now in the market.
- It is not the tool, it is how you use it. To the "I tried AI and it is not there yet" objection, his answer was which tool, and how. A novice bangs on a piano and makes noise. The same instrument in skilled hands makes a masterpiece.
- A one-minute agent demo. He took a real breach-of-contract case and had AI generate counterarguments, break down the elements of each claim, produce supporting facts, and draft client questions, all in under a minute. The point: what used to be associate billable hours can be baked into software with no prompting.
- The billable hour will shrink, not die. He expects flat fee work to grow from roughly 10% toward the 60 to 70% that the Big Four accounting firms run on, because shrinking cost raises profit margin. His advice to clients: decouple time from value, put your firms' feet to the fire, and ask for flat fees.
State of AI survey: Jean Yang
Jean recapped the State of AI Expectations for Outside Counsel survey, run with LegalOps.com and presented at Running Legal Like a Business alongside legal ops leaders from Uber and Snap. The full results, plus Snap's template billing guideline language, are available to download in the community.
Highlights:
- How clients are driving adoption. Refreshing billing guidelines, surveying and scoring firms, raising it in QBRs, moving toward fixed fees, and flagging entries where AI could reasonably have been used.
- Billing guidelines are catching up fast. The large majority already address law firm AI use or soon will. Disclosure of AI use is the most common topic, followed by consent, approved tools, human-in-the-loop, and passing savings to the client. If your guidelines are silent, it is worth checking what your firms default to.
- Guardrails. Privilege, confidentiality, and hallucinations are the top concerns. Private or enterprise AI, human review, and data retention policies are becoming standard. Firms themselves flagged quality.
- ROI is lagging expectations. The immediate goals are lower spend and faster turnaround.
