Unlike traditional firms that bill by the hour, personal injury attorneys on contingency fees are highly motivated to adopt AI. Efficiency gains don't reduce billable hours; they directly boost profit margins by settling cases faster and with less manual work, creating clear and immediate ROI.

Focusing on AI for cost savings yields incremental gains. The transformative value comes from rethinking entire workflows to drive top-line growth. This is achieved by either delivering a service much faster or by expanding a high-touch service to a vastly larger audience ("do more").

A key competitive advantage for AI companies lies in capturing proprietary outcomes data by owning a customer's end-to-end workflow. This data, such as which legal cases are won or lost, is not publicly available. It creates a powerful feedback loop where the AI gets smarter at predicting valuable outcomes, a moat that general models cannot replicate.

Instead of selling AI co-pilots, legal tech startup Crosby operates as a full-stack law firm using AI internally. This model allows them to continuously re-orchestrate workflows between human lawyers and AI as models improve. This captures the entire value of automation rather than just the limited margin from selling a software tool to other firms.

To penetrate tech-resistant markets like personal injury law, the winning model is not selling AI software but offering an AI-powered service. Finch acts as an outsourced, AI-augmented paralegal team, an easier value proposition for firms to adopt than training existing staff on new, complex tools.

VC Keith Rabois highlights a core conflict: law firms billing by the hour are disincentivized from adopting AI that makes associates more efficient, as it reduces revenue. This explains why corporate legal departments are faster adopters—their goal is to cut costs.

Measuring AI's value by hours saved is misleading for law firms, as it can imply lower revenue. The true ROI comes from what lawyers do with that saved time: pursuing more complex strategies, conducting deeper analysis, and spending more time with clients—high-value work previously constrained by time.

AI legal tech startup Eve targets plaintiff lawyers because their business model (a percentage of the win) is directly aligned with AI's efficiency gains. In contrast, defense firms, which rely on billable hours, face a structural disincentive to adopt tools that reduce the time spent on tasks.

Thrive Capital invested in an AI-powered accounting firm, not an accounting AI software tool. Their thesis is that in some industries, the service provider who uses AI to become hyper-efficient will capture more value than software vendors selling tools to a fragmented customer base. This is a bet on the business model, not just the technology.