Law Practice Management Asked and Answered Blog

Category: Trends

Oct 28, 2026

Law Firm Future Strategy – AI’s Impact Upon Estate Planning Practices

Question:

I am the founding partner and sole owner in our firm located in Miami, Florida. We have a total of four lawyers, four paralegals, and four support staff in our firm.  We are an estate planning firm that handles estate planning, estate administration, and elder law matters for our clients. Estate planning matters are charged a flat fee and estate administration are billed based on time spent on the matter. At a recent attorney meeting the subject of AI and the impact upon estate planning came up and our discussion led us to the question as to the impact that AI will have upon future estate planning work for our practice. Will estate planning dry up with clients using AI tools and doing their own estate planning documents? Your comments and thoughts are most welcomed.

Response: 

I believe that AI will have an impact upon estate planning, especially for wills and trusts in that it will change how wills and trusts are drafted. You will be forced to use AI assisted drafting tools if you are not using them already and the use of these tools will substantially reduce drafting time. More firms will be forced to move from hourly billing to flat fee billing for estate planning work. As efficiency improves and firms that are presently charging flat fees will see competitors charging less, reducing average revenue per matter and required a larger volume of client business to remain competitive. AI will impact how:

  1. Estate planning documents are prepared.
  2. Client relationships are managed.
  3. Legal research is conducted.
  4. Estate planning firms price their services.
  5. Estate planning firms compete for business.

In order to remain competitive and profitable in the next three to five years estate planning law firms are going to have to:

  1. Implement AI in areas that will make routine estate planning work faster and less expensive.
  2. Develop separate client intake approaches for mom and pop (lower net worth) clients and higher net worth clients. Consider maximum use of AI for lower net worth clients.
  3. Increase the overall volume of estate planning work and charge less, especially mom and pop (lower net worth) work.
  4. Increase the firm’s estate planning expertise and sophistication and obtain more higher end net worth clientele.
  5. Increase the firm’s higher net worth new client business obtained through professional referral sources such as attorneys, CPAs, financial planners, bank trust departments. Build and enhance relationships in these areas to increase referrals of high-net-worth clients. Build relationships with geriatric care managers, health care professionals, and senior living communities. This can develop into a continuing advisory practice rather than a one-shot estate planning document preparation. 
  6. Consider other practice areas that related to your practice that are relationship driven and allow the attorney to serve more as a trust advisor to clients rather than an information provider. Your specific goal should be to shift the emphasis of your practice on interpretation, judgment, and the client’s broader objectives. You might want to consider:
    1. Higher net worth estate planning.
    2. Special needs planning.
    3. Estate litigation.
    4. Life care planning.

Your goal should be to graduate from lawyer technician to a trusted advisor to your clients. A trusted advisor is a lawyer or other professional service provider whom a client relies on not merely for knowledge or technical expertise, but for sound judgment, honest counsel, and guidance in making important decisions. Trust is earned over time through competence, integrity, discretion, consistency, and a genuine commitment to the client’s interests.

As a trusted advisor estate planning attorney your primary role should be to understand the family’s complete circumstances, identify the questions the client has not considered, and develop a coordinated plan that reflects the client’s wishes. Your role should not be to primarily prepare estate planning documents. Your role should be to help clients make decisions about family, responsibility, control, and legacy. This is the difference between a technician whose work will be replaced by AI and a trusted advisor whose work will be focused on client relationships. 

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John W. Olmstead, MBA, Ph.D., CMC

Sep 23, 2026

Insurance Defense Law Firm Survival in the Age of AI

Question:

I am the managing partner of a sixteen-lawyer insurance-defense firm in Orlando, Florida. There are four equity partners in the firm, twelve associates, and eight paralegals plus administrative personnel. We manage the defense for various insurance company’s  insured primary in auto accidents, premises liability, and slip and falls cases. Our work comes primarily from four insurance companies. All of our clients are billed by the hour at low hourly rates with restrictions on the amount of time that we can spend on certain matters. We have resisted using any form of AI and we are continuing to staff our client cases as we have always done. Our clients are asking us what and how we are implementing AI and to reduce associate and paralegal time spend on their cases. I realize that we must change our ways and begin to implement some level of AI in our practice. However, I have concerns as to how we survive in a practice where partner livelihood in a low bill rate practice has been based on high billable hours and the profit margin off of associates and paralegals. What do you see as the impact that AI is having or going to have on insurance-defense law firms?

Response: 

AI is likely to have a major impact on insurance-defense law firms. Associates may not be totally replaced as firms will be able to handle more cases with fewer billable hours. Insurance companies will expect faster turnaround of their cases at lower costs. Implementation of AI by insurance company outside law firms will be a requirement.

Insurance-defense law firms will see the following changes:

  1. Much of the following associate attorney document related work will be handled by AI. (Many of our plaintiff personal injury clients are already using AI for this work):
    1. Summarizing medical records
    2. Reviewing claim files
    3. Summarizing depositions
    4. Extracting facts from police reports and incident reports
    5. Chronologies and litigation timelines
    6. Legal research
    7. First drafts of motions and briefs
    8. Discovery requests and responses
    9. Interrogatory analysis
    10. Drafting correspondence to adjusters
    11. Comparing pleadings against the facts in the claim file
    12. Identifying missing evidence
    13. Preparing deposition outlines
    14. Reviewing expert reports
    15. Analyzing large document productions
  2. Billing will shift from the billable hour to various forms of alternative billing. Several years ago, several major insurance companies shifted to flat-fee models and more insurance companies are likely to do the same. Several of our clients have reported that their effective rates have been higher under flat fee billing than they were when they were under hourly billing. AI will increase law firm productivity, but it will also decrease billable hours. Insurance-defense firms will have to find ways to maximize revenue and profitability under the new paradigm.
  3. Insurance companies will become more demanding than ever and expect more from their law firms. They will use AI to measure their law firm’s performance and case outcomes. AI therefore will not only change what defense lawyers do. It will change what their clients can measure about them.
  4. The pyramid model of stacking associates and paralegals could dramatically change. Gone will be the days of partners living off the profits from the labor of associates and paralegals. Firms will not need as many junior lawyers per partner and their will have an effect upon:
  5. AI may make experienced lawyers more valuable and trial lawyers may become more valuable.

When it is all said and done a major question will be:

  1. What will be the billing model? Hourly billing, hybrid hourly billing, contingency or success fee, etc.?
  2. Who will receive the most benefit – the law firm or the insurance company for increased productivity?

With reduced billable hours insurance-defense firms will have to either reduce associate/paralegal headcount or increase their case volumes. Business development will become more critical as opposed to simply relying on a handful of insurance company clients.

While AI is having and will continue to have a transformational impact upon society as well as law firms, we have seen this before with other forms of technology and law firms have successfully adapted and I believe that we will once again.

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John W. Olmstead, MBA, Ph.D., CMC

 

 

Sep 02, 2026

Law Firm Management – What is Keeping Law Firm Owners and Managing Partners Awake at Night

Question:

I am the managing partner of a ten lawyer firm in Kansas City, Missouri. There are five partners and five associates in the firm. We are an insurance defense firm and our clients are a handful of insurance companies. Our cases are primarily slip and fall, premises liability, and auto accident cases. I have been the managing partner for two years and frankly I am getting burned out on the position and none of the other partners want the job. I am working 60-70 hours a week and am spending so much time on administrative matters that I don’t have time to practice law. I would be interested in what is keeping managing partners in other insurance defense law firms awake at night and how they are dealing with the challenges.

Response: 

Managing partners in small insurance defense firms are telling me that the following top five challenges and concerns are what are keeping them up at night:

1.Finding and Retaining Experienced Lawyers and Staff

This is the biggest issue facing many firms. Gone are the days when you could place an ad and have a position filled within 30 days. I have client law firms that it has taken over a year to find and hire experienced (3-5 years) lawyers.  Billable hour requirements of 1800 – 2000 hours are conflicting with work life balance goals of many young lawyers. Retention is also a issue. Losing a strong partner or associate can mean lost revenue, disrupted client relationships, and months of recruiting and training.

You must plan on a longer recruiting timeline and use all avenues available to you. For example:

You must offer competitive benefits, work life balance and flexibility. Some form of remote work has become a major requirement and failure to offer schedule flexibility and remote work has resulted in  many law firms losing candidates to other law firms.

2.  Client Concentration 

Insurance defense firms often have too few clients and many insurance defense firms are held hostage by these clients. I have some law firm clients that only have one insurance company client and if that client were to start using another law firm the law firm would be in dire straights. The client controls the amount of case assignments that the firm receives, the bill rate, and the amount of hours that can be charged for various tasks. The firm is so busy working on client files that no one has time to market and try to get additional clients. Partners often know they need a more predictable pipeline but don’t have time—or a repeatable system—for generating new clients. It sounds like your firm depends heavily on a handful of clients. Losing one major insurance company client can materially change the firm’s economics.

Insurance defense firms must find ways to invest the time and other resources to add additional clients to their client roster resulting in less dependence on one or a few clients and move their practice up market with improved hourly rates in areas such as insurance coverage, corporate representation, and self insured clients. Such diversification has made many firms less dependent on 2000 plus billable hours and more attractive you new lawyers.  Many insurance defense firms have effectively done this.

3.  Cash Flow and Collections

It has often been said that businesses are killed by inadequate cash flow. A firm maybe profitable on the profit and loss statement but is cash always tight?” Slow-paying clients, write-offs, uneven matter flow, and payroll/overhead create constant pressure.

4. Technology and AI

Law firms are trying to figure out where AI can genuinely improve operations and lower operational overhead without creating confidentiality, accuracy, ethics, cybersecurity, or malpractice risks. What tools should the firm be using? Costs? Time to implement? Fear of AI reducing the need for lawyers?

You need to attend all the CLE seminars, webinars, etc. that you can and get up to date on AI. This is moving very fast.

5. Succession Planning

What happens when founding partners want to slow down and retire?” How does the firm fund buyouts? Smaller firms frequently have fewer obvious successors. Do the younger attorneys in the firm want to have equity and own a law firm and will they be willing to step forward?

You need to begin addressing this sooner than later. Our blog library has an entire section on this topic.

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John W. Olmstead, MBA, Ph.D, CMC

 

Feb 23, 2011

Times are Tough – How Are Other Small Firms Doing?

Question:

I am a partner in an 8 attorney firm in the Chicago suburbs. Our firm has started having discussions about what we need to be doing differently. This is huge for us – one meeting a year is our typical meeting frequency and then only to discuss how we are going to cut the pie. How have other firms done during the recession? What are you seeing?

Response:

In general small firms in the midwest have fared pretty well during the recession. Last year some firms had the best year ever while others experienced flat or 10% revenue declines. Small firms that had the biggest problems were those that had issues before the recession or were in problem practice areas. Big law firms have had to face unique challenges.

Small firms that have weathered the storm and fared the best were those that:

I believe that law firms that fail to focus their practices, set goals, measure accomplishments, and foster accountability will fall short and not meet their financial objectives. Law firms that fail to plan are planning to fail.

Law firms as well as solo practices need to begin focusing their firms and practices, setting firm and individual production goals, measure accomplishment and implementing systems to instill accountability from all members of the team – attorneys and staff alike.

Consider using budgeting which is a tool that can be used to measure goal attainment and how well the firm is doing.

What gets measured is what gets done.

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Click here for my article on creating strategic (business) plans.

 

John W. Olmstead, MBA, Ph.D, CMC

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