AI: The Partnership Model's Coup De Grace And Enabler Of What's Next

Forbes

5 hours ago

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We are living in a world where the speed, breadth, and constancy of change is, paradoxically, one of its few constants. Artificial intelligence (AI) has emerged as a central force in that change process. It is advancing at an astonishing pace, faster even than several of its key players had foreseen. Perhaps more than any element of contemporary life, the outsized challenges and opportunities AI presents epitomize diverging paths of our human future. Will AI create a Utopian or Dystopian existence? Will human beings be enhanced or supplanted by AI? These and other existential questions speak to the outsized impact that AI will wield.
Many other critical questions remain unanswered, if not inadequately addressed: (1) will AI be used for the collective good or to further enrich those in control?; (2) will sufficient guardrails and governance be in place to manage AI's risks?; (3) will domestic and geopolitical polarization foreclose a global approach to AI, weaponizing-not harnessing- its potential to democratize services and products? (4) how will AI impact our lives, jobs, income, and self-worth?; and (5) will AI augment (collaborate and enhance) our work/livelihood, or automate (replace) it?
The foregoing issues are of paramount importance to every person on the planet. Yet only a small segment of the US and global populations are aware of the astonishing advances of AI and the profound changes it will galvanize. The US Government, currently locked in an 'AI arms race' with China, is neither regulating AI nor alerting the public about the tsunami of change coming their way. The absence of social media governance is a cautionary tale for the current 'Wild West' state of the AI landscape. AI governance is another in a long list of existential human challenges (climate change, nuclear conflict, famine, etc.) lacking a global strategy.
Big business, however, is keenly aware of AI's rapid development and its profound ramifications. There is widespread consensus among business leadership that AI will change our lives and turbocharge enterprise transformation. AI is not simply an efficiency additive for legacy structures, economic models, processes, and talent. Rather, if applied strategically and holistically, it can facilitate new delivery models better aligned with a complex, interconnected, real-time world of immense challenge and unparalleled opportunity.
The World Economic Forum's Technology Convergence Report (2025), in collaboration with Capgemini, introduced a framework that assists decision makers to identify intersecting technologies to create new business models. While the Report principally focuses on combinations of emerging technologies, it identifies AI as a key enabler for commercial viability of different technologic synergies. When deployed in this fashion, AI not only augments human performance, but it also leverages the power of the organization's tech stack. The end result is enhanced customer outcomes, expanded access to goods and services, reduced cost, greater transparency, and a combination of scalability and customization.
To realize AI's potential—and return on investment—requires that it be integrated into all aspects of business—structure, economic model, leadership, culture, talent, and brand, to cite a few key elements. The potential of AI is not simply to positively impact a single component of business but to be infused across all facets of it. AI can only enable new models when it is at the core of enterprise structure, strategy, training, and operations. Organizations that adopt this holistic approach to AI deployment are often described as 'AI-native.' As with other aspects of transformation, value capture is a combination of integrated technology and human adaptation. The challenge of change management (e.g. talent, upskilling, etc.) is often steeper than the technology component.
Boston Consulting Group found that leading companies are allocating a large portion of their AI investments to reshaping core functions and inventing new offerings. That requires enlightened leadership and a workforce whose curiosity and creativity are encouraged, not constrained. Creativity thrives in a culture where rank is not a proxy for good ideas and considered experimentation predominates mistake avoidance. Counterintuitively, a native AI organization is one that applies technology to encourage-not discourage- human creativity.
The economic impact of leveraging the power of AI this way is widely projected to be enormous. PwC's Global Artificial Intelligence Study found that AI could contribute $15.7tr to the global economy by 2030 and boost GDP for local economies up to 26% by that period. The Panglossian financial projections will be accompanied by tectonic socioeconomic and psychological change. There is consensus among those that understand AI best that it will have a profound effect on jobs, life, and what it means to be a human being in an AI world.
Bill Gates said during a recent interview at Harvard that the world is entering into a new era of 'free intelligence.' He explained that expertise remains a scarce commodity today. Doctors, lawyers, scientists and other highly-trained professionals are among the professionals in the 'intelligence' occupational category. Gates posits that, 'with AI, over the next decade, that (expertise) will become commonplace — great medical advice, great tutoring…. advances in artificial intelligence will mean that humans will no longer be needed 'for most things' in the world.'
Anthropic CEO, Dario Amodei, warned of an imminent 'white collar bloodbath' in a recent Axios interview. He projects that AI could wipe out half of all white collar jobs in the next one to five years. Amodei exhorted AI companies and the government to stop "sugar-coating" what's coming: the possible mass elimination of jobs across technology, finance, law, consulting and other white-collar professions. And that's not all. Anthropic research reveals that while AI models are currently being used more for augmentation (assisting humans to do a job), Amodei says the pendulum will soon swing to automation (replacing humans).
Mark Zuckerberg, Sam Altman, Elon Musk, and other technology gurus have spoken similarly about AI's profound impact. Musk has stated that advances in AI will change the world to the point that eventually, hardly anyone will have a job. That will require governments to pay out a universal basic income (UBI). Interestingly, Musk is not as concerned by the economics of AI on human beings as he is on its mental health impact. He believes that the absence of work will create a lack of purpose and promote an already growing feeling of isolation.
SignalFire, a venture capital firm, released their State of Talent Report-2025, an analysis of hiring and employment trends in the tech industry. A revealing (and foretelling) takeaway is the dearth of jobs for newly minted tech grads. They comprise only 7% of hires at Big Tech, down 25% from 2023 and over 50% from pre-Pandemic levels in 2019. The Report cited similar hiring drops for entry-level grads in tech start-ups.
AI's takeover of white collar jobs has yet to reach 'bloodbath' proportions, but there are signs that it is underway. Accenture, a global titan that has invested $3B in AI, has recently trimmed its workforce. McKinsey and the Big Four have also reduced headcount. While AI may not be the proximate cause of the layoffs, there is little doubt it is a factor.
How long will the armies of entry, lower, and junior-level consultant have a job? The question applies equally to lawyers and other professionals. Upskilling, agility, curiosity, and resilience will enable some to take on new roles, many of which have yet to be created. Other displaced professionals will leverage their 'first career' knowledge and experience and, with augmented skills, migrate to other fields. Once rigid and linear career trajectories will become more fluid and diverse. This calls for 'learning for life,' resilience, and a strong stomach.
Degrees, licensure, and other proxies for 'expert' status will no longer be the end of professional development but the starting line. Many companies are already jettisoning degree filters in talent evaluation. Lifelong learning will be a tacit requirement. AI agents will play a key role in this process, providing individuated training. An agentic future will be part of the transformation of professional services as well as those it serves.
The Good Times Are Still Rolling For Big Law—But For How Much Longer?
When will the seemingly indestructible Big Law pyramidal partnership model bubble burst? That question has been debated for decades. The reports of the monolithic legal model's imminent death, to channel Mark Twain, have been greatly exaggerated. In the new Millenium alone, the legacy partnership model has survived the global financial crisis, the Pandemic, geopolitical and domestic polarization, digital transformation, rapid advances in technology, client dissatisfaction, migration of work in-house, the reentry of the Big Four into the legal market, and the proliferation and steady growth of new providers sources (a/k/a 'ALSP's').
Stress cracks have been visible in the partnership model for years. The author queried, 'Are Law Firms Becoming Obsolete?' nearly a decade ago. The article identified three principal systemic challenges to their economic model: (1) delivery has morphed from legal practice -for which it was designed- to the business of delivering legal services at the speed of business and at scale (a value-based business of law); (2) the pyramidal partnership structure (input/labor intensive and leveraged) is inherently misaligned with digital business as well as a change inhibitor; and (3) the durability and financial success of the partnership model masks mounting client dissatisfaction and a willingness to entertain new models and provider sources
While large corporate firms remain highly profitable-especially a cadre of approximately 20 that have separated themselves from the pack by their stranglehold on premium work and the high fees it commands—they are collectively losing market share. In-house now outpaces Big Law as a percentage of total legal spend, a reflection of corporate buyers' search for alternatives to the legacy firm model. Corporate buyers (as well as SME's and individuals) are looking for new legal delivery models built to align with and better serve their needs. The fragmentation of the legal market is ripe for consolidation, transformation, and new models.
AI Will Hit Law's Partnership Model Especially Hard
AI will impact all the professions, but it will hit law especially hard. This is counterintuitive since law has long been able to evade, or deflect, the full brunt of past macroeconomic upheavals. AI poses a unique, dual threat to law firms' economic as well as training and advancement models. Firms' partnership model has long relied on clients to subsidize 'on the job training' of young lawyers. More recently, clients have balked, even as associate hourly rates-if not realization-have continued to climb. AI will put an end to subsidized training, reduce billable hours and headcount, and deplete the bottom rung of the pyramid, the source of substantial equity partner profit.
Without the capital to invest in professional development and training programs (robust among well-capitalized consultancies like Accenture, McKinsey, Bain, and the Big Four), law firms will lack a nucleus of future leadership. In a world where professional development has become a business imperative, partnership firms will be hard pressed to attract and retain top talent, much less to convince clients the firm has a viable succession plan.
AI will disrupt the legacy structure and economic model of firms, but it will not eliminate lawyers and allied legal professionals. AI will, however, challenge their purpose, reimagine what they do, how they do it, its value to the client, and the necessary skills and appropriate resources required. This will be foundational to the creation of new models that will transform the legal industry from top to bottom. The new models will be reverse-engineer from the end-user perspective, leveraging AI across the organization to better satisfy client/customer objectives, outcomes, and experience.
Technological advances ushered business into the digital age and, with it, a transformation journey. AI is the next phase of that journey. What's different is that for the first time in human history, AI can rival—and, increasingly, eclipse—the higher end of human cognitive performance. This goes to the very heart of professionalism—whether it is medicine, law, architecture, or some other form of licensed expertise.
Trusted advisors are the apex of the professional class. Their wisdom, experience, differentiated and broad knowledge, and the trust that it has earned over time and at key business inflection points is highly valued, if not difficult to measure. Their strategic input and counsel, coupled with their ability to 'connect the dots' will continue to be prized. Its support, however, will come from AI and AI-supported human input, not phalanxes of labor intensive (human) professionals. Initially, AI will augment a reduced headcount of lawyers and allied legal professionals. AI will serve as their trainers, assistants, and 'junior partners.' How long AI's collaboration with humans will be required is both speculative and not subject to a uniform answer.
Over time, augmentation is likely to be tipped towards automation. The economic case for that is compelling; AI can perform work dramatically faster, less expensively, and more comprehensively and accurately than its human collaborators. AI is constantly improving, enabling it to move up the complexity scale. It does not require vacation time, parental leave, or raises, and it works around the clock.
AI's real value is when it is integrated across the organization, supply chain, and with clients. There is also a critically important social component to AI; it can democratize access to legal services. This is essential to stop further erosion of the rule of law, the attack on democracy, and the threat of authoritarianism. Paradoxically, AI can 'humanize' the vagaries of legal language, procedure, and process. It can narrow the gap between 'lawyers and 'non-lawyers,'' a barrier constructed by the legal profession. It can also reduce or limit the need for formal legal engagements in a wide variety of 'legal matters.'
AI will bulldoze Big Law's partnership structure and pyramidal economic model. Here are several key reasons why.
The Foundational Elements of New Delivery Models
AI will be a table setter for new legal delivery models. While it would be premature, if not presumptuous, to offer a comprehensive list of legacy model replacements, citing key foundational elements is a different matter. Here are some of those components.
The Byzantine US legal regulatory framework is out-of-synch with the marketplace and no longer adequately serves the needs of customers. It also fails to address the unmet access to legal services of society at large. AI will accelerate customer and societal demand for regulatory reform by exposing the profession is no longer the sole repository of legal expertise or the sole source supplier of legal products and services. As in the UK and other jurisdictions with progressive regulatory frameworks, the US (and other markets) will soon sanction corporate structures, institutional capital, and 'outside' ownership/control (lawyers are no longer the sole/principal owners). The go to-and specious- argument in support of retaining lawyer ownership is that it prevents financial conflicts between corporate and client/customer interests. This ignores the existing financial conflict between the partnership model and its clients and serves as a basis for perpetuating the self-regulated legal monopoly.
Even if regulatory reform is slow to advance, there are workarounds to the current framework. Clearspire, introduced the legal industry's first 'two-company model' nearly twenty years ago. It was comprised of a partnership-model firm that engaged in the practice of law and a dedicated, co-branded managed services corporation that provided the law firm infrastructure (featuring a bleeding edge, integrated tech stack) and end-to-end support services. The two-company model was devised to circumnavigate and comply with anachronistic regulatory restrictions. In doing so, it highlighted the growing distinction between legal practice and the business of law. The integration of the two is essential to positive client outcomes; that is one of many reasons why regulatory change is past due.
2. Corporate Structure/Capital
A corporate structure and capital are inextricably fused elements. While a corporate structure supports many other important aspects of the new delivery model—rapid decision making, favorable tax treatment for earnings, longer-term strategic horizons--access to capital are key. Capital is essential to investment in infrastructure, talent, acquisitions, innovation initiatives, growth, and brand building, among other things.
The new delivery models will deploy capital to acquire star legal talent from top firms and corporate teams. Their legal expertise and individual brands, placed in a native-AI environment and supported by a deep, broad multidisciplinary team of business, technology, and data science experts (among others) will build a new, world-class brand of legal delivery provider. This can be achieved by acquisition, organic growth, a variety of strategic partnerships, or a combination.
3. Global Brand
There is an opportunity to rebrand legal delivery in the AI-age. Brands are holistic representations of organizations. A handful of law firms have developed strong brands within the legal industry and with business, and government. But most firms—even highly profitable ones-- are undifferentiated apart from particular practice expertise.
The fragmentation of the legal industry, coupled with the uptick of firm mergers, practice group decampments to new firms, and laterals further diminishes the law firm brand. As firms move to a corporate structure, they will have the capital to invest in key components (see above) necessary to build and fortify their brand. This will promote trust, client and employee loyalty, generate new business opportunities, and serve as a magnet for talent. That is why a brand is often described as 'a strategy made visible.' Presently, most firms lack that visibility.
4. AI-Native
AI-native models will integrate AI across the legal function and the enterprise. They will enhance customer-centricity and brand loyalty by leveraging institutional knowledge, providing self-help tools, providing a range of service options and value-based pricing, and offering 24/7/365 access to its services and products, among other things.
Native AI structures promote agility, strategic planning, risk mitigation, opportunity identification, customer-centricity, and a host of other success ingredients. Their talent will have digital cores and focus on activities that distinguish their human skillsets from machines. The workforce will play a key role in the oversight of machines, ensuring that appropriate guardrails are in place and applying them in a creative, responsible, and ethical fashion. Lawyers that have technological fluency are an ideal fit for these and other strategic roles. A foundational knowledge of AI and security, data, and the cloud (as well as other emerging technologies like quantum computing) is a baseline for a seat at the AI governance and strategic implementation tables.
5. Talent
The new legal models will view talent through a wider lens than legacy partnerships models have. AI plays a role in that, because lawyers are no longer the sole source of legal knowledge and its application to many tasks once-and often still-performed exclusively by attorneys. The new model providers will not require as many 'traditional' practice attorneys, but as new practice areas emerge, the breadth of practice areas will continue to expand and require human and machine expertise. The importance of 'people skills' will be elevated, and so too will critical thinking, resilience, agility, teamwork, curiosity, and creativity.
The elite segment of professional talent that achieves 'trusted advisor' status will be as important as ever. The trust they have earned is the key to their personal brand as well as a prized asset of the organization. But even trusted advisors must stay abreast-if not ahead-of the constant change of our time. Their ability to 'connect the dots' and to make sense of it all is essential to the native-AI organization. A corporate model firm with access to talent, an AI-native core, top-tier talent fit for such an organizational culture will be a magnet for trusted advisors. They will have more intellectual freedom, access to capital and other resources, a longer time horizon, relief from the inherent constraints of the partnership model, and the opportunity to acquire financially significant equity in the organization.
6. Client and Societal Impact of New Models
Corporate models, capital, and brand will hasten the consolidation of the fragmented legal industry, expand the brand recognition of its leaders, improve client outcomes and experience, and further integrate the legal function into the fabric of business There is an opportunity for significant expansion of the reach, access, affordability, and choice of legal services to society at large. AI can play a pivotal role in expanding access to affordable, effective, and easily accessible legal products and services to an enormous unserved/underserved market. This is critical to rehabilitating the rule of law and democracy, not only in the US but across the globe.
The Emergence of New Models
New models are taking shape. Here are a few examples of a changing legal landscape.
Garfield Law: The firm bills itself as 'the first AI law firm.' The UK-based firm secured Solicitors Regulatory Authority (SRA) approval in May, 2025 to provide legal services through AI. Other firms are using AI to deliver a range of back-office and public facing services. Garfield is the first purely AI-based firm to be authorized to provide regulated legal services (with client-approved lawyer oversight) in England and Wales. The firm provides assistance to SME's, guiding them through the small claims court process up to trial
Dejonghe & Morley: This recently launched boutique advisory platform focuses on matching capital with legal sector opportunities. Its high-profile principals, both former Senior Partners at Allen & Overy (now A&O Shearman), advise private equity investors seeking to enter the UK legal sector. The PE market sees law as high-margin sector ripe for consolidation, investment in AI, and delivery upgrades and improvements. Mr. Dejonghe maintains that, ' At some point AI will change the business model…. If you don't engage with the potential impact and keep working with leverage and hourly rates, you'll ultimately lose out in the market.'
Perplexity/LegalZoom is a hook-up that some industry pundits believe could help reshape delivery of consumer and SME legal services. Artificial Lawyer, a well-regarded technology-focused legal publication, reported`: 'This is something of a watershed moment, as it's not just a Google search that might drag up some random bits of legal info, or a ChatGPT prompt to surface something the LLM has perused – it's an active and deep connection between Perplexity and a bona fide legal information supplier – in this case LegalZoom.'
The firm is noteworthy for its founders, their move from Big Law to advisory services focused on pairing law and capital (that will change the legacy model), and the keen interest of institutional capital in the legal industry. The hook up not only points to the different ways AI is being leveraged, but is also emblematic of leveraging and integrating technological platforms focused on consumer value enhancement, not simply internal provider efficiency.
Conclusion
AI's astonishing advances personify the constancy, speed, and interconnectedness of change in contemporary life and business. The opportunity to extract the value of AI to create business models that elevate customer outcomes and experience is immense. So too does AI offer an opportunity to create models that better serve gilded clients that can afford them but also to democratize them for the collective good. Legal delivery is a poster child for this.
AI equally poses a range of challenges. It will impact lives, jobs, livelihood, identity, purpose, and so much more. That requires leadership's candor and commitment to elevating public awareness of what's ahead, why it is happening, and how to prepare for it. The best antidote to AI anxiety and the apathy it often produces is to understand AI, use it, and adapt it as a tool to aid navigating the future. AI is too often seen as a pink slip waiting to drop, not a teacher and guide.
New structural and economic models hold enormous potential. AI enables them, but human adaptation remains the key to successful transformation, even in the AI-age. So too is humanity more important than ever in an increasingly tech-centric world.
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