Focus Areas

We study the economic and productivity effects of AI on the legal sector, drawing on data from our platform and working alongside academic partners. Our research spans four areas:

  • Economics of AI-enabled work
  • Model performance and routing
  • Professional alignment and governance
  • Data and research infrastructure
Working paper ยท In progress

The Billable Hour AI Index

A longitudinal case study of time card entries at an AmLaw 200 firm from 2016 to 2026, spanning the period before and after LLM deployment. Each entry records a narrative description of the task, the hours worked and billed, and the billing rate. Together, these records let us quantify how the composition of legal work, and its unit economics, shift as LLMs are adopted.

Agenda

The empirical economics of AI in law firms

We calibrate a model of firm economics on real time card data from a partner law firm. The central question is what happens to revenue, by matter type and fee arrangement, when the hours required for a given class of task compress. By tracking AI usage to estimate that compression, we derive economic elasticities and use them to ask whether meaningful sources of revenue exist beyond the billable hour.

Leads: Sophia Fend, Chijioke Mgbahurike, Riya Ranjan

Value beyond the billable hour

Building on the empirical economics project, we examine what value law firms deliver, and can be paid for, when fewer hours are needed to do the work.

Model routing for legal tasks

Routing tasks between models of different sizes is a common way to reduce cost, but it has rarely been tested in domains where output quality is difficult to verify. We study whether legal tasks can be routed to smaller models without loss of quality, and how such routing can lower costs for clients.

Leads: Riya Ranjan

Legal alignment of large language models

Legal frameworks, developed through legitimate and deliberative institutions, have been proposed as a basis for aligning AI systems, but the idea has seen little direct experimentation. We run a benchmarked ablation study testing whether post-training on legal text measurably improves model alignment.

Leads: Riya Ranjan, with Stanford LiftLab

Automated data pipelines for law firms

Law firm data is rarely centralized or standardized, which makes building extract-transform-load (ETL) pipelines a recurring bottleneck. We evaluate agent-based approaches to constructing these pipelines automatically across the many forms law firm data takes.

Related literature

Einav, Finkelstein, Ji & Mahoney (2020). Voluntary Regulation: Evidence from Medicare Payment Reform. NBER w27223.Compares bundled payment with fee-for-service and asks who opts in when participation is voluntary. The paper distinguishes selection on levels, where participants gain without changing behavior, from selection on slopes, where they gain because they can change it. Target prices are set as discounted historical averages, with stop-loss and stop-gain provisions.
Ho & Pakes (2014). Hospital Choices, Hospital Prices, and Financial Incentives to Physicians. American Economic Review 104(12); NBER w19333.Models physician referral choices as a function of the price paid by the insurer, distance, and hospital quality, and finds that capitated physician groups steer patients toward lower-cost hospitals.
Misra & Nair (2011). A Structural Model of Sales-Force Compensation Dynamics. Quantitative Marketing and Economics.Develops a dynamic agency model of sales representatives facing quotas, bonuses, commissions, and ratcheting, capturing how effort is timed over the compensation cycle. A field implementation of the resulting plan increased revenue by 9%.