Salesforce President and Chief Legal Officer Sabastian V. Niles recently published an open letter to law firms, and the industry should take it seriously. His message: the legal industry is at an inflection point, AI is no longer optional, and firms clinging to old models risk becoming obsolete. In the open letter, Sabastian likened the moment to Clayton Christensen’s “Innovator’s Dilemma”: the pattern where entrenched market leaders, blinded by comfortable incumbency, fail to see the disruption coming until it’s too late.
He is not alone. April Miller Boise, most recently Chief Legal Officer (CLO) at Intel made a relative point that “the pace of legal services has changed quite a bit. The pace of what happens in-house is very different than the pace that law firms move at. And I think sometimes in-house lawyers, CLOs in particular, get a little bit frustrated with legal counsel outside because we don’t always have the luxury of, you know, kind of waiting for a lot of research to be done.“
She should know, she’s seen it from both sides. Before she went in-house she spent many years in law firm practice and when she left, was managing partner at Dinsmore Schohl.
I recently had the chance to talk to both Sabastian and April on the Technically Legal Podcast. I agree with both of them, but I left the conversation wishing I had pressed harder on one point: the role clients must play in actually driving change.
Sabastian acknowledged that his open letter is”a first salvo”, that is, a signal from clients that law firms had better get serious about change. But he has more leverage than just a letter. Clients ultimately pay the bills, which gives them the power to drive change.
We’ve Had This Conversation for Years
The legal community’s conversation about modernization is not new. Whether it’s the billable hour, inefficient workflows, or poor communication with in-house teams, the topics change slightly but the conversation doesn’t.
The proof was on display recently at CLOC Global Institute, in a session titled “What Do Law Firms Still Not Understand About Legal Ops?” The very first answer to the question of “what do you wish outside counsel knew about legal operations?” was cheeky, but not off base: “That they exist.”
The answer was obviously in jest, but gets at a real issue. Law firm inertia stems partly from genuine structural impediments to change. Most lack the technology architecture and buy in required to innovate the way nimble legal services provider can. Maybe even more signficantly, the partnership model itself, built on individual origination and billing, doesn’t naturally reward firm-wide investment in shared infrastructure.
These are real operational constraints, and in-house legal teams must understand as they consider how to influence their outside relationships.
Clients Hold the Lever
Niles made the point that some clients are already “too far ahead” of their outside counsel in matters of technology and innovation, and that is a dynamic that should concern both sides.
In-house legal teams, especially at larger companies, have resources and incentive to adopt AI-powered workflows faster than law firms can match. On the other hand, in the much larger universe of mid-market and growth-stage companies, flat budgets, rising workloads, and mounting pressure to reduce outside counsel spend are forcing legal departments to find smarter solutions, not just cheaper ones.
Both groups share a common problem: the firms they’re paying to handle their most important legal work are largely operating the same way they were ten years ago.
Change in law firm behavior, historically, has followed client demand. The adoption of e-billing, outside counsel guidelines, and even basic project management discipline all came because clients required them. AI will be no different. Firms will respond when in-house legal team require that proposals articulate how AI is being used to drive efficiency, or that alternative fee arrangements be tied to demonstrable output.
See how attorney-led judgment and AI-enabled workflows work together in practice.
The Standard Has Already Shifted
While law firms have been debating the question of AI adoption, others have been answering. Alternative legal service providers (ALSPs) and tech-forward legal communities are using AI-assisted workflows for document review, contract redlining and management, regulatory compliance, and intellectual property management as part of ordinary legal operations, not experimental pilots.
One of those new tech-forward legal communities, the LegalQuants, puts it plainly: The next generation of elite legal work won’t hinge on who has the best “AI tool,” but on who has the rare ability to design, evaluate, and deploy any available tool to reimagine how lawyers create and deliver legal services. The industry overhypes tools.
That philosophy reflects where in-house teams actually are. They don’t need law firms with AI initiatives and vendors with better pitch decks. They need partners who are already doing the work and who can demonstrate it.
Sabastian and April both cite a problem that many in-house leaders have felt but not said loudly enough. The next step is for those same leaders to back their expectations with buying decisions. When that happens, the market will move. It always does.
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