Once upon a time, associates tasked with legal research would scour library stacks, pouring over case reporters and manually pulling references from books. Research took hours—if not days—and billable time was stacked high for clients. The longer the research, the heftier the invoice. Young associates would spend hours poring over volumes of the United States Code, the Federal Reporter, and other primary sources. Microfiche and film copies of court opinions were also common, requiring meticulous note-taking and manual indexing. The Cornell Law Library's print-based annotated laws and the American Law Reports (ALR) were staple resources. Associates would also use books, such as Shepard's Citations, to verify the accuracy of citations. Throughout this process, associates would have to maintain meticulous notes and create a manual index of the cases and statutes reviewed, providing an organized way to reference findings later.
In September 1997, LexisNexis debuted the first Web-based service for U.S. legal professionals, the precursor to LexisNexis™. The platform transformed legal research by digitizing vast libraries of case law, statutes, and secondary sources. Suddenly, the search became faster and more precise.
Likewise, Shepard’s Citations also transformed in the 1990s. Before that, the manual process of “Shepardizing” involved cross-referencing case citations in thick volumes, ensuring that cited precedents had not been overturned or negatively treated. This task, which was grueling and prone to error, often consumed entire workdays for junior associates. Digitization enabled practitioners to quickly track changes to case law through integrated online databases.
The “catch”? Fewer hours were needed, meaning less billable time. But law firms did not lose out; instead, they began charging clients for access to these premium databases. Lexis and Westlaw fees became common line items, reflecting a shift from billing solely for time to billing for the technological tools that enhanced service delivery. Clients accepted these charges because they saw the value in getting accurate results faster.
When Lexis, Westlaw, and digital Shepardizing became standard, firms introduced fees specifically for access to these premium research tools. Clients were billed not just for the time spent by attorneys, but also for the value brought by using these advanced technologies. This shift highlights an important lesson: technology adoption initially sparks resistance, but as clients see the benefits—faster results and higher-quality insights—they are willing to accept new billing models. The key for law firms is to be proactive in explaining and justifying the value of these tools. Of course, over time, fees for services like Westlaw and Lexis decreased due to factors such as ethics opinions, client pressures, competition, and other market forces. However, it is important to remember that law firms passed those technology costs directly onto clients at the beginning, and in various creative ways as time went on. Moreover, it is important to remember that the steep reduction in billable hours due to faster online research did not diminish law firms’ profitability. They have continued - and will continue to thrive - by embracing the right technology and adapting to innovation.
Today, too, with the rise of generative AI (GenAI), we are amid another transformative moment. While this new wave of technology is broader in scope, the history of how we embraced the digitization of legal research offers valuable guidance. By reflecting on some of these pivotal moments in our industry we can uncover insights into how law firms can adapt to these changes rather than resist them. The key lies in understanding how efficiency gains, billing models, and client expectations evolved in the past and applying those lessons to today’s rapidly changing landscape.
Just as Lexis, Westlaw, and digital Shepardizing automated labor-intensive tasks and reduced billable hours, GenAI will extend those efficiencies across a broader range of legal functions—document review, contract analysis, legal drafting, and more. Critics may argue that the output is still imperfect, but the same can be said of junior associates, yet no one questions their value. These tools are not replacing human oversight; they are enhancing it. The reality is that GenAI is already boosting efficiencies in many areas of legal practice and will only improve. To look the other way is not only shortsighted, but also foolish.
Instead of focusing solely on reasons to avoid GenAI, law firms should prioritize exploring how to use it ethically, responsibly, and profitably. One of the questions firms need to ask is how to adapt their billing models to align with this new, GenAI driven landscape. While it is too early to have all the answers, we need to start looking into scenarios and strategies to help navigate this transformation:
GenAI will dramatically reduce the hours needed for tasks like document review, due diligence, and contract drafting. Suggestions:
With the advent of online research, there was a shift from manual billing for hours spent researching to charging for access to technology. By reflecting on this history, firms can proactively design pricing models that reflect the value GenAI brings—focusing on the outcome rather than the input. Adapting to new approaches can unlock new revenue streams and increase client satisfaction. Rather than billing for hours worked, they can focus on the outcome or strategic value delivered. Strategy:
The legal profession has historically been slow to adopt new technology. The introduction of online legal research tools was initially met with skepticism, as was the transition from typewriters to word processors. Similarly, early resistance to GenAI echoes those same fears—concerns over accuracy, control, and potential job displacement. However, history shows that once the benefits become clear, the resistance fades. The firms that embraced digital research early gained a competitive advantage, and the same will be true for those who integrate GenAI effectively.
Just as the adoption of Lexis and Westlaw required legal professionals to develop tech-savvy research skills, the rise of GenAI will require a new hybrid skill set. Legal professionals must now combine their legal expertise with an understanding of AI-powered tools. This evolution in roles mirrors what happened when firms began hiring legal professionals proficient in using digital research databases. The firms that upskill their teams to meet these new demands will be better equipped to thrive in the GenAI era.
The shift to Lexis and Westlaw was driven by client demand for faster, more cost-effective services. Clients increasingly questioned the value of being billed for hours spent manually researching. GenAI presents a similar challenge and opportunity. Clients today expect legal services that are both timely and strategically valuable, rather than purely process driven. Law firms that embrace GenAI will be better positioned to meet these expectations, offering solutions that are both efficient and results oriented.
Before online research tools, larger firms with extensive libraries held significant advantages. Lexis and Westlaw democratized access to legal knowledge, allowing smaller firms to compete by leveling the playing field. GenAI holds a similar promise by democratizing advanced legal services. Firms of all sizes can now access powerful AI tools that enhance everything from legal research to predictive analytics. The firms that adapt will be better equipped to compete, regardless of size or resources.
The move from manual research to digital databases freed up lawyers to focus on higher-level strategic work rather than routine tasks. GenAI takes this a step further by automating even more of the mundane, allowing legal professionals to concentrate on strategy, creativity, and client service. History shows that when routine work is automated, legal professionals can provide greater value by focusing on what truly matters—delivering insights and making impactful decisions.
The legal industry has consistently been shaped by market competition and regulatory pressures. When Lexis and Westlaw emerged, firms that quickly adopted these tools gained a competitive edge, compelling others to follow suit. Another example can be observed in the evolution of e-discovery. Likewise, it transformed tasks that were previously done manually, and law firms had to adapt. Law firms learned how to bill for e-discovery, how to deal with the rise of managed and alternative service providers, the era of contract attorneys; all driven by market forces. Today, as the market increasingly pushes for GenAI adoption, we will see a similar trajectory. Firms that jump into the band wagon early will be better positioned to navigate these pressures and remain competitive.
The shift away from billing clients for LexisNexis and Westlaw dates to the early 2000s. Before that, law firms commonly passed along full costs to clients. However, as the legal industry evolved, clients began demanding change, labeling certain costs as overhead. This led many firms to absorb the costs themselves, recognizing that the value of these resources was essential to their business, or they figured out alternative ways of billing for those costs. Today, few firms openly bill clients for LexisNexis and Westlaw usage, instead they use negotiating bundled rates, in-house subscription models, higher rates for billable hours, or other ways.[i] Similarly, we may see at the beginning a more aggressive fee structure around GenAI costs. However, as they become more integrated with the practice and true value billing starts taking shape, we should see a similar trajectory—where fees become more predictable and integrated as both clients and firms adjust to the new normal.
The evolution from manual Shepardizing and library research to digital tools like Lexis and Westlaw set the stage for what is happening today with GenAI. Law firms have already adapted to new billing models once before, and they can do it again. By embracing innovative pricing strategies, upskilling their teams, and educating clients on the benefits of AI-powered tools, firms can position themselves at the forefront of this new era—just as they have done before.
