March 12 (Reuters) - (Billable Hours is Reuters' weekly

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The future of the billable hour was a burning question at

the LegalWeek conference in New York this week, where artificial

intelligence is dominating the annual legal technology

gathering.

Will an efficiency explosion fueled by AI leave clients

unwilling to pay lawyers hundreds or thousands of dollars an

hour? Will law firms charge even more but offer different

services? How will firms absorb the costs of AI tools that

clients are now demanding?

"These things are expensive," said Martha Louks, a technology

director at law firm McDermott Will & Schulte, in a panel

discussion on AI's impact on attorneys' work and what they

charge. "We are going to be burning through tokens," she said,

using the industry term for the small chunks of text AI systems

process and bill for.

About 7,000 lawyers, tech executives, computer scientists

and marketers jostled for space on an exhibition floor at the

Javits Center. Legal AI firms and startups demonstrated software

that can search through libraries of legal documents in the time

it takes a lawyer to send an email, draft and revamp contracts,

or uncover trends affecting a law firm's clients and suggest a

marketing pitch.

One of the participants, Swedish startup Legora, announced on

Tuesday that it had raised $550 million to expand in the U.S.,

reaching a $5.5 billion valuation. Vendors handed out swag, from

plushies and golf balls to sunglasses, branded with names like

Billables.AI and Litify. (Reuters parent company Thomson

Reuters, which also owns legal AI platform CoCounsel, was among

the participants.)

In a conference room above the exhibit hall, Oliver Roberts,

who leads an AI practice group at law firm Holtzman Vogel, said

AI "will 100% replace lawyers in the future." There was nervous

laughter in the audience.

A legal AI consultant Oz Benamram predicted at another

meeting that in three years, companies would use AI to do half

of the work they now pay law firms to do.

"Companies want fast results," he said - though he also said

clients would pay $10,000 an hour for human lawyers whose

judgment AI can't match. Other presenters said as AI automation

speeds up routine legal tasks, law firms could use their extra

time to offer more bespoke, complex advisory services.

Attorneys and product reps had to be turned away from some

meeting rooms due to overcapacity, including a workshop by legal

and compliance company Epiq for lawyers to learn how to create

their own AI "agents." Most participants were quickly

vibe-coding bots to analyze contracts or scour court websites,

while some struggled to get past the login screen.

A talk on "strategic legal leadership in the age of AI"

became standing room-only before event staff finally barred the

doors. Dozens of people still stood in line trying to get in -

possibly hoping to pitch their firms or products to the

Microsoft ( MSFT ), GSK, HSBC ( HSBC ) and Barclays executives who were

presenting.

Some participants acknowledged the stress of trying to adopt

such fast-changing technology or to beat others to market. No

one said they thought it was slowing down, or that AI was being

overhyped.

Two years ago, law firms had to promise their clients that

they weren't using generative AI on their cases, Susan Wortzman,

a partner at Canadian law firm McCarthy Tetrault told a roomful

of attendees.

"Now they are saying you must use it," she said.

- New York taps Winston's Jeffrey Kessler for Live Nation

antitrust case

The New York attorney general's office is turning to

antitrust veteran Jeffrey Kessler of law firm Winston & Strawn

to represent the state in its lawsuit against entertainment

giant Live Nation and subsidiary Ticketmaster.

Kessler joined the case in federal court in Manhattan after

the U.S. Justice Department, which brought the lawsuit with New

York and other states and was leading the case, said it had

reached a settlement with Live Nation.

U.S. District Judge Arun Subramanian, presiding over a trial in

the case, this week told Live Nation to negotiate with the

remaining plaintiffs after DOJ announced its settlement and left

New York and other states scrambling to take over.

Kessler has handled a string of high-profile competition cases

in recent years, including the sprawling multibillion-dollar

settlement involving U.S. colleges and universities paying

student athletes for the commercial use of their names, images

and likenesses.

New York declined to offer details on the state's engagement

with Kessler, including whether he is charging his standard

hourly rate or a reduced amount.

Kessler last year was charging nearly $2,000 an hour in

other cases, court records show. Kessler declined to comment. He

is working with a team from Winston, including Jeanifer

Parsigian.

- Plaintiffs firm founder faces California disciplinary

charges

The co-founder of a plaintiffs firm being sued by Uber

Technologies ( UBER ) is facing disciplinary charges stemming from

allegations that he and the firm represented clients in states

where they were not licensed.

Salar Hendizadeh, a founder of Downtown LA Law Group, was

charged on Monday by the State Bar of California's Office of

Chief Trial Counsel.

"The disciplinary charges allege violations of rules

regarding unauthorized practice of law that are intended to

protect clients by ensuring that they receive legal

representation from attorneys familiar with the legal rules and

practices that will apply to their claims," George Cardona, the

state bar's chief trial counsel, said in a statement.

The disciplinary complaint alleges that DTLA entered into

fee agreements with clients in seven states before learning

where the clients lived and before identifying local counsel.

Hendizadeh, who left the firm in September 2025, could not

immediately be reached for comment. Farid Yaghoubtil, a founding

partner at DTLA, did not immediately respond to a request for

comment, nor did DTLA's lawyers at Winston & Strawn.

Uber ( UBER ) is separately waging a federal lawsuit against DTLA and

others, alleging the lawyers conspired with medical providers to

create and submit artificially inflated medical bills. The law

firm has denied wrongdoing.

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