Law firms should bill fewer hours when AI cuts time spent on work: Hyundai Motor India CLO

Law firms should reduce the number of hours billed to clients when artificial intelligence (AI) enables lawyers to complete research and other tasks significantly faster, Hyundai Motor India General Counsel Amitabh Lal Das said.

Das said that companies should not continue paying for the same number of man-hours when law firms use AI to improve their efficiency. He also expected AI adoption to bring down companies’ external legal expenditure.

He was speaking at a panel discussion titled AI and Legal Practice: Opportunity, Trust and Accountability, organised by the Legal Tech Committee of the Internet and Mobile Association of India (IAMAI) in New Delhi on August 17.

Das said that companies operating in sectors such as technology and automobiles frequently face novel legal issues. External law firms may not possess the knowledge required to immediately advise on such questions and may have to undertake research.

Clients had traditionally ended up paying for the time spent by law firms familiarising themselves with these issues, he said.

“What I, as a general counsel, would want to change is this: in the past, you were learning at my cost. There have been times when, in the billable hours that I went through, I was charged more for research than for the actual advice. Now, with AI, if you know how to use it for research, then please use it. Don’t charge me for it."

Das added that the same expectation applied to other work performed by associates.

“This also applies to a lot of the other things that you do. When you have an associate working seven hours to do something, maybe just building a few things, you can do it within ten minutes if you know how to use AI,” he said.

He, therefore, expected law firms to familiarise themselves with AI and use it for the benefit of their clients. Companies could also use these efficiencies to negotiate better legal fees, he added.

“Therefore, I am expecting that the cost that I incur as a general counsel, and as a company, is going to come down because of that particular thing."

The panel was moderated by AP & Partners Partner Arjun Sinha. It comprised Senior Advocate Chander Uday Singh and Advocate Harsh Kaushik.

Sinha asked whether AI would also change the manner in which legal services were priced. He questioned whether firms could move away from standard hourly billing towards outcome-based or performance-linked arrangements as AI reduced the time needed to complete legal work.

Singh said that AI could be a powerful legal research tool because it allowed lawyers to begin with a much wider range of material before narrowing their inquiry. However, he cautioned that AI must be used as a controlled tool and not as a source of ready-made answers.

"Generative AI could hallucinate judgments and tailor its responses according to what it believed the user wanted," he said.

He warned that experienced lawyers may be able to recognise a suspicious proposition or an answer that appeared “too perfect”, but younger lawyers could be particularly vulnerable if they relied on AI without independently verifying its output.

Kaushik said that lawyers would remain responsible for material ultimately presented to courts or supplied to clients.

A second panel titled Regulation, Innovation and the Digital Economy: Where Do We Draw the Line? was moderated by Bharucha & Partners Partner Kaushik Moitra. It comprised Senior Advocates Samar Bansal and Karuna Nundy, along with HP’s Associate General Counsel for Government Affairs and Public Policy in India Rajeev Nair.

Bansal said that digital regulation should be based on objective rules and leave as little discretion as possible with regulators and government bodies. Greater discretion increased the possibility of its misuse, he said. He also cautioned against mechanically importing European or American regulatory models. India needs solutions suited to its own economy and start-up ecosystem, he added.

Nundy warned that content takedowns under Section 79 of the Information Technology Act could bypass the safeguards applicable to blocking orders under Section 69A.

Nair said that the Digital Personal Data Protection framework established an important baseline. However, its effectiveness would depend on how government exemptions were interpreted and how independently the Data Protection Board functioned, he added.