Legal Geek North America’s Chicago conference opened with a striking address from Gina Passarella, chief content officer at Centellic, setting an urgent tone for the industry.
Passarella delivered a 10-minute opening talk that drew a sharp picture of where the legal market stands as artificial intelligence reshapes client expectations and business operations.
Her central argument was blunt: for outside law firms facing pressure from clients, “it’s their work to lose” right now, with the balance of power shifting decisively toward in-house teams.
Centellic, which operates under ALM and maintains close oversight of the legal industry, gives Passarella a uniquely informed vantage point from which to assess where the profession is heading.
She described the current moment as a once-in-a-generation period of change, noting that while the legal sector has navigated major shifts before, the current disruption is categorically different in scale and speed.
From the in-house perspective, Passarella outlined extreme and mounting pressures, with business leaders demanding that AI tools be deployed to reduce costs and that outside legal spend be cut significantly.
She also identified a growing frustration among business leaders with in-house counsel who continue to approve rate increases from outside firms without serious scrutiny or resistance.
More sophisticated in-house teams are not waiting for outside providers to adapt, according to Passarella, with many already seeking alternatives if their existing firms fail to demonstrate meaningful efficiency gains.
Those alternatives are multiplying rapidly, with AI-first law firms and hybrid legal providers growing in number and attracting clients away from traditional firms that are slow to change their operating models.
Passarella also pointed to major technology companies entering the legal space, naming Microsoft, Anthropic, and OpenAI as forces that are further disrupting the competitive landscape for incumbent law firms.
Her assessment of how traditional firms are responding to these pressures was pointed and unflattering, describing most firms’ current AI strategy as “using AI but not changing how they operate.”
Research cited by Passarella revealed that over half of law firms leave their CIO teams to set and run AI strategy, a structural problem given that few CIOs have a direct line to firm leadership.
That disconnect results in expensive technology going unused because it does not meet lawyers where they actually work, creating a costly gap between investment and meaningful adoption.
Biglaw hiring practices illustrate the broader failure to reckon with new realities, with many firms hiring law school graduates in record numbers without accounting for AI’s likely impact on the need for junior associates.
The rationale, as Passarella described it, is that demand is strong right now and firms simply “don’t want to leave any money on the table,” a short-term calculation that may carry long-term consequences.
On rate increases, Passarella was equally direct, expressing her view that firms cannot continue using them as a mechanism to offset revenue losses caused by AI-driven reductions in billable hours.
Perhaps the most significant observation in her talk was that in-house counsel who have historically accepted the status quo will now be forced by their business leadership to demand real change from outside firms.
The firms that cannot hear that message, or choose not to, may find themselves in a position not unlike a senator in a close race who ignored warnings that he was running out of gas, and ultimately lost.