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I Co-Founded an AI-Native Law Firm. Here’s Why That’s Not Just Hype.
By David Perla
We lawyers are trained to be skeptics and to question confidently asserted claims lacking evidence. Thus, it’s no surprise that, in a climate in which an increasing number of “AI-native law firms” are being launched, many lawyers roll their eyes and ask whether “AI-native law firm” really means anything. Having myself both co-founded an AI-native employment law firm and rolled my eyes a fair number of times, my answer is yes, with qualifications: “AI-native” means a lot, but only when a law firm built from day one around AI in its workflow, pricing, and staffing then actually delivers meaningful value to clients. In the following article I offer a four-point checklist to identify when “AI-native law firm” translates to value, and when it’s just hyperbole.
70+ Firms (and Counting) Are “AI-Native”
I understand the skepticism about increased use of the term “AI-native”. The numbers explain that skepticism. Firms listed on the AI Firm Index more than tripled in about eight months, from 23 in March to 76 as of November 3, 2026.
Among the in-house and law firm lawyers who have questioned overuse of the AI-native claim, Whitney Stefko of Ford told Law360 earlier this year, “We're seeing a lot of fancy marketing without true value.” Casey Flaherty of LexFusion Intelligence said the term is “wildly overused.” Matt Pollins, who created the AI Firm Index to separate out firms that are truly AI-native from those that merely throw the term around, compared the situation to the overstatements of the dot-com era.
I understand the skepticism, but when you separate signal from hype and ask what a firm does differently, and whether that creates value for the client, I stand by the term AI-native.
Is Skepticism About AI-Native Just Resistance to Change?
Arguably, there’s another factor at play in overly quick rejections of the AI-native term, and that’s a tendency among some lawyers simply to resist change. I’ve had the great good fortune to have had a front row seat at some exciting moments of transformation in the business of law, so I’ve heard this before, and I’ve learned to look for the critical distinction between hype and meaningful change. It’s simply this: value to clients.
Here are two examples of this client value distinction in action:
In 2004, I co-founded the legal services company Pangea3 with Sanjay Kamlani (with whom I also co-founded FairPlay Law, an AI-native employment law firm). Acquired by Thomson Reuters in 2010, Pangea3 offered clients a way to offshore their most tactical and repeatable transactional and litigation-related work, resulting in significant savings while preserving quality, table stakes for any legal department or law firm. At the time, some loudly criticized this offshoring, with one ABA Journal article asserting that managing partners were “wary of offshore-only entities” that “sparked debate… about ethical concerns”. As I said then, “No law firm should be doing commoditized work.” What settled that debate: value to clients.
In 2018, I joined Burford Capital, the world’s largest provider of commercial legal finance, where I remain Vice Chair. Since Burford’s 2009 founding, naysayers have questioned whether legal finance would ever be anything more than a tool of last resort for plaintiffs with no other means of paying their lawyers. A vocal minority also raised ethical questions. But 95 of the Am Law 100 have sought financing from Burford for their firms or clients, and much of Burford’s annual new business is with corporations (including Fortune 500 companies). Both law firms and companies rely on legal finance as a tool for their businesses. Again, the key here is value to clients.
The Real Test: Value to Clients
So what about being “AI-native” actually matters?
Certainly, simply using AI tools isn’t the test of value to clients. Clients expect firms to use AI, and many reportedly set that expectation out in writing for their legal providers and partners. If there’s a firm out there that’s not using AI in some form, I haven’t encountered it. Nor is the particular AI being used what matters. While some firms can afford to make huge investments in building proprietary tools, and while the era of AI adoption will be a capital-intensive period for law firms, as a general matter, every firm can license outstanding AI.
What’s distinctive is the business model of AI-native firms compared to firms merely bolting AI onto their practices. Law firms built with foundational AI in 2026 can design their pricing around it. Flat or deliverable-based fees are a natural fit, because the firm doesn't depend on billing hours that AI reduces.
Checklist: 4 Ways Actually Being AI-Native Benefits Clients
What does this look like for clients? Consider this four-point checklist to identify when “AI-native law firm” translates to value, and when it’s just hyperbole.
The client pays for the work, not the hours. Ask: is the law firm setting the fee based on the scope of work and/or the output? Is the fee published up front?
Lawyer time goes to judgment, not first reads. Ask: what does the AI do, and what does the lawyer do? AI is increasingly excellent at rapidly parsing documents to identify issues.
A lawyer is accountable on every matter. Ask: who reviews and signs off on what the AI produces? Clients should expect excellent human counsel from lawyers with relevant experience when dealing with AI-native law firms.
Clients the old model turned away find representation. Ask: is the firm willing and able to represent clients that a traditional firm would turn away for economic reasons?
Case Study: FairPlay Law
Having asserted that the key distinction between true AI-native firms and mere hype is value to clients, let me apply this checklist to FairPlay Law, the AI-native employment law firm I co-founded earlier this year:
The client pays for the work, not the hours. FairPlay publishes upfront, deliverable-based fees.
Lawyer time goes to judgment, not first reads. Clients can securely upload their employer documents with FairPlay’s affiliated technology company to receive a free report. AI does the first read of a client's employer documents, so the lawyer's time goes to analysis, advice and negotiation. After that, AI plays a role in nearly every step of the work we provide, with the exception of phone calls with opposing counsel and a very few other limited areas of work where only our people are involved.
A lawyer is accountable on every matter. When a client engages FairPlay Law, a licensed attorney works on the matter and is responsible for it, with several levels of engagement available.
Clients the old model turned away find representation. Our model lets FairPlay counsel and represent individual professionals who would otherwise struggle to find affordable representation. Many traditional firms also can't take employees as clients because they represent employers.
A Prediction: The Days of “AI-Native” Are Numbered
It may seem like a contradiction, but I firmly believe that “AI-native law firms” deliver real value to clients, for all the reasons cited above—and I also believe that the days of using the term “AI-native” are numbered. Why? For the simple reason that ideas that add value become so normalized that eventually, we don’t need special terms for them. Twenty years ago, when I co-founded Pangea3, people talked a lot about “LPOs”, but eventually, legal process outsourcing became so common and widespread that the term faded away.
I believe that something similar will happen with “AI-native”. Clients will become so used to the additional value they gain from working with law firms that build their processes and offerings with AI as a foundation that they will expect it of all their firms, in some fashion.
The key question, then, isn’t how meaningful “AI-native” is, but instead how quickly more traditional firms will evolve. And if you disagree with my argument about the value of “AI-native” now or in the future, I'd like to hear the test you'd use instead. Journalists, commentators, and anyone else covering AI, legal technology, and the business of law can reach me at david.perla@fairplay.law.
About the Author
David Perla is a co-founder and partner at FairPlay Law, an AI-native employment law firm that represents employees. He is also Vice Chair of Burford Capital. Earlier in his career, he co-founded Pangea3 with Sanjay Kamlani and served as its co-CEO until its acquisition by Thomson Reuters, and he later served as President of Bloomberg Law. He began his legal career at Katten Muchin Rosenman and was Vice President of Business & Legal Affairs at Monster.com. He holds a JD from the University of Pennsylvania Carey Law School and is admitted to practice in New York.
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