The Question Behind the Question. And the One Behind That.
I spoke to a group of law firm administrators recently.
One of them asked me how to monetize AI. It mattered enough that they set up a follow-up call and brought several partners. This is a firm already using one of the prominent AI platforms. Not asking how to use the technology. They’ve got that handled.
We were about ten minutes into the conversation when the real question surfaced.
The Question They Were Actually Asking
It wasn’t about AI. It wasn’t really about billing.
It was: can we tell which of our matters are actually profitable?
Revenue they knew. But margin — which matter types, which clients, which practice areas were actually making money versus keeping people busy — they couldn’t answer that cleanly.
Once that question was on the table, the AI question almost answered itself.
Why Most Managing Partners Can’t Answer It
I ask this question fairly often: “Without looking anything up — which matter types in your firm are most profitable?”
Most people pause.
Some can give rough directional answers. “Estate work is good for us. Litigation is harder to predict.” Some can point to a practice area that feels profitable.
But clean, precise answers — margin by matter type, not just revenue — are rare.
There are reasons for this. The numbers are buried in practice management software that doesn’t surface them easily. Nobody’s built the report. The billing data and the time data live in different places. The person who would pull this together is already drowning in everything else.
All of that is true. And none of it changes the problem.
What Depends on That Answer
Here’s what you can’t decide well without knowing your profitability by matter type.
Whether your billing model makes sense. If you’re moving toward fixed fees or alternative billing, you need to know which matters have enough predictability and margin to price with confidence. You can’t price what you don’t understand.
Where AI efficiency actually helps YOUR firm — not the firm your vendor is pitching to. AI creates the most value where your work is high-volume and low-margin. But you have to know where that is first.
Whether to grow a practice area. Whether to say no to certain work. Whether a hire makes economic sense.
All of it comes back to the same question.
The Pattern Underneath It All
The firm came in with an AI question. The AI question was really a billing model question. The billing model question was really a profitability question. And underneath the profitability question was a decision that had been sitting on the table for a while — and avoided.
The presenting problem is almost never the real one.
I see this in nearly every conversation. Managing partners come in with surface questions — AI, succession, team retention, growth — that are almost always stand-ins for something underneath. A decision they haven’t made. A number they haven’t run. A conversation they’ve been putting off.
Chasing the surface question gets surface answers.
Pull the numbers. Or ask someone to pull them for you.
What did you bill by matter type in the last 12 months? What did you collect? What did it cost in attorney time?
You don’t need it perfect. You need it directional. Get it in front of you.
That’s the starting point for most of the big questions managing partners are sitting with right now — AI, billing, capacity, growth.
One more thing. Some of you have these numbers. You know where your margin lives. And you still can’t make the call.
That’s a different problem — and we’ll get to it next week.
For now: if you’re sitting with any of this, I still have a handful of diagnostic calls available in June. Send me an email at doug@dougbrownjd.com and tell me what you’re working through.
Beyond the Practice Grind publishes most weeks. If this made you think about the question underneath your question — feel free to forward it.