In a recent tweet, Aaron Levie, CEO of Box, sparked an important discussion about the future of AI in software by stating: “What’s under-appreciated about AI is how much it can expand markets when software can deliver outcomes, not just facilitate work.” This shift, as Levie suggests, could be especially transformative in industries like law, where AI has the potential to disrupt traditional models and create entirely new ways of delivering legal services.
Breaking Free from the Traditional SaaS Model
Levie’s observation touches on a key limitation of the current software-as-a-service (SaaS) business model, which typically operates on a “per seat” basis. In this structure, the number of users—and therefore the revenue potential—is tied to the number of employees within a specific department, such as legal or audit teams. However, Levie argues that AI has the ability to completely upend this model by allowing software to deliver not just tools for human use, but outcome-as-a-service, where the software itself performs the work.
The Constraining Nature of Per Seat Models
Currently, the dominant SaaS model depends on the number of employees in an organization. For example, legal software is limited to the size of the legal team, and audit software is restricted to how many people are on the audit team. This means that the potential market is inherently capped by headcount. Software solutions are thus largely geared towards organizations that already have an established team to use them.
This is often why SaaS products favor horizontal productivity categories, such as project management or communication tools, where everyone in the organization can be a potential user. However, industries like law, audit, or specialized fields still face this cap, where only team size dictates the software’s reach.
AI Flips the Model
AI is set to turn this model upside down. Instead of being bound by the number of employees, AI opens the door for software to perform tasks on behalf of the organization, effectively delivering outcome-as-a-service. This means that rather than enabling human employees to perform their jobs, the software itself can execute complex tasks, such as contract analysis or due diligence, and deliver the finished product directly.
AI opens the door for software to perform tasks on behalf of the organization, effectively delivering outcome-as-a-service.
In this new paradigm, legal software could, for example, handle the equivalent of an entire legal case review. The market size for these tools would no longer be tied to the number of lawyers in the office. Instead, even small legal teams or under-resourced firms could access the power of AI-driven legal solutions, vastly expanding the addressable market for these products.
Expanding Markets, Removing Barriers
Levie’s analogy to companies like Uber and Lyft is particularly fitting here. Initially, investors pegged their market size to the traditional taxi industry. However, when the convenience of ridesharing was introduced, the market expanded far beyond initial expectations. Similarly, when AI is integrated into legal software, the potential market extends far beyond traditional law firms.
Small businesses, underfunded departments in large corporations, and even legal practices in emerging markets could now access services once only available to large firms with expansive legal teams. With AI handling much of the groundwork, these organizations can benefit from the same level of service without needing a large in-house team.
AI in the Legal Profession: From Workflow to Outcome
The legal profession stands to benefit immensely from this transformation. Currently, legal software is designed to streamline workflows for lawyers, helping them with research, document drafting, or client management. But imagine a future where AI handles these workflows entirely, delivering finished legal documents or conducting initial case assessments. The software doesn’t just help lawyers work more efficiently—it produces the desired outcomes on its own.
As Levie hinted, this shift is not just a technical evolution; it’s a fundamental transformation in how software is valued and monetized. Instead of paying for access to a tool, companies could pay for the legal outcomes the tool delivers. This move toward Outcome-as-a-service would allow law firms to handle more cases with fewer human resources, lowering costs and increasing access to justice, particularly in smaller firms or underserved markets.
The Legal Industry’s Path Forward
As AI continues to evolve, the legal profession may need to adapt quickly to keep pace. Firms that embrace these technologies will find themselves better positioned in a landscape where clients demand faster, cheaper, and more accurate legal services. AI-powered legal software can offer everything from contract drafting to full-scale litigation support, enabling firms to compete in ways previously unimaginable.
Aaron Levie’s tweet touches on a critical realization that AI isn’t just about improving efficiency—it’s about fundamentally changing the game for industries like law. As the industry moves towards outcome-as-a-service, legal professionals must be ready to adopt these innovations and harness the true potential of AI to expand their markets and improve their practice.
