If you’ve been paying attention to legal tech headlines, you’re forgiven for thinking artificial intelligence is the existential threat to law firms. But there’s a bigger, faster-moving disruptor already reshaping the industry: Alternative Business Structures (ABS) and private equity-backed legal ventures.
In a recent episode of Legal Marketing Radio, I spoke with Steve Gursten of Michigan Auto Law about the seismic shifts he sees in legal business models. The conversation unearthed something critical: the future isn’t just about technology. It’s about values, expertise, and the human relationships law firms cultivate.
Arizona and Utah have opened the gates to non-lawyer ownership of law firms via ABS, pitching it as a way to increase access to justice. But in practice, about 40% of Arizona’s ABS licenses are going to firms targeting mass torts and single-event PI cases, not exactly access-friendly legal work. Instead of democratizing law, we’re watching capital flow into an already competitive, overcrowded market, further squeezing solo and small firms.
This isn’t about bringing legal access to underserved populations. It’s about bringing ROI to investors.
Behind the scenes, hedge funds and private equity firms are applying their usual playbook: flood the market, dominate high-margin segments, and consolidate power. And unlike traditional firms, they’re not bound by professional ethics in the same way. Their loyalty lies with shareholders, not clients.
Steve made a sharp comparison: we saw a similar shift post-Bates v. State Bar of Arizona in 1977, which greenlit lawyer advertising. That decision spawned today’s “TV titans” in PI law. ABS represents a second inflection point, but this one isn’t just about marketing reach. It’s about operational sophistication, ruthless efficiency, and economies of scale.
First, the lawyers who could afford billboards and airtime crowded out everyone else. Now, it’s the firms that can afford data scientists, CRM platforms, and acquisition algorithms. The result? Yet another widening gap between firms with scale and firms with soul.
ABS-backed firms bring business muscle: data-driven marketing, centralized intake, AI-assisted case screening, and armies of analysts optimizing every operational detail. And most law firms? They’re not ready. They’re not tracking KPIs. They’re overpaying for office supplies. They’re built on relationships and experience, not spreadsheets and software.
This imbalance is going to accelerate. And if you’re a small or mid-sized firm still running on intuition and hustle, you might feel the ground shifting beneath your feet.
Efficiency, in theory, is good. But when the metric becomes the mission, outcomes for real people can suffer. Imagine being a client whose tragedy is evaluated solely through a predictive algorithm.
That’s not just a different business model. That’s a different business ethos.
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Steve argued convincingly that the antidote to commoditization is specialization. Be the go-to expert in a niche area of law. Trial attorneys who earn a reputation for going the distance, for pushing cases to verdict, can demand higher settlements and better outcomes. Insurers know who tries cases. Their software knows too.
The numbers back this up. Insurers are willing to pay multiples—sometimes 4x more—based on the perceived trial threat of the opposing counsel. This isn’t myth. It’s math.
If you’re that kind of lawyer, you are not interchangeable. You’re not just another PI mill on the radar. You’re a wildcard, a threat, a name that raises eyebrows when it shows up on the demand letter. Want higher settlement offers? Be the lawyer who makes them nervous.
In an AI-driven world with tons of outsourcing and remote lawyers working in India and what have you, the one thing that they can never replace is a lawyer that makes an appearance in court and knows how to try the case.
-Steve Gursten, Michigan Auto Law
Trying to out-market or out-spend a PE-backed firm is a losing battle. So don’t play that game. Build community equity instead. Sponsor the local high school football team. Give distracted driving talks at churches and coffee clubs. Set up a scholarship. These moves won’t just make your brand memorable. They’ll make it human.
And that’s the differentiator PE firms can’t buy. Their model scales. Yours should resonate.
Community trust, earned over years, isn’t something you can import or fake. It’s the kind of brand loyalty that can’t be measured in ad impressions or clicks.
Let’s unpack how to operationalize this. Not with slogans or platitudes, but with real strategies that small and mid-size firms can implement today.
You don’t need a VC firm to show you your inefficiencies. Start with a brutal assessment:
Then fix the obvious leaks:
Operate like you’re preparing to pitch to a skeptical investor. Because in a way, your future clients are just that.
Being a generalist used to be a virtue. Now it’s a liability. Pick a niche based on search volume and competition in your market. It might be:
Build microsites. Write deep, expert content. Host webinars. Become synonymous with your niche.
But here’s the nuance: while traditional SEO, like title tags, on-page optimizations, and backlinks, still matters, it’s no longer the whole game. Algorithms are evolving. Local search is influenced by entity recognition, behavioral signals, and trust metrics.
Steve Gursten was an early adopter of SEO, and he’s built a powerhouse on that foundation. But he knows that Google is now looking for more than just keyword relevance. The search engines are evaluating brand signals: reviews, engagement, authority. They’re displaying firms that show up everywhere—on the web, in the community, in local news coverage.
So yes, when someone searches “[niche] lawyer [city],” your name should dominate the SERPs. But also ask: Are you cited by reputable sources? Do people search for you by name? Are you showing up in local conversations, not just search results?
Winning search now means being findable—and unforgettable.
You don’t need to try every case. But you need to be ready—and known—for trying any case.
In insurance databases, your reputation is a variable. Make it count. As Steve shared, insurers will pay dramatically more if your name signals “serious threat.”
Too many firms throw money at SEO or PPC but ignore the low-hanging fruit of online reputation. Here’s what matters:
Make your digital footprint reflect your analog excellence. The best firms do both.
Show up where no PE-backed firm can. Build ties no algorithm can mimic.
Brand equity comes from presence, not just prominence. And it compounds over time.
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Steve dropped a tactical gem: not every practice area is a battleground. Use keyword research and local competitive analysis to find underserved niches. Some high-intent legal verticals have surprisingly low digital competition. Others are saturated beyond reason.
Ask yourself:
Then act accordingly. Don’t be the 6,001st firm chasing “car accident lawyer” in a top-10 metro. Be the one firm dominating “bike accident lawyer” or “motorcycle TBI attorney” statewide.
There is still room for the independent firm. But the window is closing for those who want to stay generic, reactive, and invisible. If you don’t stand out, you’ll be drowned out. Steve said it best: the firms that thrive will be the ones that care. Not in a brochure. In court. In their communities. In the hearts of clients.
And that’s the one thing you can’t fake, can’t outsource, and can’t optimize away. It’s also the most powerful moat against an industry being overrun by capital.
Don’t try to be the biggest. Be the best.
Chung, Steven. (2025, January 29). Arizona’s Alternative Business Structure Program Improved Access To Justice For Tort Victims And Possibly Large Companies. Above the Law. Retrieved from https://abovethelaw.com/2025/01/arizonas-alternative-business-structure-program-improved-access-to-justice-for-tort-victims-and-possibly-large-companies/