60% of lawyers’ work has vanished. An AI has won a literary award. Does your company’s ‘product’ still have a price?

Let’s get straight to the point. Jobs that were priced based on ‘time spent’ are collapsing one after another. And this is not just a story about lawyers and writers; it’s a reality for local SMEs tomorrow.

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The ‘Hourly Rate’ for Lawyers is Becoming Unsustainable

What is happening in the American legal industry right now?

According to a Thomson Reuters survey, the use of AI for legal research and document review has reduced traditional working hours by up to 60%. Tasks that junior lawyers used to spend dozens of hours on, such as case law research, can now be completed by AI in just a few minutes.

Consider this: the compensation structure for lawyers is fundamentally based on ‘time charges.’ Rates can be 30,000 yen, 50,000 yen, or even 100,000 yen for large firms. In other words, the more time spent, the higher the revenue.

What happens when AI cuts that time by 60%? Revenue drops by 60%.

In fact, some law firms in the U.S. are starting to face questions from clients like, ‘Why are you charging full rates for work that could be done quickly with AI?’ A Goldman Sachs report estimated that 44% of legal-related tasks could be automated with AI.

This is not just a story of ‘efficiency.’ It’s a collapse of the business model.

When the premise of ‘selling time’ disappears, what can be sold instead? Firms that cannot answer this question will exit the market.

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AI Wins a Literary Prize—Does ‘Human-Made’ Hold Value?

In 2023, Rie Kudō won the Akutagawa Prize for her novel ‘Tokyo’s Sympathy Tower,’ which she wrote using ChatGPT. This sparked discussions about the role of AI in literature. Additionally, in 2022, an AI-generated image won first place in an art contest in Colorado, sending shockwaves through the art world.

Let’s clarify the shift in value that is occurring here.

Traditionally: Being able to create well = value. Skillful writing or art was considered rare.

Currently: AI can mass-produce ‘good creations.’ As a result, the market price for ‘skillfulness’ is plummeting.

So, what can still be priced?

One aspect is the fact that it is ‘human-made.’ In the art market, there is a growing trend to label works as ‘Human-made.’ This is akin to handmade pottery being priced higher than mass-produced plates. It represents a ‘human premium.’

Another aspect is the power to decide ‘what to create.’ This means planning ability and the capacity to ask questions. AI can write if you tell it to, but it doesn’t decide ‘what should be written’ or ‘who it should be delivered to.’

This structure applies directly to the field of SMEs as well.

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A List of Jobs Approaching Zero Cost—Are They Present in Your Company?

It’s not just lawyers and writers. Let’s list some tasks where costs are dramatically decreasing.

• Translation: Once priced at 10 to 20 yen per character, now nearly zero with DeepL or ChatGPT. Hiring professional translators has shifted to ‘final checks.’
• Design: Outsourcing logo creation used to cost 100,000 to 500,000 yen. Now, with Canva and AI, even amateurs can create decent designs for just a few thousand yen.
• Minutes Preparation: In the past, human transcription cost 10,000 to 20,000 yen for an hour. Now, AI transcription tools can do it for a few thousand yen per month, with practical accuracy.
• Code Generation: Developing a simple web app used to exceed 1 million yen when outsourced. Engineers using GitHub Copilot can reduce development time by more than half.
• Customer Support: There are multiple reports of cases where implementing chatbots has reduced inquiry response costs by 70%.

What these have in common is that they are all jobs that were previously priced based on ‘time spent working.’ When AI brings that time close to zero, the price approaches zero as well.

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Research Suggests ‘Using AI Reduces Persistence’—The Real Issue

Here’s a noteworthy study. A research team from Microsoft Research found that even short-term use of AI tools tends to decrease persistence in subsequent tasks.

Interpreting this as ‘therefore AI is dangerous’ is superficial.

The real issue is whether we can distinguish between tasks that can be delegated to AI and those that require human persistence and thought.

In the context of SMEs, creating estimates or organizing data can be handed off to AI. However, if we outsource the thinking behind ‘what proposals to make for this client’ or ‘what initiatives to pursue in this market,’ we risk eroding the company’s competitive edge.

AI increases the ‘time we don’t have to think.’ What we choose to think about in that freed-up time is the crucial point.

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The ‘Reversal Structure’ for SMEs

Now, let’s get to the main topic.

The collapse of costs due to AI is a story of ‘efficiency’ for large corporations. However, for SMEs, it carries a much larger significance: the sudden ability to enter areas that were previously inaccessible due to financial constraints.

Here are some concrete examples.

• Multilingual Support: Large companies had translation teams. SMEs couldn’t afford that. Now, with AI translation, even a company with five employees can cater to overseas clients at almost zero cost.
• Marketing Analysis: Previously required consulting contracts costing tens of thousands of yen per month. Now, feeding data to ChatGPT can yield reasonable analyses. It may not be perfect, but the difference between zero and ‘reasonable’ is substantial.
• Legal Checks: Contracts that required paying a lawyer 50,000 yen per month for reviews can now be checked with AI legal tools for just a few thousand yen per month. Of course, the final judgment is still human, but costs are reduced to less than one-tenth.
• Recruitment and Training: Manual creation of manuals, FAQ development, and training materials used to rely on ‘someone spending time to create them.’ Now, AI can generate drafts instantly, allowing humans to finalize them. This transforms previously individualized know-how into structured processes.

What used to cost 3 million yen can now be done for 50,000 yen. This change signifies that the excuse of ‘we can’t do it because we don’t have money’ disappears.

Conversely, the ‘advantages that large companies had by spending money to secure their position’ dissolve. For SMEs, this represents a historic opportunity.

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‘So, What Should We Do?’

I’ll make three points.

1. Identify the parts of your business where you are ‘selling time.’

Estimate creation, document preparation, data entry, research, report writing—these tasks can dramatically reduce costs with AI. If costs can be lowered, do it quickly. Before your competitors do.

2. Invest the saved time in ‘judgment’ and ‘relationships.’

What AI cannot do is read the expressions of customers in front of you, understand the local context, and build trust that makes people think, ‘I want to rely on this person.’ This is where SMEs have their unique strengths.

3. Experiment on a small scale. Start today.

You don’t need a perfect implementation plan. Summarize minutes with ChatGPT, have Claude identify issues in contracts, or create flyers with Canva. Start with experiments that cost a few thousand yen per month. Judge for yourself what is ‘usable’ and ‘not usable.’ That experience will inform your next strategy.

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What Lies Beyond Costs Approaching Zero

Finally, I leave you with one question.

When the cost of ‘creating’ with AI approaches zero, what will ultimately hold value?

I believe the answer is ‘the power to decide what to create’ and ‘the context of who created it.’

The former is strategy, and the latter is brand. Both cannot be acquired overnight. That’s why it is meaningful to start building from today.

AI is a tool. When the cost of tools decreases, the differentiation lies with the humans who wield them.

Local SMEs are in the best position to benefit from this change. The only question is whether they will take action.