I asked the man who ran Sidley Austin for seven years whether AI native law firms can compete with Big Law…

I asked the man who ran Sidley Austin for seven years whether AI native law firms can compete with Big Law for bet the company work.

His answer: "Not right now."

He runs the first AI native unicorn.

Mike Schmidtberger chaired Sidley's executive committee from 2018 until April 2025.

Eleven days into retirement he signed on to lead Norm Law, the AI native firm whose investors include Blackstone.

His reasoning: the most complex work, multiple jurisdictions, multiple regulatory schemes, transactions hybridized into something nobody has done before, lives in the heads of partners at the elite US and UK firms.

Too human.....for now.

He put middle market firms in the same bucket. Access to AI tools does not get them into that work either.

That is the good news for the Am Law 50.

However, roughly 80 percent of outside counsel spend is operate the company work. Financings. Fund formation. Investments. Real estate. Commercial agreements more involved than an MSA.

Mike's phrase for it: "high value but not highest value."

That operate the company work is where GCs want to see savings. Bet the company work is less price sensitive.

Norm staffs that work with partners who spent decades on the highest value work. His words: for them, operate the company work is like riding a bike.

The agent does the first pass at roughly third year associate quality. The first human touch happens at the senior associate or partner level.

Pricing is a flat fee per document or per transaction. No hours anywhere in the model.

Mike also told me Norm Law exists for three reasons, and the third is to be used as a cudgel against legacy counsel rates.

So the ceiling on AI native firms is real. It sits at the top 20 percent of legal work.

The floor rising under the other 80 percent is what Big Law should be worried about.

Full conversation on Legal Innovation Spotlight this week.