Why Legora's CEO is betting that every software company ends up ditching the seat

Max Junestrand, CEO of Legora, a legal tech software company, is transitioning from a traditional subscription-based model to a pay-as-you-go pricing structure. This shift is driven by the increasing usage-based economics of software, particularly with the integration of AI models. Traditional software companies have historically charged based on the number of licenses or seats, regardless of user activity.

However, AI models consume varying amounts of computing power depending on the tasks performed, leading to unpredictable costs for users. Legora's decision to introduce usage-based pricing for its AI-powered features, such as Legora Agent, which automates tasks for junior lawyers, allows users to pay only for the resources they consume.

While some law firms have welcomed this change, citing the ability to track costs directly to specific matters, others remain skeptical, particularly those still evaluating AI's role in their workflows. The shift towards usage-based pricing also poses challenges for software providers, as heavy users can lead to escalating costs and debt obligations to underlying model providers.

While some competitors, like Harvey, continue to offer seat-based pricing for stability, the legal tech industry appears to be moving towards a more flexible, usage-based pricing model in response to the evolving landscape of AI-driven software.