Source: The Law Society Gazette

The Law Society Gazette features a commentary piece that delves into the complex and increasingly urgent question of how law firms should bill for legal work that is assisted by artificial intelligence. The author argues that the traditional model of the billable hour is becoming fundamentally misaligned with the efficiencies introduced by AI tools. A task that might have previously taken a junior lawyer several hours to complete, such as legal research or document review, can now potentially be accomplished in a fraction of the time using a sophisticated AI platform. This creates a dilemma: should firms bill for the short time the AI took, thereby losing revenue, or should they find a new way to capture the value they are providing to the client through the use of advanced technology?

The article explores several alternative billing models that firms are considering. These include fixed-fee arrangements, subscription-based services for ongoing AI-powered support, or a value-based billing approach, where the fee is tied to the outcome or the value of the matter to the client rather than the time spent. The author also raises important ethical considerations, such as the need for transparency with clients about the use of AI and the associated costs. The piece suggests that a failure to adapt billing practices could lead to client dissatisfaction if they feel they are being overcharged for technology-driven efficiencies. Ultimately, the commentary concludes that the legal profession is at a crossroads, requiring a fundamental rethinking of how legal services are priced and delivered to align with the new realities of an AI-integrated practice.