The Death of the Billable Hour: Attorneys Beware & Prepare
- David Crum, Esq.
The billable hour is under threat. For over a century, the billable hour has been the cornerstone of law firm revenue. But recent shifts in technology and ethics are shaking its foundation. With the explosive growth of AI, legal work that once took six hours may now take 6 minutes. While this efficiency is good for clients, it creates a serious problem for firms that rely on hourly billing: less time to bill means less revenue.
The ABA’s guidance confirms that while AI can streamline tasks like drafting, research, and document review, attorneys must ensure transparency, maintain client confidentiality, and crucially—avoid inflating bills for AI-assisted work.
Why This Should Keep You Up at Night
If your firm relies on billing time rather than delivering value, you’re at risk. Firms already face pressure to cut hours or rates because clients know AI accelerates legal work.
Competitors adopting tech and new pricing models will win market share.
Ignoring this trend could leave your firm scrambling when clients demand predictable fees or leave for alternative providers leveraging AI at scale.
Too many attorneys are assuming they can “wait and see.” But the firms that fail to adapt their pricing models now will wake up in a few years to find that their competitors have already captured the market with client-friendly fee structures that better align with AI-driven efficiencies.
My Bet on the Future of Legal Services
The firms that thrive will align fees with value, not time. Moving to flat fees, often billed in stages tied to case milestones, solves both the ethical and business challenges.
Flat fees provide clients with transparency and predictability while allowing your firm to fully embrace AI without fear of shrinking billables. It positions you competitively and keeps you compliant with ABA ethics guidance.
While I haven’t transitioned US Legal Groups to this structure yet, it is what me and my executive team and currently working on. I adamantly feel that firms who adapt will survive. Firms that don’t will struggle. Book a Strategy Session with me if you want to discuss how your firm can find success today and in the future.
