Generative AI is poised to disrupt many aspects of legal work—but perhaps none more fundamentally than pricing.
As law firms in both the UK and US grapple with how to integrate AI tools responsibly and effectively, a bigger question is emerging: if AI can handle certain tasks in seconds, how long can we justify charging by the hour?
Rethinking the Value of Time
The billable hour has long been the backbone of law firm economics. It’s familiar, measurable, and profitable—for now. But as Generative AI tools increasingly support or automate research, drafting, document review, and even elements of litigation strategy, time-based billing starts to look increasingly out of step with how value is being delivered.
Clients Are Asking New Questions
Clients, especially in-house counsel under pressure to cut costs and improve predictability, are already raising questions. Why should they pay for hours that a machine didn’t actually spend? If a memo that used to take four hours now takes 15 minutes with AI support, how does that affect pricing, transparency, and expectations?
From Time to Outcomes: A Shift in Mindset
In this evolving landscape, law firms will need to think differently about how they define and communicate value. A growing number of clients are pushing for pricing models based on outcomes, deliverables, or fixed fees. GenAI could accelerate this shift—not because it makes lawyers less valuable, but because it forces a rethinking of what clients are really buying: legal insight, risk mitigation, strategic judgement—not just time.
New Models, New Opportunities
For firms, this opens up new opportunities as well as challenges. Traditional hourly billing is not only under scrutiny, it’s also becoming harder to defend when productivity is augmented by machines. Embracing GenAI means re-evaluating workflows, reassessing pricing models, and investing in training to ensure teams know how to use these tools efficiently and ethically. It also means having difficult but necessary conversations—both internally and with clients—about how to share the benefits and cost-savings AI can deliver.
Innovation in Action
Some firms are already experimenting. In both London and New York, AI-powered tools are being used for contract analysis, due diligence, and even trial prep. Fixed-fee projects supported by AI are allowing firms to scale services and remain competitive with alternative legal providers and Big Four legal arms. The firms that succeed will be those that can blend human expertise with technological efficiency—while pricing according to results, not effort alone.
Risk, Trust, and Transparency
Of course, risks remain. There are concerns about over-reliance on GenAI, quality assurance, and regulatory scrutiny, particularly around confidentiality and data protection. But none of these are good reasons to avoid the conversation about pricing. If anything, they highlight the need for clear guidelines and transparent engagement with clients around how AI is used and how its use affects value.
Pricing for the AI-Enhanced Legal Future
For both UK and US lawyers, the message is clear: GenAI isn’t just a tool—it’s a catalyst for a broader transformation in legal service delivery. Moving beyond the billable hour won’t happen overnight, but the direction of travel is unmistakable.
As legal markets evolve and clients become more informed and assertive, firms that cling to legacy pricing models may find themselves outpaced by more agile, tech-enabled competitors.
Breaking free from the billable hour isn’t just about billing—it’s about rethinking what legal services mean in an AI-augmented world. The firms that get this right won’t just be faster or cheaper. They’ll be better aligned with what clients truly value: clarity, confidence, and outcomes.
