This is the question firms find hardest, because the honest answer threatens the model the firm is built on.
Start a conversation with the AI Adoption Concierge, already scoped to billing, pricing & fees. Choose the question closest to yours, or describe your situation directly.
Generative AI creates a problem the billable hour has no good answer to. If a task that took five hours now takes one, billing one hour is a substantial revenue cut for identical value delivered — and billing five is not defensible. Estimates of the scale vary, with some analyses putting the time freed on the order of 240 hours per lawyer per year, but the direction is not in doubt. ABA Formal Opinion 512, the ABA's first ethics guidance on generative AI, addresses fees directly among the duties it covers, and jurisdictions have already begun to diverge on the answer. This is a business-model question wearing an ethics question's clothing, and firms that treat it as purely one or the other tend to get it wrong.
Three connected problems: what may be billed, what should be charged instead, and what the client is told.
What may be charged when the work took a fraction of the time — and where the guidance actually lands.
investigateFlat, capped and value-based pricing — what each requires the firm to be able to predict.
investigateWhat to tell clients, when, and why outside counsel guidelines often get there first.
investigateHow the Institute approaches the fee question — frameworks and trade-offs, never advice on what your jurisdiction permits.
This is precisely the question ABA Formal Opinion 512 addresses in its treatment of fees, and the general principle it reflects is that a lawyer may not charge for time not actually expended. Billing five hours for one hour of work is not made acceptable by the fact that it used to take five. What remains genuinely open is the treatment of value-based and flat fees, where the connection to hours is looser by design — and that is where jurisdictions have started to disagree rather than converge.
On whether a non-hourly fee may stay the same when AI has substantially reduced the effort. Virginia has taken the position that charging the same non-hourly fee for AI-assisted work is not per se unreasonable, reasoning that a flat fee prices the outcome rather than the hours. ABA Formal Opinion 512 sounds a more cautious note, warning that a flat fee may be unreasonable where AI has drastically reduced the effort required. A firm operating across states cannot assume one answer, and this is squarely a question for its own counsel.
It depends on the circumstances, and the guidance points at two triggers in particular. ABA Formal Opinion 512 recommends disclosure in engagement letters where AI use is relevant to the basis of the fee, and where confidential client information will be processed by the tool. Beyond the ethics rules, many institutional clients have moved first: outside counsel guidelines increasingly address AI use, disclosure and sometimes pricing, and firms frequently discover their client has taken a position before they have.
It is under more pressure from this than from any previous technology, and that is a different claim from ending. What is visible is expansion of flat-fee and value-based arrangements for exactly the work AI accelerates most — the routine, high-volume, predictable end. The complex and genuinely uncertain work, where nobody can price the outcome in advance, is far less exposed. The realistic expectation is a widening split within firms rather than a single model replacing another, which is harder to manage than either extreme.
Describe your practice mix and current pricing. The Institute will help you think it through — your own counsel decides what your jurisdiction permits.