Law firms bill clients by the hour. AI is beginning to reshape that model

Artificial intelligence is transforming the traditional hourly billing model in law firms by significantly reducing the time spent on routine legal tasks. According to Venkatesh Raman Prasad, partner at JSA Advocates & Solicitors, while AI tools can cut down time spent on document-heavy tasks, the impact on client bills depends on permissible use under engagement letters and matter complexity. AI has reduced research and documentation time by 20-30% and even more in big cases. Some law firms are adopting “hybrid billing,” a mix of fixed fees for AI-driven work and hourly billing for complex legal advice. With AI’s growing adoption, clients are demanding clarity on AI usage, and law firms are adapting to new billing models, with some experimenting with value-based pricing for research-heavy matters. Read Article