Your associate uses AI to draft a motion in 45 minutes that used to take three hours. Do you bill 45 minutes or three hours?
Every managing partner running a firm will face this question. The ethics rules already have an answer.
Existing rules apply
ABA Model Rule 1.5(a) requires that fees be reasonable. ABA Formal Opinion 93-379 (1993) established that a lawyer may not bill more time than actually spent on a task. That opinion addressed billing practices generally, including recycled work product and double-billing, but the principle holds: you cannot charge a client for time you did not spend.
ABA Formal Opinion 512 (2024) applied this directly to generative AI. Lawyers using AI tools must ensure their fees remain reasonable in light of the reduced time and effort involved. If AI cuts the time a task takes, your billing should reflect that.
You bill for the time spent, not the time it used to take.
Westlaw solved this already
When Westlaw replaced manual digest research in the 1980s, firms faced the same question. A research task that took six hours in the library took 45 minutes online. Nobody billed six hours for 45 minutes of work.
Firms absorbed the technology cost as overhead, billed for actual time, and made up the difference through capacity. An associate who could handle one research memo per day could suddenly handle four. Revenue increased because throughput increased.
Document automation and e-discovery followed the same path. Each time legal technology made a task faster, billing adjusted to reflect actual effort. AI raises the same question with the same answer.
Capacity, not padding
Most billing ethics conversations miss the economics. They work in your favor.
A litigation associate billing 1,800 hours per year at $300/hour generates $540,000. If AI makes that associate 30% more efficient, they don’t generate less revenue. They generate the same revenue in fewer hours, or they handle more matters in the same hours.
Forget recouping AI costs on any single motion. Look at your associate’s total capacity. An associate who can competently handle 15 matters instead of 10 is worth more to the firm. Effective hourly rate goes up because output quality per hour goes up, even as billable time on individual tasks goes down.
Flat fees sidestep the problem
Flat fee arrangements avoid the hourly billing tension entirely. If your firm quotes a client $5,000 for a contract review, the client does not care whether it takes five hours or two. They care about the work product.
AI makes flat fee work more profitable without ethical friction. You quoted a fair price for a defined scope. How you deliver it is your business.
Florida Bar Ethics Opinion 24-1 frames flat fees as a more transparent alternative to hourly billing for AI-assisted work, noting that the benefits of efficiency can accrue to lawyer and client alike.
Disclosure
ABA Opinion 512 states that attorneys should disclose AI tool use to clients when AI will influence a significant decision in the representation. This is a fact-specific inquiry under the communication principles of Rule 1.4, not a blanket requirement.
In practice, your engagement letter should address AI use. A simple clause works: the firm uses AI tools to improve efficiency and quality, subject to attorney supervision and review. Clients will ask eventually. Better to have it in writing before they do.
What your firm should do
Bill honestly. Track actual time spent, including the time your attorneys spend reviewing and refining AI-generated work. Do not bill for time the AI saved.
Increase capacity. AI margin comes from throughput, not phantom hours. Your attorneys can take on more work at the same quality level.
Move toward flat fees. For predictable, scoped work, flat fee arrangements align incentives. The client pays for results. You profit from efficiency.
Update engagement letters. Add an AI disclosure clause before clients ask about it.
Document your process. When AI assists with a task, note it in your time entry. “Drafted motion to compel using AI-assisted research; reviewed and revised for case-specific facts (1.2 hrs).” Transparent entries protect you if the bill is challenged.
Where this lands
Firms that figure out AI billing will look like the firms that figured out Westlaw billing in 1990. They’ll bill honestly, absorb the tool costs, and generate more revenue through capacity and better work product.
Firms that try to bill three hours for 45 minutes of work will face a grievance, a fee dispute, or both. The ABA has spoken on this twice. The precedent from Westlaw, document automation, and e-discovery all point the same direction. Bill for actual work. Use the freed capacity to take on more of it.
KrisLegal helps firms operationalize AI within their existing workflows, with attorney-directed tools that run through your practice management system. Schedule a call to see how it works for your practice areas.