Big Law’s Embrace of AI May Accelerate the End of Billable Hours

Big Law's adoption of AI tools is accelerating a shift from billable hours to flat fees, but experts warn of persistent risks from hallucinations and misuse.

Key points:

  • Law firms are increasingly embracing AI tools to automate legal tasks.
  • Experts say this could hasten the shift from hourly billing to flat fees.
  • Risks like hallucinations and improper AI use still present ethical challenges.

The growing use of artificial intelligence by Big Law firms may be a tipping point in the profession’s long-running debate over the billable hour. As firms integrate AI tools to streamline operations, experts at the ABA’s National Conference on Professional Responsibility said the economics of legal work are being reshaped—potentially in favor of flat fees and alternative billing models.

“Clients have been hoping for the death of the billable hour for decades,” said Jason D. Kreiser, a partner at McDermott Will & Emery, during a panel at the ABA’s 50th annual ethics gathering in Arlington, Virginia. “I don’t think this is the moment that it dies. But AI will push firms toward new types of payment arrangements.”

As firms adopt generative AI tools for tasks such as document review, legal research, and entity formation, the speed and predictability of those workflows are making fixed-fee structures more attractive. Hilary Gerzhoy, a partner with HWG LLC, noted that clients are increasingly receptive to fixed pricing models when legal tasks are AI-enabled and outcomes can be more easily forecasted.

However, panelists also cautioned that AI use is far from foolproof. “AI wants to make you happy,” said Michael Shea, chief information officer at McDermott. “That’s what makes hallucinations so dangerous.” These are instances where AI fabricates cases or facts—an issue that continues to result in disciplinary proceedings for attorneys who fail to verify outputs.

Josh Noffke, a legal AI strategist with Brass Tacks Consulting, emphasized that law firms are rapidly experimenting with “agentic AI”—software agents that can complete multi-step legal tasks without human intervention. “Agents are the next up and coming thing,” he said. In-house legal teams may soon rely on agents to populate contracts, conduct diligence, and synthesize legal guidance.

Despite the enthusiasm, regulatory clarity remains elusive. Kreiser said the U.S. continues to lag behind the European Union and other jurisdictions in setting clear rules for AI use. The Trump administration recently revoked President Biden’s AI Bill of Rights framework, removing what some advocates saw as a baseline for civil rights protections in the AI era.

“It’s an arms race,” Kreiser said. “The technology is moving fast. Regulation is not.”

Read the full article on Bloomberg Law

Customer Stories

See how leading enterprise in-house teams have scaled smarter with Legal.io's high-caliber flex talent.

More from Legal.io


Associate Hiring Trends Diverge Between Large and Midsize Law Firms
Associate Hiring Trends Diverge Between Large and Midsize Law Firms

The legal industry's approach to associate hiring is seeing a pronounced divergence between large and midsize firms.

Jan 17, 2024
Read More
Big Law Mergers Lag Behind Industry Rivals, Analysis Shows

A Bloomberg Law analysis of the largest 18 law firm mergers over the past 15 years reveals that two-thirds of these firms increased profits per partner and revenue per lawyer at a slower pace than competitors.

Jan 31, 2025
Read More
Community Perspectives: What does a legal metrics dashboard look like on your team?
Community Perspectives: What does a legal metrics dashboard look like on your team?

Legal Operations professionals talk through what legal metrics dashboards work for their teams.

Oct 03, 2023
Read More
Anna Richards Takes on Director of Global Legal Operations at John Deere
Anna Richards Takes on Director of Global Legal Operations at John Deere

Richards has been appointed to a role critical for overseeing the company's legal functions worldwide, though specific details of her background and responsibilities in this position remain undisclosed.

Jan 23, 2024
Read More
Basics of public domain and fair use

Learn the basics of public domain, permission, and fair use

Sep 22, 2017
Read More
Ready to hire?

Schedule a free consultation to discuss your hiring needs.

Free 15-min consultation
Legal.io Platform
5 star reviews
Hiring made smarter

Easy-to-use platform for hiring legal talent, managing spend, and optimizing your panel — plus an average savings of 50%.

Need Immediate Help?

Submit a hiring request and let our experts handle the entire process for you.