The AI Paradox in Legal Billing
Despite all the talk about how AI is changing legal work, billing rates from outside firms are still going up. It’s not a contradiction - it’s the reality of how law firms are built and how work gets done today.
You’re Paying for Both the Tech and the Talent
Law firms are in an investment phase. They’re layering expensive AI tools on top of the same workforce they’ve always had - partners, associates, billable hours and all. Even as some tasks get automated, the cost of the tech and the people remains on the invoice.
And when it comes to strategic, high-stakes work, you’re still going to want that senior partner. AI can help with speed, but not with judgment. You’re still paying top dollar for the brains, even if the bots are picking up some of the brawn.
Where AI Could Help (Eventually)
There’s real potential for generative AI to reshape law firm economics—especially in areas like:
Drafting and research acceleration
Internal knowledge retrieval
First-pass contract review
Lower-level document work (billing entries, summaries, etc.)
But adoption is uneven. And even where it’s happening, the billing model hasn’t changed. The efficiency gains aren’t necessarily being passed along to clients. Not yet, anyway.
What In-House Teams Can Do Right Now
Until the economics shift, in-house teams should stay aggressive about managing spend:
Push for transparency. Ask firms how AI is being used - and how it affects your bill.
Track your own data. Benchmark rates, timekeeper mix, and trends across firms and matters.
Use tools to flag waste. Identify billing inefficiencies, mismatched staffing, or hours that don’t align with your priorities.
Get specific on value. Tie legal work to business outcomes. Don’t let “more hours” stand in for progress.
Consider fixed-fee arrangments. Especially for repeatable or well-scoped work.
Closing Thought
AI will reshape how legal services are delivered. But for now, it’s mostly an overlay on top of the same structure that’s always driven law firm pricing. If you’re not seeing cost relief yet, you’re not alone - and you’re not imagining it.
Stay curious. Ask questions. Use your data. The firms who are truly embracing change will be ready to talk about it.
