ABA Formal Opinion 512 addresses fees directly: a lawyer billing hourly may charge only for time actually expended. Efficiency gains from AI belong to the client, and billing the pre-AI equivalent hours is impermissible.
The cost of the tool itself may sometimes be passed through as an expense if reasonable and disclosed, but not as a disguised time charge.
Alternative Names:
AI Billing Ethics, Billing AI Time
Why it Matters?
This creates a genuine economic tension for hourly practices, since the tools that improve service reduce billable output. It is a significant driver of interest in alternative fee arrangements and flat-fee task pricing, where efficiency accrues to the firm rather than reducing revenue. Insurance defense practices operating under billing guidelines face the issue most directly.
Frequently Confused with
Related terms
Frequently asked questions
Can a firm bill the hours a task would have taken without AI?
Can the cost of AI tools be passed to clients?
