The American Bar Association (ABA) recently issued an ethics opinion addressing billing and fees in AI-supported legal work. As generative AI becomes more prevalent, lawyers face challenges in determining fair billing practices, especially since AI can accomplish tasks much faster than traditional methods.
The ABA advises that while lawyers may charge for the time spent using AI and reviewing its outputs, they should not bill clients for the time invested in learning how to use AI tools. Additionally, costs associated with AI should generally be treated as an overhead unless there is a prior agreement with clients.
As AI integration continues to grow, state bars and law societies in the U.S, Australia1 and elsewhere, are beginning to issue similar guidance. In addition to emphasising the importance of technological competence, client confidentiality, and transparent communication in the context of AI use, the guidance reinforces a potential need to review billing practices to ensure compliance with ethical standards.
AI’s efficiency sharpens the focus on the actual value delivered to clients rather than the time spent on tasks. The ABA opinion, which explores acceptable billing practices and pricing strategies in detail (pages 11-14), dovetails with the growing global shift towards alternative billing methods that align with client expectations and leverage technological advancements to enhance service delivery.
Closer to home, law societies across Australia are set to come together in September to further discuss the implications of generative AI developments in the legal industry and to align policy and practice guidance in this evolving space.
1Sample helpful resources:
QLS Guidance Statement No 37 – AI in Legal Practice
QLS Template Legal Practice AI Policy