For generations, the billable hour has been one of the legal profession’s basic organizing principles: a way to measure labour, price services and signal professional value.
But as artificial intelligence collapses the amount of time it takes to complete many legal tasks, some lawyers say that model is coming under pressure.
“[AI is] highly disruptive to a billing hour model,” said Danny Kastner, a co-founder and partner at Kastner Ko LLP in Toronto.
“ And it’s specifically that disruption that any lawyer in a law firm that is using or contemplating use of AI tools is having to confront.”
Kastner says he is already seeing AI used widely in the legal industry, although uptake is “unevenly distributed.”
“[T]he substantial proportion of lawyers and law firms I deal with have embraced AI tools [and] are already reckoning with the advantages and challenges that those tools bring.
“And this absolutely has introduced that pressure among the lawyers and law firms who use it,” he said.
He points to three main ways AI is being used: legal research, drafting and document review.
“Legal research, before AI, meant a human lawyer or law student combing through potentially hundreds of thousands of cases on their own,” he said. “This can be a really arduous task, taking many hours.
“Now, with AI-driven legal research tools, that same task can often be accomplished in minutes and with a higher degree of success.”
A 2025 report from professional services provider Thomson Reuters states that legal professionals “expect to free up nearly 240 hours per year” as a result of AI adoption. Thomson Reuters now offers its clients use of an AI research assistant called CoCounsel.
Matthew Peters, a partner at leading Canadian law firm McCarthy Tétrault, says their firm is a “big fan” of CoCounsel.
“Instead of taking 10 hours to dig around … you maybe do it in two or three hours,” he said.
Peters cited the legal AI platform Walter as another tool his firm is using. Harvey, Kira, Lexis+ and vLex are other popular AI tools for the legal industry.
Challenging norms
Hilary Angrove, a Toronto family and employment lawyer, says AI has the potential to make legal services more affordable for clients.
Clients have long been wary of legal services because the fees are both expensive and unpredictable, she says. In a market like Toronto, lawyers’ hourly rates start in the low hundreds and can exceed $1,000 an hour in large firms.
“How are people supposed to plan their lives?” said Angrove, noting that even relatively straightforward legal services can quickly become major expenses.
At firms where she previously practiced, “efficiency was penalized,” said Angrove. Lawyers who take longer to complete tasks earn more for their firms than those who are more efficient.
This dynamic led Angrove to eventually create her own firm, Angrove Law, which charges flat fees.
This model not only rewards lawyers for being efficient, but also strips away price uncertainty for clients. Angrove, who practices what she calls “preventative law,” says this can make clients more likely to engage lawyers proactively for services to avoid more costly litigation down the road.
In family law, for example, she charges a flat fee of about $2,000 to prepare a standard pre-nuptial agreement.
Peters, at McCarthy Tétrault, agrees that the adoption of AI tools has meant “the connection between value and hours [worked] is starting to erode.”
McCarthy Tétrault has prioritized expanding its use of alternative fee arrangements, including fixed-fee contracts. Like Angrove, he sees this as creating greater alignment between the firm and clients’ interests.
“From our perspective, we think this is a really interesting and important alignment with clients, [and something] that clients have been asking for for a long time.”
He noted that AI tools have also bolstered the firm’s ability to estimate client fees.
“We can actually now say, ‘Okay, we historically spent X amount of time on this … We believe the tools now can carve out 20 per cent on this and 30 per cent on that.
“So … we’re getting to the point where we can more accurately estimate both the investment of time and the value that the tools will bring.”
Rita Gunther McGrath, an academic director in executive education at Columbia Business School in New York, suggests law firms could also explore charging clients for successfully completing a transaction, or on a subscription basis.
“[A subscription] approach works particularly well when AI enables firms to serve clients more continuously and proactively,” McGrath wrote in a Wall Street Journal opinion editorial on AI’s impact on the billable hour model.
Maintaining relevance
Angrove says lawyers should not fear “the end of the billable hour.”
”Even when AI is involved, the law is so grey and contextual, [people] still need that human person to affirm what they’ve done,” she said.
“We’re not going to be irrelevant.”
To the contrary, she thinks lawyers will continue to play an essential role. She notes that clients increasingly come to her with AI-generated agreements in hand. Often, “they’re terrible,” she says bluntly.
Non-lawyers do not know what questions to ask the AI platform, the relevant jurisdiction or what legal context they are missing.
“They need legal knowledge for that prompt,” said Angrove.
Peters notes that AI leaves individuals more knowledgeable about their rights. But they may also leave individuals feeling more convinced of their entitlements, as AI chatbots are known to reinforce what people think. This could change litigation dynamics, he suggests.
Kastner suggests AI could make litigators more productive, but could also lead to heightened pressure on them to do more.
“ We are already starting to see … that the integration of AI tools is evolving from a pure time saver to something that is starting to create inflated expectations for the amount of output a lawyer or a law firm can generate,” said Kastner.
In an adversarial and competitive field like litigation, this could lead to lawyers filing even more motions, for example.
“We may be in a situation as lawyers where we’re working just as hard, just as much, but our output and productivity has gone up dramatically as a result of AI tools,” he said.
For clients, that means a future where the strength of a case depends not only on their lawyer’s skill, but also the power of the lawyer’s AI arsenal.
“There’s an arms race on every litigation file, beneath the surface,” said Kastner.
