Episode 208: Legal GenAI Conversations Series – Will GenAI kill the billable hour…ever?

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Apr 17, 2025

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In this conversation, Tessa van Duyn, CEO of Moores; Gene Turner, Managing Director of LawHawk; and Melissa Lyon, Executive Director at Hive Legal, tackle the seismic shifts in legal billing due to generative AI. They discuss whether AI will supersede the billable hour model and explore alternatives like value-based pricing. Insights into the challenges and opportunities of integrating new pricing structures are shared, emphasizing a need for law firms to adapt to client demands for efficiency and transparency.

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ADVICE

Augment Pricing With Human Oversight

Use technology to support pricing decisions, including AI to automate scope and pricing recommendations.
Maintain human oversight to preserve trust, relationships, and ensure value-based pricing is client-centered.

ADVICE

Choose Subscriptions or Fixed Fees

Subscriptions provide recurring revenue and align incentives for long-term client value.
When subscriptions don’t fit, fixed fees with clear scopes offer budget certainty and better client relationships.

ADVICE

Navigate Compliance in Alternative Pricing

Alternative pricing models must comply with regulations, but courts show some flexibility toward fixed fees.
Success requires careful disclosure, transparent assumptions, and adherence to cost rules in disputes.

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There's little more fundamental to every business than revenue. In law firms, for a while now, that's been measured by the billable hour.

In most law firms today, we still wrap up hours billed in the same parcel as expertise, performance, and value.

That's a BIG problem and it's getting bigger as AI and particularly generative AI is completing tasks faster, better, and cheaper AND starting to advance into complex problem solving too!

So, what does that mean for law firms? Can we/should we all immediately convert to fixed fees, subscriptions and/or value-based pricing or something entirely new? What happens if we do? What happens if we don't? Where do we go to figure it out?

We chatted about all of that and more on 16 April 2025 in the third podcast in CLI's Legal GenAI Conversations Series on Will GenAI kill the billable hour…ever? Terri Mottershead, Executive Director of the Centre for Legal Innovation was joined by three amazing guests with a wealth of experience to share from Australia and New Zealand:

Melissa Lyon, Executive Director & Experience Designer, Hive Legal and CLI Advisory Board member
Gene Turner, Managing Director, LawHawk and CLI Advisory Board member
Tessa van Duyn, CEO and Practice Leader, Moores and CLI Advisory Board member

Topics covered in this episode included:

Whether generative AI has put pressure on law firms to reconsider the billable hour, or if it is still mostly hype
What are the most viable alternative fee models are and how if generative AI making these more attractive or feasible
The key advantages and disadvantages of moving away from the billable hour toward alternative fee arrangements in a GenAI powered legal landscape
How law firms have managed the impact of alternative models on lawyer and allied legal professional remuneration, bonuses, performance reviews and career progression
The key focus for law firms to have in mind when deciding to move from the billable hour model

You'll find details about the other topics we'll be discussing in this series here.

If you would prefer to watch rather than listen to this episode, you'll find the video in our CLI-Collaborate (CLIC) free Resource Hub here.

Don't forget to join CLI's free Legal Generative AI Community here – it's a lightly curated daily news feed on all things legal GenAI.