Can we charge a client for the cost of using AI on their matter?

For most firms the cost of an AI tool sits where the cost of a research subscription, a case management system or a photocopier sits: it is an overhead met out of the fees you charge, not something passed to the client as a separate item. What you bill is the work done and the value delivered, not the licence or the credit behind it. If you do want to charge it separately, the retainer has to say so clearly, in terms the client agreed before the cost was incurred.

Overhead or disbursement

A disbursement is normally a payment you make to a third party on the client's behalf, specific to that matter: a court fee, counsel's fee, a search fee, an expert's invoice. Office costs that you incur to run a practice at all are different in kind, even where you can identify which matter they touched.

An AI tool usually looks much more like the second category. It is bought to run the firm, used across many matters, and the cost of any single use is small and often hard to attribute precisely. Billing it as a disbursement invites the obvious question: where does that stop? Few firms itemise the cost of a legal research subscription for the hour a fee earner spent in it.

There is a narrower case where attribution is genuinely clean. If a tool charges by consumption and you can show exactly what a given matter consumed, the figure is at least real. Even then, whether you can charge it on depends on your retainer and on the client's expectations, not on the existence of the number.

Start with your client care letter

Whatever you decide, the retainer governs it. If your client care letter says fees are charged at hourly rates plus VAT and disbursements, and then lists typical disbursements as court fees, search fees and counsel's fees, you have not reserved the right to add a technology charge.

If you intend to charge for AI use, deal with it the way you would deal with any other charge:

• Name it plainly, in the same place you set out rates and expenses.
• Say how it is calculated: per matter, per use, as a percentage, or at cost.
• Give an estimate or a cap, as you would for anything else that varies.
• Explain what the client gets, in a sentence a lay client can understand.

A charge that appears for the first time on a bill is a complaint waiting to happen, and complaints about unexpected charges are exactly the kind that reach the Legal Ombudsman. The cost of the argument will dwarf the sum in dispute.

Between the parties, expect scrutiny

If costs are to be recovered from another party, or assessed, assume any technology line will be looked at closely. A paying party will ask whether the item is properly a disbursement, whether it was reasonably incurred, and whether it duplicates work already claimed as fee earner time.

There is a second trap. If AI shortened the work, claiming both the full time you would once have spent and a separate charge for the tool that saved it is hard to defend. Pick one. The straightforward position for most firms is that time claimed reflects time actually spent, the tool is overhead, and the saving is simply a lower bill or more work done in the same hours.

The same logic applies to fixed fee and conditional arrangements. If the fee is fixed, efficiency improves your margin and nobody needs a separate line for it. That is usually the cleaner commercial answer.

A different way to think about the money

The question firms really want answered is not whether the cost can be passed on. It is whether the spend is justified. That is a management question, and it is easier to answer than the billing one.

Think about it in three parts:

1. What does it actually cost? A tool funded by credit has a visible number you can watch month by month. A per seat subscription has a fixed number whether anyone uses it or not. Know which you have.
2. What does it replace or prevent? Hours spent finding a figure buried in a bundle, a missed date, a draft that had to be done twice. You will not get a precise figure, but you will get a direction of travel.
3. What does it free up? If a fee earner gets three hours back, the value depends entirely on what fills them. Chargeable work, business development and genuine supervision all count. Nothing filling them counts for nothing.

If the spend is justified on those terms, you do not need to recover it line by line. If it is not justified, charging it to clients will not rescue it.

What to decide before the next bill

Agree a firm-wide position and write it down. Most firms will land on: the tool is an overhead, it is not billed separately, time recorded is time spent, and nobody adds a technology line to a bill. That position is easy to explain to a client, a costs judge and a compliance officer.

If your firm takes a different view on a particular type of work, make sure the retainer for that work says so, that the basis of calculation is in writing, and that the fee earner issuing the bill understands it. Consistency matters more than the answer you pick.

Where Alesis fits

Alesis is funded by credit rather than a subscription, so the firm tops up only when it chooses, nothing recurs, and there are no feature tiers. The first firm a person sets up starts with £25 of free credit with no card needed, and each colleague who joins with a verified account adds £15, for up to 20 colleagues. Alesis prepares work for a qualified person to review and sign off; it assists qualified professionals rather than replacing them, and it does not provide legal advice.