Can we still bill by the hour if AI makes the work faster?

Yes. Hourly billing is not prohibited because a tool made part of the work quicker. But the rule underneath has not changed: you charge for time you actually spent, and the overall bill still has to be fair and reasonable and in line with what the client was told to expect. If AI genuinely saves two hours, you cannot bill two hours. What you can do is decide, openly, whether the saving goes to the client, to the firm through a different pricing basis, or to a bit of both.

The starting point is what the client was told

Most disputes about costs are not really about the hourly rate. They are about the gap between what a client understood at the outset and what arrived at the end. The Solicitors Regulation Authority expects firms to be clear about costs, the Legal Ombudsman deals with a steady stream of complaints about costs information, and neither of those expectations bends because your drafting got faster.

So the practical question is not "can we still bill hourly" but "does our client care letter still describe what we are actually doing". If you told a client that a piece of work would take eight to twelve hours and it now takes six, the honest outcome is a smaller bill and, ideally, a short note saying why. Clients remember that.

Where the real risk sits

The risk is not the tool. It is time recording drifting away from reality.

• Recording the estimate rather than the time. If a task has always been booked at ninety minutes, it is easy to keep booking ninety minutes after it starts taking forty. That is not a technology problem, but AI makes the gap wider and faster.
• Grade of fee earner. Work that a paralegal can now do with supervision should not be billed at a partner rate because a partner happened to press the buttons. The old delegation logic still applies.
• Billing the tool as if it were a person. Charging for "AI time" as though it were fee earner time is not defensible. If you want the value of the tool to be reflected in the price, do it through the pricing model, not through inflated time entries.
• Under-recording the real work. The reverse happens too. Reading an AI draft properly, checking the sources it cites, correcting it and taking responsibility for it is legal work. It takes time and it is chargeable. Do not let people treat checking as a free extra.

That last point matters more than firms expect. The centre of gravity moves from producing text to interrogating it. That is skilled work by a qualified person and it belongs on the ledger.

Three ways firms are handling it

1. Hourly, with honest recording and revised estimates. The simplest option. Keep the rates, record what actually happened, and update estimates as soon as it becomes clear a matter will cost less than you said. The bill goes down. You keep the client. This works well where the scope is unpredictable and neither side can sensibly fix a price.

2. Fixed fees for defined pieces of work. Where a task is repeatable, a fixed price lets the firm keep the benefit of working efficiently and gives the client certainty. This is the model most likely to reward investment in better process, and it is the one that exposes bad scoping fastest. Be specific about what is included and what triggers an extra charge.

3. A blend. Fixed fees for the predictable stages, hourly for the parts that turn on the other side's behaviour. Many firms already do this in litigation and property. AI does not require a new invention here, just a fresh look at which stages have become predictable enough to price.

Whichever you choose, decide it deliberately at firm level rather than leaving each fee earner to improvise.

What to say to the client, and when

You do not need a lecture on technology in the client care letter. You need accurate costs information.

• If the basis of charging changes, say so before the work starts, not on the invoice.
• If your estimate falls, tell the client at the point you realise, not at the end.
• If a client asks how the work is done, answer plainly: the firm uses software to assist with research and drafting, a qualified person reviews and takes responsibility, and confidentiality arrangements are in place.
• Keep the file note. If a bill is ever challenged, the contemporaneous record of what was estimated, what changed and when the client was told is what you will rely on.

A short internal check

Ask three questions at your next fee earner meeting. Are our time entries describing work that actually happened? Are our standard estimates still true, or are they historical? Which of our recurring tasks are now predictable enough to price as a fixed fee? If nobody knows the answers, that is the real finding.

Where Alesis fits

Alesis is an AI assistant for UK law firms, made by L25 Limited, used through the web browser, with one conversation for a matter. It prepares drafts for a qualified person to review and sign off, and it does not file, serve or email anything, so the fee earner's review remains the work that carries the responsibility. It is funded by credit, not a subscription: the first firm a person sets up starts with £25 of free credit, no card needed, each colleague who joins with a verified account adds £15, for up to 20 colleagues, and the firm tops up only when it chooses. It assists qualified professionals and does not replace them, and it does not provide legal advice.