Your law firms are adopting AI quickly. That changes what you should expect from them and how you pay.
Update your outside counsel guidelines
Add an AI section that covers:
- Disclosure: which AI tools the firm uses on your matters, at least for categories of work.
- Confidentiality: your data only in tools with no-training and confidentiality terms; no consumer tools; sub-processors disclosed.
- Verification: every authority checked by a lawyer before filing; the firm is responsible for AI-assisted work as for any other.
- Court rules: compliance with AI certification or disclosure rules.
- Billing: no billing for time not spent; no charging for learning tools; AI costs only as agreed.
Billing and pricing
Hourly billing rewards time, and AI reduces time. ABA Formal Opinion 512 says lawyers may bill only for time actually spent and should not charge for learning a tool for general use; any AI-related costs should be agreed in advance. Practical options:
- Fixed or capped fees for work AI makes predictable (due diligence, document review, standard contracts).
- Portfolio or subscription arrangements for volume work.
- Value-based pricing for outcomes.
- Shared savings clauses in panel agreements.
Panel reviews
Ask firms at panel review: what AI they use, how they validate and verify it, how they protect your data, and how efficiency has shown up in your bills. Reward firms that share the gains.
Courts are watching fee claims too
Courts scrutinize AI-related fee claims. In 2024 a U.S. federal judge in New York rejected a law firm's use of ChatGPT to support its requested hourly rates as "utterly and unusually unpersuasive" and cut the fee award.