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| Hilary Angrove |
Yes, the clients were frustrated by the bill, but the biggest complaint was the line items. Frustration over being charged for every email. Even a quick “sounds good, moving forward” reply from an associate was costly. At $300 to $800 an hour, a 0.1 billable increment adds up faster than most clients realize. I completely agree that as professionals we need to be paid adequately. But, at most firms, associate lawyers are under a lot of pressure to hit 1,800 billable hours a year. They are incentivized to find those hours somewhere.
I was once incentivized in the same way. It is a structural problem baked into the billable hour model itself. Where finding efficiency goes against how you are graded at bonus time. If you develop strategies to work efficiently, it could penalize you even though you’re bringing great value. Being forward-thinking and resourceful shouldn’t be a punishment.
Why the billable hour exists in the first place
The legal profession adopted hourly billing for understandable reasons. Legal work can be genuinely unpredictable. What sounds like a simple question can require hours of research, and litigation in particular is at the mercy of the court. Rightfully so, lawyers are afraid of doing significant work and not getting paid for it, so they started billing in six-minute increments.
There may also be a deeper reason the model persists: lawyers are trained on precedent. We learn the law by studying what came before us, and we tend to run law firms the same way. Most of us did not go to business school and many came straight from undergrad. We learned how to run a practice by watching senior lawyers. Change feels risky. And we are trained to mitigate risk! Further, stepping outside the norm means potential friction with the law society. A lawyer’s biggest fear. So the hourly model remains the default.
What AI is changing
For years, the complexity and long hours of legal work justified hourly billing. Ironically, that model may soon start working against lawyers. In the past, inefficiencies were easy to overlook because most clients had little understanding of law’s ability to use technology. AI has changed that. When people see how quickly technology can produce answers and draft documents, the assumption that legal work takes so long becomes harder to defend.
Consider legal research. What once required a junior lawyer to spend six to eight hours digging through case law can now be done in a fraction of the time with AI tools. The knowledge required to ask the right questions, to know what is legally relevant and what is not, still belongs to the lawyer. But the time it takes to find the answers has collapsed.
In this scenario, if you are billing by the hour, you are less profitable. If you are billing by deliverable, the efficiencies of AI provide your client with the same, arguably better, quality work and allow you to service more clients.
What a different model actually looks like
At Angrove Law, we quote a flat fee based on a defined scope of work. Sure, we also use hourly rates when we have to. If the client goes out of scope, there will be extra charges. What we have learned is that clients want to fit within the flat rate. They are incentivized to come to us organized, which is fantastic for us. And we are incentivized to be efficient with clear processes for them to follow. It makes for both happy clients and happy lawyers.
Before AI entered the picture, we were already using technology because flat-fee billing demands it. When you are not charging by the hour, clunky systems cost you money. A simple example is scheduling: instead of billing 0.1 for each back-and-forth email to find a meeting time, we use software that lets clients book directly into the lawyer’s calendar. Our philosophy: use technology, systems and clear processes to remove friction and empower clients to handle as many steps as possible themselves, so the lawyer’s time is reserved for actual legal work.
You’ve probably heard the old tale of the engineer who charged $10,000 for fixing a machine — $1 for turning a screw and $9,999 for knowing which screw to turn. In the long run, lawyers who start charging for knowing what screw to turn are going to come out ahead. We should bill for value not time.
The shift is already happening
The legal industry is not going to change overnight. Litigation in particular has real unpredictability that makes flat fees complicated. But for the large category of legal services that can be systematized, especially contractual work, the argument for hourly billing is weaker than it has ever been.
Consumers expect to know what something costs before they commit to it. Nearly every other service industry has figured out how to provide that clarity. The legal profession is simply the last one to catch up.
The billable hour is not dead yet. But it is on borrowed time.
Hilary Angrove is a lawyer and co-founder of Angrove Law, a virtual flat-fee law firm serving clients across Ontario at angrovelaw.ca.
The opinions expressed are those of the author(s) and do not necessarily reflect the views of the author’s firm, its clients, Law360 Canada, LexisNexis Canada or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.
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