There’s
long
been
speculation
that
the
billable
hour’s
demise
is
just
around
the
corner.
But
with
generative
AI
and
rapid
technological
advances
gaining
traction
in
the
legal
industry,
is
the
billable
hour
*really*
doomed
this
time?
In
a
recent
webinar
sponsored
by
8am™,
the
panelists
—
professionals
in
subscription
legal
services
—
agreed
that
it
is.
“For
me,
it’s
been
dying
since
the
moment
I
discovered
it,
which
was
around
eight
years
ago,
when
I
had
to
start
tracking
my
time
for
the
first
time,”
says
Matthew
Kerbis
of
Subscription
Attorney
LLC.
Here,
we
share
five
reasons
why
the
billable
hour
will
go
away,
according
to
the
panelists.
(You
can
register
for
the
full
webinar
on-demand
at
this
link.)
It’s
Not
Profitable
Kerbis
and
his
co-panelist,
Kimberly
Bennett
of
Fidu,
agree
that
the
billable
hour
isn’t
the
most
profitable
model.
This
is
particularly
true
for
solos
and
lawyers
at
small
firms.
“What
you’re
doing
is
you’re
capping
how
much
revenue
you
could
earn
in
a
day,”
Kerbis
says.
“And
of
that,
how
much
will
clients
actually
pay?”
The
panelists
point
to
years
of
legal
trends
reports
issued
by
practice
management
companies.
These
reports
repeatedly
reveal
that
lawyers
at
small
firms
only
collect
on
a
few
billable
hours
a
day.
“To
generate
more
revenue,
you
have
to
hire
more
billers,”
Kerbis
says,
“and
lawyers
are
expensive.”
It
Causes
Friction
With
Clients
As
Bennett
sees
it,
the
trends
reports
also
reveal
that
human
error
is
a
part
of
the
billing
process.
As
a
result,
she
says,
clients
will
often
push
back
on
hours
billed,
and
lawyers
will
often
offer
discounts.
It’s
a
process
that
creates
friction
in
the
relationship.
“Ultimately,
the
billable
hour
is
something
that
holds
you
back
from
creativity,
curiosity,
and
just
showing
up
differently
for
your
clients,”
she
says.
Lawyers
Don’t
Even
Like
It
If
lawyers
liked
billing
by
the
hour,
they
would
be
better
at
it,
according
to
Kerbis.
The
legal
industry
trends
reports
that
show
only
a
few
billable
hours
a
day
bear
out
this
reality.
He
also
cites
a
“cognitive
disconnect”
in
the
industry:
Lawyers
prize
efficiency
and
want
better
work-life
balance,
yet
the
longer
things
take,
the
more
they
get
paid.
“I
think
that
cognitive
disconnect
actually
plays
a
role
in
why
lawyers
have
never
really
enjoyed
billing
by
the
hour,”
he
says.
It
Hasn’t
Always
Been
This
Way
One
reason
behind
the
billable
hour’s
endurance
is
what
Forbes
has
called
“the
most
dangerous
phrase
in
business”:
“We’ve
always
done
it
this
way.”
But
Bennett
notes
that
the
billable
hour
is
a
relatively
new
phenomenon
in
the
life
of
the
legal
industry,
becoming
the
prominent
model
in
the
’60s
and
’70s.
“It’s
dying,”
she
says.
“AI
is
here
to
fast
track
you
toward
it
for
so
many
reasons,
but
it’s
already
been
on
that
path.”
Generative
AI
Is
Growing
Speaking
of
AI
—
Kerbis
also
sees
its
emergence
as
a
potentially
fatal
blow
to
the
billable
hour
model.
“When
AI
hit
the
scene,
it
really
became
the
No.
1
best
reason
why
you
can’t
be
billing
time
anymore,”
Kerbis
says,
“because
it’s
simply
not
profitable
anymore
with
the
efficiencies
that
AI
brings.”
Enter
Legal
Billing
Software
As
digital
services
and
diverse
payment
methods
become
more
common,
lawyers
are
adapting
their
billing
practices
to
better
serve
clients.
Offering
customized
alternative
fee
arrangements
can
help
improve
client
satisfaction
while
also
improving
your
law
firm’s
profitability.
Leveraging
the
right
software
can
help
your
law
firm
more
easily
manage
these
tailored
fee
agreements
without
spending
more
time
on
non-billable
work.
8am
LawPay
legal
billing
software
is
purpose-built
to
offer
greater
flexibility
in
how
lawyers
structure
their
fee
arrangements,
freeing
you
up
to
think
about
how
best
to
run
your
legal
practice.
Schedule
a
live
LawPay
demo
today
to
learn
more.