BigLaw Boosts AI Use but Holds Firm on Billable Hour Fees
70% of US law firms use AI, but most resist shifting from billable hour pricing.
Why it matters: Law firms face mounting pressure to align AI-driven efficiency with client demands for value-based pricing. Legal ops and BigLaw leaders must navigate these tensions to sustain client relationships and profitability.
- 70% of US law firms adopted generative AI tools since 2022, including ChatGPT and Microsoft CoPilot (Brightflag, 2024).
- Law firm technology spending grew 9.7% in 2025, the fastest increase recorded (Legalweek, 2025).
- Am Law 100 lawyers charged $1,000+ per hour on average in 2025, with some rates hitting $2,000 (Am Law Daily, 2025).
- Kirkland & Ellis invested $500 million in AI technology, aiming to shift towards value-based pricing (Law.com, 2024).
Investment in AI and technology among US law firms continues to accelerate. According to Brightflag's 2024 report, 70% of US firms deployed generative AI tools such as ChatGPT, Microsoft CoPilot, Harvey, and Spellbook since 2022, aiming to increase efficiency and reduce routine workloads.
Concurrently, Legalweek's 2025 analysis documents a 9.7% rise in law firm technology spending — the fastest growth ever recorded in the sector. This surge underscores firms' commitment to technological innovation despite persistent challenges in pricing models.
Yet, despite these efficiency gains, most firms maintain the traditional billable hour pricing model, which dates back to the 1950s. Am Law Daily reports that the average hourly rate for Am Law 100 lawyers surpassed $1,000 in 2025, with peak rates reaching $2,000. This discrepancy fuels client concerns that AI-driven efficiencies aren’t translating into lower fees.
"The billable hour rewards slow lawyers and punishes efficient ones," says Teryn AI, a legal AI solutions provider. Clients increasingly question the value of paying for time when AI tools can expedite legal work.
Responding to these pressures, Kirkland & Ellis announced a $500 million investment in proprietary AI technology to enable a move away from billable hours toward value-based pricing, according to Law.com. Chair Jon Ballis emphasized the intent to transform lawyers into "high-value intelligence lawyers" who deliver judgment rather than simply sell time.
Other firms, such as Showalter PLLC, have implemented flat-fee models aided by AI tools to perform tasks traditionally done by junior lawyers, providing clients with predictable, transparent pricing.
However, widespread adoption of alternative pricing models remains limited. This gap creates a challenge for legal operations and BigLaw leaders navigating from entrenched fee structures toward client expectations shaped by AI-driven value delivery.
By the numbers:
- 70% — US law firms adopting generative AI since 2022 (Brightflag, 2024)
- 9.7% — tech spending increase by law firms in 2025, fastest ever (Legalweek, 2025)
- $1,000+ per hour — average Am Law 100 lawyer rate in 2025 (Am Law Daily, 2025)
- $500 million — Kirkland & Ellis AI investment aimed at value-based pricing (Law.com, 2024)
Yes, but: While some firms like Kirkland & Ellis lead in AI investment and pricing innovation, most law firms still rely heavily on billable hours, delaying widespread change.
What's next: Expect increased pressure on law firms over 2025-26 to justify fees given AI efficiency; further pilot projects on value-based pricing likely.