Evolving Legal Pricing Models

There’s little more fundamental to every business than revenue. In law firms, for a while now, that’s been measured by the billable hour.

In most law firms today, we still wrap up hours billed in the same parcel as expertise, performance, and value.

That’s a BIG problem and it’s getting bigger as AI and particularly generative AI is completing tasks faster, better, and cheaper AND starting to advance into complex problem solving too!

So, what does that mean for law firms? Can we/should we all immediately convert to fixed fees, subscriptions and/or value-based pricing or something entirely new? What happens if we do? What happens if we don’t? Where do we go to figure it out?

We chatted about all of that and more on 16 April 2025 in the third podcast in CLI’s Legal GenAI Conversations Series on Will GenAI kill the billable hour…ever? Terri Mottershead, Executive Director of the Centre for Legal Innovation was joined by three amazing guests with a wealth of experience to share from Australia and New Zealand:

• Melissa Lyon, Executive Director & Experience Designer, Hive Legal and CLI Advisory Board member
• Gene Turner, Managing Director, LawHawk and CLI Advisory Board member
• Tessa van Duyn, CEO and Practice Leader, Moores and CLI Advisory Board member

Topics covered in this episode included:

• Whether generative AI has put pressure on law firms to reconsider the billable hour, or if it is still mostly hype
• What are the most viable alternative fee models are and how if generative AI making these more attractive or feasible
• The key advantages and disadvantages of moving away from the billable hour toward alternative fee arrangements in a GenAI powered legal landscape
• How law firms have managed the impact of alternative models on lawyer and allied legal professional remuneration, bonuses, performance reviews and career progression
• The key focus for law firms to have in mind when deciding to move from the billable hour model

You’ll find details about the other topics we’ll be discussing in this series here.

If you would prefer to watch rather than listen to this episode, you’ll find the video in our CLI-Collaborate (CLIC) free Resource Hub here.

Don’t forget to join CLI’s free Legal Generative AI Community here – it’s a lightly curated daily news feed on all things legal GenAI.