Definition
The billable hour model charges clients per lawyer time increment (typically 6- or 15-minute blocks) — the dominant Big Law revenue structure for decades.
Key Points
- 2026-09: Wall Street banks demand 20-30% fee cuts citing legal-ai efficiency (2026-09-28-ai-law-firms-billable-hour-discount)
- IBM’s Chris McCloy: hourly rates “punish firms from using AI well”; AFAs reward efficiency
- Citi survey: 35% of large firms expect model changes within a year
- BigHand 2026: 63% still default to standard rates or copy past pricing; no dominant AI pricing strategy