Kill Bill(able) Hours

I have always said that legal billing is a dumb business model. You pay me for the time I spend typing, not for the 30 minutes of insight that actually solves your problem. That model is about to break.

No one wants to bury the billable hour with a shovel more than I do. During my brief time as a solo trademark lawyer, I billed exclusively on a flat-rate system. It was beautiful. I didn't have to track my time, my billing was simple, and my clients knew exactly what to expect. Then the real world caught up with me.

When Candice and I founded this firm, the overlap in our practices forced us back to the hourly model. We tried to maintain flat-rate menus. We usually wound up on the losing end. As we like to say, we can only be your flat-rate lawyers if you agree to be our flat-rate clients. That bargain often felt unequal. We were the ones left holding the bag.

The "Scrivener" Problem

Under the current model, I do not get paid for my insight. I get paid for the hours I spend turning that insight into a document11. We are paid for "scrivening" rather than solving.

As Rita Gunther McGrath recently noted in the Wall Street Journal, this logic is becoming untenable. When revenue is tied to time spent rather than value delivered, efficiency actually penalizes the firm.

The AI Paradox

Now we have a brave new world. AI is taking a big chunk of the grunt work out of practicing law15.

Machines can cut the time-consuming part of the job by at least 25% and currently saves 240 hours per year. If I draft a contract in minutes but bill by the hour, my revenue collapses even though I delivered the same or better result in less time. This creates the "economic absurdity" McGrath warns about.

Will this be the death of the billable hour? I sure hope so. But we have a few real problems to solve first.

• Client Expectations: Flat rates require efficiency from both sides. If a client wants a fixed price, they cannot have long, rambling conversations that expand the scope or constant changes and edits from the initial plan. We might need a "construction" model with a precise statement of work and change orders for every deviation.

• The Risk Factor: As Michael Grupp noted in Bloomberg, the billable hour is resilient because it flexibly manages the risk of the unknown. Clients often prefer paying for precision over a fixed fee that might incentivize cutting corners.

• The Ethics Trap: Flat-rate billing is generally permitted. However, true "value billing" is a minefield. Some jurisdictions strictly interpret 'reasonableness' based on time spent, creating tension with emerging guidance, such as Formal Opinion 512, which encourages efficiency. If AI reduces a ten-hour job to ten minutes, justifying a five-figure flat fee under current 'reasonableness' standards becomes risky. Until the regulations catch up to the tech, we are stuck in a gray area.

Let’s Figure This Out

I do not have all the answers yet. I believe clients will eventually demand this shift so strongly that it will become reality, just like the shift from WordPerfect to Word. For now, Blackgarden Law will continue billing as we have. But we are watching this evolution closely.

If you are interested in where this is going, let’s connect on LinkedIn. I would love to hear how your business is handling the shift from paying for time to paying for results.

Let’s figure this out together.

By the way, I used some AI to help me polish this article, but I did so based on my reading of the background materials and my personal experiences.