Billing for AI Work: What Attorneys Can and Can't Charge
9/1/20264 min read
Billing for AI Work: What Attorneys Can and Can't Charge.
Generative AI can turn an afternoon of drafting into fifteen minutes of work. That's a gift to your clients — and a genuine ethics question for your invoices. If a tool did in minutes what used to take hours, what can you actually charge? The rules haven't changed, but AI has created new ways to run afoul of them.
This is general information, not legal advice.
The rule that governs: California Rule 1.5
Start with a California-specific distinction that matters. The ABA's Model Rule 1.5 prohibits an unreasonable fee, and most national commentary (including ABA Formal Opinion 512) is framed around "reasonableness." California's Rule 1.5, by contrast, prohibits a lawyer from charging or collecting an unconscionable or illegal fee, and supplies its own list of factors for judging unconscionability — including the amount of the fee relative to the value of the services, the time and labor required, and the sophistication of the lawyer and client.
The practical upshot: California attorneys should analyze AI billing under their own rule and factors, while drawing on Opinion 512's guidance for the how-to. The duty to communicate the basis of your fees to clients (Rule 1.4) runs alongside it.
Core principles for billing AI-assisted work
ABA Formal Opinion 512 (July 29, 2024) applied longstanding fee principles to generative AI. The through-lines are consistent, and they translate cleanly to California practice:
Bill for time actually spent — not time it used to take.
You can bill the time you genuinely spend using AI on a matter: the minutes inputting the relevant facts, plus the time reviewing and verifying the output for accuracy and completeness. Opinion 512's own example: if you spend 15 minutes prompting a tool to draft a pleading, you may bill that time plus the review time. What you can't do is bill the pre-AI estimate for a task the tool completed in a fraction of the time.
Don't charge clients to learn the tool.
Time spent getting up to speed on how a GAI tool works is generally your own overhead, not a client charge. Lawyers may not bill clients for time necessitated by their own inexperience.
Let efficiency benefit the client.
California's guidance expects AI efficiency gains to flow, at least partly, to clients through lower overall cost. Inflating bills back up to what the work "would have" taken manually invites unconscionability scrutiny — especially where AI cut task time dramatically.
Handle tool costs transparently.
A general subscription you use across all clients typically reads as overhead and shouldn't be passed through as a client expense. Costs tied to a specific client's matter may be chargeable if they're reasonable and you've explained the basis. Either way, explain fee and expense arrangements — preferably in writing, at or near the outset of the engagement.
The flat-fee and value-billing wrinkle
Here's where it gets genuinely debated. If you charge a flat fee for a task and AI now lets you complete it in a fraction of the time, is charging the same flat fee still defensible? Opinion 512 suggests it can be problematic to charge the identical flat fee when the tool substantially reduced your effort — a position some practitioners argue is too rigid, since flat and value-based fees are meant to price outcomes and value, not hours.
There's a serious counter-argument that value-based billing is exactly how lawyers can ethically capture the value AI brings to a client's result, rather than being trapped in an hours-only model. The honest state of play: this is an evolving area with real disagreement, and California's guidance leans toward encouraging value-based models while insisting the fee reflect genuine value and effort. If you use flat or value fees, be ready to articulate the value delivered — not just the time saved.
Practical do's and don'ts
Do bill genuine time spent operating and verifying AI output.
Do explain your AI-related fees and expenses in writing, early.
Do pass efficiency savings through to clients where your model allows.
Don't bill pre-AI time estimates for work AI accelerated.
Don't charge clients for learning to use a tool.
Don't pass through general AI-subscription overhead as a client expense without transparency and a reasonable basis.
Don't assume a flat fee insulates you — be prepared to justify it on value.
(See our related pieces on client communication and AI disclosure under Rule 1.4 and building a law-firm AI use policy.)
Frequently asked questions
Can I bill for time spent using AI on a client's matter?
Yes — the actual time you spend prompting the tool and reviewing and verifying its output. What you can't bill is the longer time the task would have taken without the tool.
Can I charge clients for my AI subscription?
A general, firm-wide subscription usually counts as overhead and shouldn't be billed as a client expense. Costs tied to a specific matter may be chargeable if reasonable and disclosed.
Does California use the same fee standard as the ABA?
Not quite. The ABA Model Rule prohibits an unreasonable fee; California's Rule 1.5 prohibits an unconscionable fee and lists its own factors. Analyze AI billing under California's rule.
Can I keep my flat fee if AI made the work faster?
Possibly, but be careful. Charging the same flat fee when a tool sharply reduced your effort can draw scrutiny; be ready to justify the fee based on the value delivered.
This article is general information, not legal advice. Confirm the current State Bar guidance and any applicable rule before relying on specifics.