# AI-Drafted Work Doesn't Belong on the Billable Hour > The ethics rules already keep AI's drafting time off an hourly bill, and clients now answer your drafts with AI of their own. By Vlad Shvets, Partner @ Qvery · Published 2026-11-02 · 11 min read Canonical: https://qvery.ai/blog/ai-and-the-billable-hour/ Most of what a law firm bills is hours, and much of a junior lawyer's week goes into first drafts: the NDA, the standard supply agreement, the discovery responses, the memo on a question the firm has answered before. AI now writes the first version of each in minutes. Your clients have the same tools on their desks, and they've started reading your drafts with them. We build agents that do that drafting inside a firm, and we sell our own work as a fixed price for a defined result, agreed upfront. Take AI-drafted work **off the billable hour**. Sell the reviewed draft at a fixed fee, write the client's rounds of comments into the engagement letter, and move one matter type at a time, starting with the ones that repeat. On an hourly bill the drafting has already disappeared. What's left is mostly review time, and **your client's AI** keeps reopening it, which can end as a bill the client disputes or a write-off you absorb. Strategy, novel deals and any matter whose size nobody can see at the start keep the hour. Where the client sets the billing terms, the case belongs in the next negotiation rather than the next letter. And a fixed fee still has to be a reasonable fee under Rule 1.5, in whatever form your state adopted it. ## Under the ABA's Rules, an Hourly Bill Keeps Only the Review The ABA's ethics committee spelled out the hourly side in Formal Opinion 512, in July 2024: a lawyer who bills by the hour bills the time spent. Its own example is a pleading. A lawyer who spends 15 minutes putting the facts into an AI tool may bill **those 15 minutes** and the time spent **reviewing the draft**, and no more hours than were worked, however long the pleading used to take. So billing fewer hours isn't a pricing decision anyone at the firm makes. It happens the day its lawyers open the tool, and from then on the bill carries the minutes spent briefing it and **the review**. Clients have noticed. In the Thomson Reuters Institute's 2026 survey, **71% of in-house legal professionals** expected their outside firms to change how they charge as AI use grows. Among the law firms surveyed, **28%** said they'd changed their pricing in response to AI at all. Some of the largest buyers of legal work are asking out loud. In September the FT reported that Morgan Stanley and Citigroup had told major firms they want new payment arrangements that save them money, and that Goldman Sachs had asked law firms **how much AI was saving them**. > An hourly bill used to show a client how much work went into a draft. Once AI writes the first version, the same bill shows how little did, and every review entry becomes something to defend to a client who knows the drafting took minutes. I'd rather sell them the reviewed draft at a price we both agreed before anyone opened the file. > > Vlad Shvets, Partner @ Qvery ## Your Client's AI Now Writes the Second Round The review that stays on the bill doesn't stay the same size. Clients have started pasting a firm's draft into their own AI and sending back what it says: pages of questions, suggested edits, points it thinks the lawyer missed. The tools are already on their desks: in Everlaw's survey of 300 U.S. in-house legal professionals this summer, **86% used generative AI** for legal work. Some of what comes back is a real catch. All of it needs a lawyer's answer, and someone has to pay for that time. **Tips** > Currently, the clients that are using AI are spending more because they're sending us incredibly long emails with a list of a million questions that aren't relevant and can't be answered with a yes or no. > ([r/legaltech · Oct 2026](https://www.reddit.com/r/legaltech/comments/1x1pk2x/retainer_language_explicitly_banning_clients_from/pevmmwu/)) > I find the clients generating the junk tend to be the ones that are most keen to argue bills > ([r/legaltech · Oct 2026](https://www.reddit.com/r/legaltech/comments/1x1pk2x/retainer_language_explicitly_banning_clients_from/pevyfb7/)) > Clients who take 30 seconds to have AI generate a 5 page letter are unlikely to want to pay for the 2 hours it takes the attorney to respond to why the slop is wrong. > ([r/legaltech · Oct 2026](https://www.reddit.com/r/legaltech/comments/1x1pk2x/retainer_language_explicitly_banning_clients_from/pewki27/)) On an hourly bill, every round is a new entry, and the lawyers quoted above find that the clients who produce rounds in seconds are the keenest to dispute an hour of answers. On a fixed fee with nothing written down, the same rounds come out of your margin. Neither model says in advance **what the rounds will cost**, because neither expected the client to bring a second drafter. The fix is a few lines in the engagement letter. Say what the fee covers: the draft, your review, and **a set number of rounds of client comments**, each round one consolidated set from the client, whether a person or a machine wrote it, sent within a set window. Rounds within that number and that window are answered inside the fee. A round past either is billed by the hour, at a rate stated upfront, and correcting the firm's own mistakes stays inside the fee. Rule 1.5 already asks firms to tell the client the scope and the basis of the fee, preferably in writing. The rounds clause **writes the client's AI into that scope**. ![One matter, two columns. Hourly: the review and each round of the client’s AI questions become bill entries, the third disputed. Fixed fee: two rounds covered, a third billed at the letter’s rate.](https://qvery.ai/blog/ai-and-the-billable-hour/illustration-rounds-billed-two-ways.webp) *Follow the third round down each column: on the hourly bill it is an entry to argue over; under the letter it was priced before it came.* ## The Savings Are Uneven, and the Hourly Bill Hands the Spread to Your Client The strongest case against this comes from inside firms. A careful review of a first draft [takes nearly as long as writing it](https://qvery.ai/blog/ai-verification-tax/), so even a good AI draft saves a modest share of the time, and a bad one costs more. **Tips** > it should take you about the same amount of time to review a first draft of something as it would take you to draft it. If the drafter did an EXCELLENT job, you are saving maybe 25% of the time, and if they did a poor job it might take up to 25% longer. > ([r/biglaw · Mar 2026](https://www.reddit.com/r/biglaw/comments/1rsyiku/harvey_ai_the_death_of_junior_associates/oaae5dy/)) > The hours spent by lawyers is literally THE valuable inventory the firm has to sell > ([r/biglaw · Mar 2026](https://www.reddit.com/r/biglaw/comments/1rsyiku/harvey_ai_the_death_of_junior_associates/oaaj26d/)) Savings differ by lawyer, by matter and by tool. And where partner pay counts hours, a fixed fee asks the people who sell time to stop selling it. > ⚖️ **Where the skeptics are right** Many matter types don't qualify yet. Where review takes as long as drafting, or no two matters look alike, a fixed fee is a guess, and a guess loses money on the long ones. Those stay on the hour. The hourly bill doesn't remove that spread. It hands it to the client, entry by entry, and a client who sees one NDA billed at four hours and the next at one is going to ask why. A fixed fee moves the spread inside the firm, where you can manage it. Set the fee from [what the matter type takes now](https://qvery.ai/blog/ai-native-law-firms/), with AI in the work and the client's rounds counted, so **the client sees part of the saving** in the price before the work starts. Partner pay is the harder half. If hours are the inventory, a fixed fee on AI-drafted work looks like a discount on stock. But that stock is already shrinking on every hourly invoice the tool touches. > The hours AI removed were never going to stay on the invoice. Pricing the reviewed draft is how a firm keeps part of what they were worth. ## How Qvery Builds the Drafting Agent a Fixed Fee Can Rest On For a firm your size we'd build the agent around a single matter type, say the commercial agreements your corporate group drafts on the firm's own forms. It reads the matter file and the client's instructions as they arrive, drafts the first version from your templates and your firm's positions, and hands the reviewing lawyer **the draft with every departure from the form marked** and the source of each position beside it. It picks up each new matter of that type **on its own, on autopilot**, while the lawyers keep the review and the signature. It also keeps the record a fixed fee needs: for each matter, **the lawyer's review time and every round of client comments**, logged into the time and matter systems your firm already uses. The build starts with your lawyers: which forms they start from, what they change for which clients, and what a reviewer sends back. Within **two weeks** there's a first working result, connected to your document and practice management systems, and we train the lawyers who review its drafts. We report two numbers for every week it runs, **hours saved and errors avoided**, and the first of them is where your next fee starts. Let Us Build the Drafting Agent for the Matter Type You Move First: https://calendly.com/qvery-vlad/30min ## Put Your Most Repetitive Matter Type on a Fixed Fee First AI-drafted work belongs on a fixed fee with the client's rounds written in. Keep the hour for what clients still want to pay outside counsel for: commercial insight, complex matters and expertise. **Clients say they would mainly pay outside counsel for judgment, not routine work** (share of in-house legal professionals) In Everlaw's 2026 survey of U.S. in-house legal professionals, 56% said clients should mainly pay outside counsel for business and commercial insight, against 28% for document review and 27% for routine legal work. | Label | Value | |---|---:| | Business and commercial insight | 56% | | Managing complex matters | 54% | | Specialized legal expertise | 54% | | Document review | 28% | | Routine legal work | 27% | Everlaw with Wakefield Research surveyed 300 U.S. in-house legal professionals from June 26 to July 30, 2026 (margin of error plus or minus 5.7 points). Each bar is the share naming that as what clients should primarily pay outside counsel for; more than one answer was allowed, so the shares do not add to 100. Source: Everlaw with Wakefield Research: In-House Innovation Report (2026) Routine work comes last. Which of yours goes first depends on what your lawyers draft most, and our legal playbook sorts a firm's document work by where an agent can take the first draft. Industry Playbook: https://qvery.ai/industry-playbooks/ai-agents-for-legal/ Then, starting this quarter: 1. **Pick one matter type** One where AI writes most of the first draft and the scope repeats: standard commercial agreements, NDAs, routine filings, the memo on a settled question. 2. **Run a quarter of it with AI writing the first draft** Bill it as you do now, and count what it takes: drafting, review, and every round of client comments. 3. **Write the fee and the rounds into the next letters** For new matters of that type, say what the fee covers, how many rounds, in what window, and the hourly rate after. 4. **Leave everything else on the hour** Each matter type moves when its own record says it can. From then on, each quarter's record sets the next fee. Plan How Your Firm Drafts, Reviews and Bills Once AI Writes First: https://calendly.com/qvery-vlad/30min ## Frequently asked questions ### Should law firms bill hourly for AI-drafted work? Only for the time a lawyer spends on it. Under the ABA's Formal Opinion 512, an hourly bill carries the time worked, including putting information into the tool and reviewing its draft, never the hours the draft used to take. For work AI mostly drafts, a fixed fee for the reviewed draft is the better unit. ### Can a lawyer bill for the time AI saved? No. The ABA's ethics committee says a lawyer billing by the hour must bill actual time, and an efficient lawyer may not charge for more hours than were worked. On a flat fee the test is reasonableness: keeping the same flat fee after AI makes the work much faster may be unreasonable, so set the fee from what the work takes with AI. ### Can a firm charge clients for its AI tools? Sometimes, and only if the client knows the basis first. Opinion 512 says that before charging for [AI tools](https://qvery.ai/blog/best-legal-ai-tools/), a lawyer must explain the basis for the charge, preferably in writing, and general office overhead isn't billable. Most firms will find it simpler to price the tool into a fixed fee than to bill it as a line. ### Which legal work should move to fixed fees first? The matter types where AI writes most of the first draft and the scope repeats from one matter to the next: standard commercial agreements, NDAs, routine filings and memos on settled questions. Strategy, novel deals and matters whose size can't be known at the start should keep the hour. ### Who pays when a client runs your draft through AI and sends back questions? Whoever the engagement letter says. Without a written limit, the firm bills hours the client may dispute, or writes them off on a fixed fee. Name a set number of rounds of client comments, from a person or a machine, inside a window, and an hourly rate for anything past either. ### How many review rounds should a fixed fee include? As many as the matter type usually takes. Treat one consolidated set of client comments as a round, count the rounds on your last matters of that type, and write that number into the fee, with a window for sending them. If clients start sending their AI's output, the count tells you within a quarter whether the number holds. ### What should an engagement letter say about a client's AI? What the fee covers, how many rounds of client comments it includes, the window for sending them, and the hourly rate for anything after. Say that comments count the same whether a person or an AI wrote them. Rule 1.5 already asks for the scope and the basis of the fee, preferably in writing. ### Do clients expect lower legal fees because of AI? Most do. In the Thomson Reuters Institute's 2026 survey, just 15% of in-house lawyers expected firm fees to hold or rise as AI use grows. In Everlaw's 2026 survey of U.S. in-house teams, 60% of those who hire firms expected lower fees or fewer billed hours when the firm uses AI. ### Will fixed fees cut a law firm's revenue? Not by itself. On an hourly bill, the drafting hours AI removes come off the invoice whatever the firm decides. A fixed fee set from what the work takes now, with the review and the client's rounds priced in, lets the firm choose how much of that saving to keep. Revenue then depends on the fee and on filling the freed hours. ### Does a fixed fee change how a firm should track time? It shouldn't stop it. Keep recording the hours on each fixed-fee matter, internally: drafting with AI, review, and every round of client comments. That record shows which matters ran long and why, and it's what next quarter's fee is set from. A firm that stops the clock the day it fixes the fee is pricing next year from memory. ### What do clients still want to pay outside counsel for? Judgment. In Everlaw's 2026 survey of 300 U.S. in-house legal professionals, 56% said clients should mainly pay outside counsel for business and commercial insight and 54% for managing complex matters, while 27% picked routine legal work. That's the split a firm can price around: a fixed fee for the drafting, the hour for the judgment.