The legal profession stands at a crossroads. As artificial intelligence transforms how lawyers work, the traditional billable hour—the foundation of law firm economics for over a century—faces its greatest challenge yet. At TechLaw Fest Singapore 2025, industry leaders gathered to debate whether AI and the billable hour can coexist, or if the profession is heading toward a fundamental restructuring of how legal services are priced and delivered.
The discussion revealed a complex landscape where efficiency gains from AI are forcing both law firms and their clients to reconsider long-established pricing models. While some predict the death of the billable hour, others argue it will evolve rather than disappear entirely.
The Current AI Adoption Landscape: From Cautious Experimentation to Strategic Implementation
The legal industry’s relationship with AI has matured rapidly over the past year. Eric Chin from PwC Singapore noted that the market has exploded from just 35 large language model solutions two years ago to over 630 solutions across more than 20 product categories today. This dramatic expansion reflects growing confidence in AI’s practical applications within legal practice.
However, adoption patterns vary significantly by region and practice type. Thomas Chuang from Thomson Reuters emphasised the importance of starting with problems rather than solutions: “You start with a problem. And then once you define your problem you start to look for solutions that solve that problem,” said Chuang.
This problem-first approach has led to AI implementations focused on contract negotiation, legal research, and document analysis.
Tania Pavaska from Microsoft, speaking from an in-house counsel perspective, highlighted practical applications that have gained traction: “We do use Copilot a lot in our day-to-day work… for drafting emails, for creating timelines, for finding emails for looking through a presentation and pointing out to the slide that has the meat in it.”
These efficiency gains are tangible and measurable, creating immediate value for legal teams.
Yet the panelists also identified clear boundaries for AI adoption. Alex Toh from Magellan Law shared his experience testing AI on regulatory analysis: “The issue with [AI] is precision as well as interpretation of language. And in regulatory analysis, that is very fact sensitive… The tool isn’t designed for something like that.” This highlights a crucial distinction between tasks suitable for AI assistance and those requiring human judgment.
The discussion revealed a critical concern about cognitive dependency. Chuang warned against “cognitive laziness,” comparing overreliance on AI to never learning how to do maths because calculators are available. “What may be extremely profitable now because work can be churned out very quickly, and this is good for us now, but will it be good for the profession 20 or 30 years down the road when we have a generation of lawyers who have not used critical thinking.” This emphasises the need for judicious AI implementation that enhances rather than replaces our human critical thinking skills.
Pricing Model Evolution: Beyond the Traditional Billable Hour
The impact of AI on legal pricing models is already becoming apparent, though the transformation is more nuanced than a simple replacement of hourly billing. The panelists agreed that while the billable hour faces pressure, its complete elimination is unlikely in the near term.
Pavaska offered a compelling analogy: “If you are a Michelin star restaurant, and it has this amazing head chef. I don’t want to know how many hours your chef took to make that dish… I want to have a beautiful gastronomic creation my table, and in my mouth. I don’t care how long it took to cook, or how long each of the different levels of chefs spent on it, that’s fine, as long as there is a fixed fee for it.”
This shift toward outcome-based pricing is already happening in certain practice areas. Chin explained that the most significant productivity gains from AI occur in “process-driven practices” where work is standardised and predictable. These areas are naturally suited to fixed-fee arrangements because the scope and requirements are well-defined.
However, the relationship between AI efficiency and pricing remains complex. Rutvik Rao from August noted a key client expectation: “Clients are always looking for transparency and, to be honest, looking for fairness… clients are going to ask you ‘did you use AI to get the efficiency that you got? Why isn’t my pricing getting reduced?’”
This client pressure is driving law firms to reconsider how they structure their offerings. The emergence of hybrid pricing models appears to be the most likely outcome, with different components of legal work priced according to their nature and value. Rau suggested that “maybe 80% of the task can be done flat versus the rest is going to be done on flexible basis, at flexible hourly cost, that might actually just be just as high because of the value going in to provide that judgment.”
The regional differences in pricing model adoption also emerged as a significant factor. Rau observed that firms in competitive, commoditised practice areas are more likely to embrace AI and alternative pricing structures out of necessity: “The competitiveness that we’re seeing within Asia… firms are thinking about this as an opportunity to gain market share.”
The Future of Legal Value: Strategic Partnership Over Task Execution
Perhaps the most significant insight from the discussion was the evolving definition of legal value. As AI handles more routine tasks, lawyers are being pushed toward higher-level strategic work that requires human judgment, cultural sensitivity, and relationship management.
Pavaska emphasised the irreplaceable human elements in her investigative work: “When it comes to interviewing people, I am not going to rely on an AI-driven summary of questions to ask. You can’t do that human element of changing the question based on the eye contact, the expression… that sort of listening, that is something AI cannot do.”
This shift has profound implications for how legal services are valued and priced. Rao explained that the true value lawyers provide is ” that strategic part… that can provide your client a new perspective, a new viewpoint, which maybe they’re not seeing, because you have a completely different way of thinking about situation.”
The panelists suggested that this evolution could actually increase the value of specialised legal expertise. As routine work becomes commoditised through AI, the premium for strategic thinking and specialised knowledge may grow. This could lead to a bifurcated market where routine legal work is priced as a commodity while strategic advisory work commands premium rates.
Chuang’s prediction about the future of the billable hour reflects this complexity: “The billable hour will die, but it has nothing to do with time savings. It arises from uncertainty, it was designed to derisk a lawyers problem because when they first receive a matter, I don’t know how long its going to take. So I think where AI will come into this, is firstly helping get an understanding of the full scope of work at the very beginning. “
Better scope definition through AI analysis could enable more fixed-fee arrangements while still requiring time tracking for data collection and continuous improvement.
The discussion concluded with innovative pricing model suggestions that reflect this new reality. Pavaska proposed a “Netflix-style billing model… like a subscription, cheap, commoditised, but the a client can add on special features.” This subscription-plus model could provide predictable costs for routine work while allowing premium pricing for specialised services.
As the legal profession grapples with AI’s transformative impact, the billable hour’s future appears to be evolution rather than extinction. The most successful firms will likely be those that can effectively segment their services, using AI to deliver routine work efficiently at competitive prices while positioning their human expertise as premium strategic partnerships. This transformation represents not just a pricing model shift, but a fundamental redefinition of what client’s value in legal services – and what they’re willing to pay for.
