If you’ve ever hired a lawyer, you know the pain of the billable hour. You get the invoice, and it’s filled with charges like “0.1 hours to read an email” or “0.3 hours for a phone call.”
I know this is going to upset the lawyers in the crowd, but let’s face it: It’s an outdated system that literally rewards people for taking longer to do things.
⚖️ Losing their appeal
I was reading a fascinating piece in WSJ (paywall link) about how AI is turning this whole 1960s paying-by-the-hour model upside down.
The short version? AI is doing the grunt work faster and better than most humans can. Which means billing by the hour makes zero sense.
Let’s break it down.
Say an attorney charges $500 an hour to review a client’s contracts, documents, emails, texts and everything else for a case. Say it takes 20 hours to go through it all, that’s a $10,000 bill. But that same lawyer can upload the documents into an AI tool that reads them, flags the risks and summarizes all of it in under a minute.
There’s a big problem here. If the law firm keeps billing by the hour, that 30 seconds of work is worth about $4.16. Ouch.
⏳ It’s about time
Firms aren’t dumb. They’re pivoting fast. Instead of billing for time, they’re shifting to flat fees.
You pay $2,000 for a contract, $5,000 for a divorce and $10,000 for a complicated will for a business owner with four wives, 10 kids and a pile of assets and liabilities, no matter if it takes five days or five minutes.
That’s great for us. I’d love predictable pricing and a faster turnaround.
The death of the billable hour is coming for anyone who trades time for money on tasks AI can crush. I’m looking at you, consultants, CPAs, freelancers, expert witnesses, coders, designers and copywriters.
If your business model relies on charging for the time it takes to do something rather than the value of the result, you are officially an endangered species. We’re moving from an economy of “how long did it take?” to “how good is the result?”
👊🏼 Do you have a friend about to hire someone by the hour? Be a pal and forward this email first. You might save them a fortune. Friends don’t let friends pay human prices for robot work. Or at least convince them not to become lawyers if they’re Irish. You see, they can’t pass the bar. (lol)