The Brief:
72% of Aussie law firms say AI hasn’t changed their billing practices, despite widespread efficiency gains across the profession.
Disclosure is the dividing line: firms cutting billable hours are also disclosing their telling clients about their AI use are the ones actually reducing billable hours.
Everyone’s betting AI will be the death of the billable hour. Well, it hasn’t happened yet.
72% of law firms say generative AI has had no impact on their billing practices, according to Best Lawyers’ 2026 Best Law Firms Australia Legal Market Report. Only 15% report reduced billable hours for certain tasks.
That’s consistent with other data. A recent Axiom survey of 600+ senior legal leaders globally found just 6% of law firms charge less for AI-assisted work. 34% are charging more.
Best Lawyers CEO Phillip Greer says the profession is at an inflection point it hasn’t quite tackled.
The billable hour has worked for a century because time was a reasonable proxy for value – AI is the first technology that meaningfully breaks that proxy
The efficiency is real. It’s just not flowing to clients.
Disclosure is the dividing line. Among the small share of firms that have reduced billable hours through AI, 65% are also openly communicating their AI use to clients. Transparency and billing reform go hand in hand.
“The disclosure question isn’t really about disclosure, it’s about whether firms will communicate their AI use as a value-add or a normal administrative process, like any other piece of software,” Greer said.
Some firms are better at it than others. 91% of large firms actively communicate their AI use to clients, compared to just 50% of midsize and 41% of small firms.
“The legal profession is actively working out whether AI is a competitive advantage worth marketing or a risk best kept quiet, and that choice will shape how clients perceive legal value for decades to come.”