AI Should Lead to Reduced Billing Hours, Says Senior Counsel

AI’s Impact on Legal Billing Practices

Law firms are being encouraged to adjust their billing practices to reflect the efficiencies brought about by artificial intelligence (AI). Amitabh Lal Das, a senior General Counsel, emphasized that clients should not be charged for the traditional number of man-hours if AI reduces the time required for legal tasks. Das spoke at a panel discussion titled ‘AI and Legal Practice: Opportunity, Trust and Accountability’, organized by the Legal Tech Committee of the Internet and Mobile Association of India (IAMAI) in New Delhi on August 17.

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Das highlighted the financial implications for companies, particularly in sectors like technology and automobiles, where novel legal issues frequently arise. Traditionally, companies have borne the cost of law firms’ learning curves, as these firms invest time in understanding new legal challenges. Das argued that with the advent of AI, which can expedite research processes, clients should not be billed for this learning time. “In the past, you were learning at my cost. There have been times when, in the billable hours that I went through, I was charged more for research than for the actual advice. Now, with AI, if you know how to use it for research, then please use it. Don’t charge me for it,” he asserted.

Expectations from Law Firms

Das also mentioned that AI could significantly reduce the time associates spend on various tasks. “This also applies to a lot of the other things that you do. When you have an associate working seven hours to do something, maybe just building a few things, you can do it within ten minutes if you know how to use AI,” he explained. This efficiency could allow companies to negotiate more favorable legal fees, with an expected decrease in legal costs due to AI enhancements.

Moderated by Arjun Sinha, a Partner at AP & Partners, the panel also included Senior Advocate Chander Uday Singh and Advocate Harsh Kaushik. Sinha questioned whether AI might transform legal service pricing models from hourly billing to performance-linked arrangements, given the reduction in time AI could offer.

AI as a Research Tool

Singh acknowledged AI’s potential as a legal research tool, allowing lawyers to start with a broad range of materials. However, he cautioned against relying on AI for ready-made answers, warning of AI’s potential to “hallucinate judgments and tailor its responses according to what it believed the user wanted.” He advised that while experienced lawyers might identify dubious AI outputs, younger lawyers could be susceptible to taking AI-generated information at face value without proper verification.

Kaushik emphasized that lawyers remain responsible for the material presented in court or to clients.

Regulatory Considerations

A separate panel focused on digital regulation, moderated by Kaushik Moitra, Partner at Bharucha & Partners. The panel included Senior Advocates Samar Bansal and Karuna Nundy, alongside Rajeev Nair from HP. Bansal advocated for objective digital regulation with minimal discretionary power for regulators to prevent misuse. He also argued against adopting foreign regulatory models without considering India’s unique economic and startup context. Nundy highlighted potential bypasses of legal safeguards in content takedowns under Section 79 of the Information Technology Act, while Nair discussed the importance of the Digital Personal Data Protection framework’s implementation.