AI-Generated Legal Briefs Reach An Important Milestone

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Since the explosion of large language models, there has been a lot of speculation in the law firm community whether or when you will be able to generate a sophisticated legal brief using AI.

We may have reached that point.

On October 28th, Peter Diamandis, the founder of XPrize, shared a post on X that referenced an AI-generated brief in a patent lawsuit.

 

Peter H. Diamandis, MD tweet

This got widespread attention. AI isn’t just assisting in mundane tasks anymore; what used to cost clients $1,000 might, soon, just take five minutes and a couple of dollars in credits, no attorney involved. Diamandis is no lawyer, of course, but his suggestion that this level of efficiency could disrupt the traditional billing model in law is not wrong either. As AI’s capability continues to evolve, quality legal work will potentially become accessible at unprecedented speed and low cost.

This also means that lawyers have the rare opportunity to be at the forefront of this unprecedented technological shift if the industry plays its cards right. But what are the challenges to overcome before we get there?

Tomorrow is Coming Today

Diamandis’ post sparked a lot of different opinions, of course. Some commenters were concerned that making complex legal work this affordable might flood the courts with cases, leading to even worse wait times and delays due to high demand. Others wanted to believe we are entering a “post-credentialism” era of sorts, democratizing access to legal services in an unprecedented way. And some more were surprised that associates could even charge $1,000 an hour in the first place.

Whatever the case, this underscores a concern that has been brewing within the legal community: will AI actually make it easier to access quality legal work? Or will it just optimize certain tasks without changing how cases are ultimately resolved? Many responses stressed that if both parties in a dispute have access to similar AI tools, litigation may shift to focus on slight variations in strategy, where “fine-tuning” would become an essential part of the process.

And in cases with vast sums at stake like patent litigation, even a marginal advantage in brief quality or persuasiveness can be worth millions, so expertise in the law, prompt engineering, and AI-assisted strategy could become the new gold standard. However, so far, this is all hypothetical. All the ethical and strategic implications of this technology are unfolding, which makes it easy to overlook a bigger and more immediate issue. One which impacts the now and today of law firms.

Leaving Time in the Past

Diamandis’ post and the surrounding conversation highlight both an incredible technological leap and a warning for our industry. If AI can create patent briefs that are near human-level in quality, we’re standing at the brink of a shift that challenges the industry’s reliance on the billable hour model.

So far, hourly billing has been particularly suited to the unpredictable nature of legal work. Cases frequently evolve in unexpected ways, and billing by the hour accommodates this uncertainty by allowing firms to be flexible with their services. In litigation, for instance, the open-ended structure of hourly billing enables lawyers to adapt as necessary, assuring clients that their representation remains as thorough and responsive as the situation demands.

With AI, however, clients may soon be able to access high-quality legal services (in this case, the writing of a brief) in minutes rather than hours or weeks. And while this doesn’t mean lawyers will become obsolete, we will need to rethink how the economics of this job will work moving forward. The most likely scenario is that the industry will shift to “value-based billing” rather than “time-based billing”, which will test the flexibility and resilience of many law firms and practice areas. And from where we stand, it could look like this:

  1. Outcome-Based Billing: Completing complex tasks in a fraction of the time it once took will pressure law firms to move towards a model where fees are tied to the quality of results, client objectives, or strategic gains achieved rather than the hours invested. This will effectively align legal fees with the stakes and outcomes of a particular case.
  1. Hybrid AI + Expertise Billing: AI may handle drafting, research, and even some analysis, but lawyers will remain essential for overseeing, refining, and finalizing the work. A hybrid billing model might bill for AI-facilitated tasks at a lower, flat rate, while strategic consulting or high-stakes advisory work would command a premium. This approach could allow firms to balance accessible rates with the necessity of human expertise.
  1. Subscription-Based Legal Services: As AI reduces the cost of producing high-quality legal work, firms may start offering subscription-based services where clients would pay a recurring fee to access predefined services and automated solutions, with a lawyer’s input only on critical points. This could work well for clients who need regular access to legal documents and advice, like contract reviews or intellectual property filings, at a predictable cost.
  1. Fixed Fees for Defined Deliverables: With AI, the predictability of document preparation and case preparation timelines could allow firms to set flat fees for specific legal tasks, such as drafting a patent application or a brief. This fixed-fee model makes legal costs more predictable and aligns well with tasks AI can streamline, which clients will certainly find more appealing than hourly rates. Using the example of patent law above, AI-assisted drafting can enable lawyers to offer fixed rates for well-defined services where both parties have a clear expectation of the time and cost involved.
  1. Premium Billing for Strategy and Specialized Advice: As AI handles more routine, research-intensive work, lawyers will focus on the strategic nuances AI can’t handle. Premium billing for these uniquely human elements (like strategy, negotiation, and tailored advice) could reflect a new billing tier in the legal market. Law firms may emphasize these high-value, irreplaceable contributions to clients, establishing a clear distinction between the cost of AI-driven processes and the higher fees for nuanced, human-led decision-making.

The Countdown Has Started

It’s easy to see why many are concerned about the future of the profession, but right now there is an opportunity to move ahead of the curve. The core issue here is that lawyers will need to reshape their value proposition and highlight areas where genuine expertise and strategic thinking remain critical. For those willing to lean into this shift, AI could be the key to both streamlining and elevating the value we bring to the table.

Now, you can make the argument that all of this is speculative, but if there is one thing that is almost assuredly not correct, it’s thinking that this doesn’t matter. LLM’s are improving by a factor of 10 every six months or so, so the question is not if that brief generated in 10 minutes is as good as actual legal briefs now, but the sure sign that in the relatively near future, they will become indistinguishable from work done by actual expert lawyers.

So, this moment is less about clinging to old methods and more about embracing a more homogenized and less lucrative future, especially if lawyers are not willing to adjust or reimagine a law firm’s place in it. A mistake that might, in short term, end up costing far more than just a few billable hours.

The Right Way a Law Firm Should Organize Its Invoicing and Collections Processes

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Lawyers are bad at being paid on a timely basis. According to a 2023 report published by Clio, concerning mid-sized law firms: 

  • 11% of legal fees go unpaid on average across the industry. 
  • The average time gap between sending an invoice and getting paid in full is 52 days.

This tells us that most law firms don’t recognize that even seemingly modest reductions in the payment cycle will make a large impact on cash flow. However, in our experience, many of the most egregious problems can be avoided by changing one aspect of the invoicing and collection process.  

Too many firms create a general system and then expect specific cases to fit neatly into them, treating them as being uniform or very similar. That approach is fatal to effective collections and to avoid increasing your accounts receivables. Treating every client as fungible is like betting the same amount on every poker hand. 

A better and more effective approach is to treat clients not as uniform but as essentially and predictably variable.  Some clients are more likely to have problems paying you on time; for example, for practice areas like Family law, it’s common to see cases dragging longer than expected, with an increasing emotional and financial toll that needs to be taken into account, especially when the result is not shaping up to be what the client wants.  

Thus, the best systems identify these red flags and adjust to them. You need collection systems that measure and vary alongside the risk of non-payment. This allows your firm to be proactive about the issue, creating strategies to deal with potentially problematic clients from the very beginning. For high-risk clients or cases, consider requiring a larger retainer upfront, getting paid in full before any court decision, or setting shorter payment deadlines with more frequent, even daily, billing intervals. 

In other words, client management is an important part of the collection process, and lawyers should be more sensitive to the risks of non-payment that every client can present. Technology can be a key aspect to streamline this. Billing software can automate reminders, track payment deadlines, and provide clients with easy-to-use payment portals to reduce the administrative burden on your firm. And they can also provide valuable insights into payment patterns, helping you refine your risk assessments over time. 

The bottom line is that a well-organized invoicing and collections process is key for your law firm’s cash flow and overall financial stability. Start recognizing the variability of your client’s payment behavior and maintain clear communication to significantly reduce the risk of non-payment. After all, a law firm that is diligent about its own financial health is better positioned to serve its clients effectively. 

Why You Might Want to Consider Charging a Flat Fee

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Too many lawyers have the misconception that flat fees are only appropriate for small, simple matters such as basic wills and trusts or entity formation. There is, however, a much broader range of work where flat fees are appropriate. Flat fees should be considered when one of the following factors is present:

 

  1. The value you provide in expertise is greater than the time you’ll spend. If you’ve been in your practice area for 10+ years, you likely have a level of expertise that means you don’t have to spend as much time researching as you once did. You know the issues your clients face, and you can apply your knowledge quickly. In a case like this, charging by the hour isn’t an effective way to value your work. If you want to avoid charging less and less for more and more expertise, consider a flat fee.

 

  1. Your work spans a short period of time. When a lawyer provides a lot of value quickly, it can be cumbersome to charge the client on an hourly basis and then bill them monthly. Doing so runs the risk that you’ll have to collect from the client after completing your work – once you’ve lost a lot of leverage. In this scenario, using a flat fee can serve to avoid collections issues.

 

When both factors are present, it is more likely that a flat fee can be substantial. It is not uncommon for appellate lawyers to ask clients to pre-pay most of the fee for a brief that needs to be drafted in 30-45 days, and that can easily run into the high five figures or beyond. Likewise, corporate internal investigations, especially involving white collar criminal matters, often command significant flat fees.

 

Charging and collecting a flat fee does raise some specific accounting issues, so be sure to comply with your jurisdiction’s rules. For instance, Rule 1.15(b) of the State Bar of California’s Rules of Professional Conduct, which was approved in November 2018, addresses when a lawyer charging a flat fee may withdraw money from their client trust account.

 

If you have only been charging hourly rates, it may be time to add flat fees to your repertoire.

How to Avoid Getting Stiffed by Clients at the End of a Representation

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Clients are less likely to pay their lawyers toward the end of a representation. This is especially true for hourly work and those situations where the client has already paid enough to feel justified in stopping payment. For attorneys, the risks of non-payment are especially pronounced when a representation approaches a game-changing event, such as a hearing on a dispositive motion or a closing date for a transaction. In these scenarios, the law firm is likely to send out a final bill after it has completed the lion’s share of its work if the matter suddenly ends. As consultants to lawyers and law firms, we have seen that these bills are especially difficult to collect in full because, at this point, the law firm has lost its leverage over the client.

Fortunately, there are ways to minimize the risks of non-payment which are consistent with the firm’s ethical responsibility not to withdraw from the representation when doing so could prejudice the client. The best strategy is to alter the billing cycle to avoid sending out a bill after the major event in the case has already taken place. Ideally, you want as much of the bill paid off before the hearing, closing, or other key event as possible.

Too many attorneys treat the billing cycle as fixed and as something that they need to serve rather than the other way around. It is generally advisable to maintain a monthly billing cycle – but not always. There are times when bills should be sent out off-cycle.

If you work at a firm where billing off-cycle is likely to be met with resistance, the best approach is to begin raising this issue more than one billing cycle in advance. We have advised lawyers to raise this issue in writing about 45 days before the date of the hearing, closing, or other event that could end the representation. If you anticipate pushback from the people who handle your invoices, provide a written estimate of how much money will be at risk for non-payment if the firm adheres to its normal billing cycle. This is especially effective for non-equity partners, Of Counsel, and associates who often don’t play a large role in sending out client bills.

In addition to changing the timing of the invoice, it can be helpful to change who provides the last significant bill to the client. Specifically, when the risk of non-payment is predictably high and the amount at stake is considerable, the client is more likely to pay attention to the bill if it is transmitted by the lawyer leading the representation. One way to do this would be for the lawyer to add the handling of the fee as an agenda item to a meeting or call with the client.

If the prospect of talking to your staff about making an isolated and fully justified exception to the monthly invoicing cycle causes heartburn, that may be a symptom of a larger problem. At too many firms, the billing cycle is run for the convenience of the staff. There are many aspects of creating an efficient cash flow system that justify making lawyers adhere to deadlines. Requiring attorneys and other timekeepers to submit their time by a set deadline, for instance, is perfectly sensible. But your invoicing system should be flexible enough to accommodate lawyers who request that bills be sent out at a specific time because of their knowledge of a particular client or matter.