BillableHour News & Analysis

AI Adoption in UK Legal Sector Impacts Billable Hours

Artificial intelligence (AI) is now in use by almost 90% of legal professionals in the U.K. and Ireland. According to Clio's U.K. & Ireland Legal Insights Report 2026, many law firms using AI report that nearly 80% can handle more work without additional resources, and over 70% have cut costs by reducing administrative responsibilities. Legal firms like A&O Shearman and Slaughter and May are implementing AI for complex tasks such as loan agreement review and regulatory filings analysis, aiming to complete time-consuming work in minutes rather than hours. This shift has placed significant pressure on the traditional billable-hour model, which is central to many law firms' business strategies. According to Clio's report, around 20% of firms using AI face challenges in meeting billable-hour targets. A Deloitte survey indicates that the practice of billing by the hour is expected to drop from 72% to 44% globally in the next two to three years. Despite routine documentation being more efficiently handled by AI, complex legal tasks still demand human judgment, adding another layer of complexity to billing and training structures. The change matters to investors because it signals a fundamental shift in how legal services are billed and structured. This shift could influence long-term financial planning and profitability for legal firms that adopt AI, impacting costs, efficiency, and revenue models.