AI Is Reshaping Legal Work and Putting Pressure on the Billable Hour

Summary

Artificial intelligence is now used by almost 90% of legal professionals in the U.K. and Ireland, according to Clio’s 2026 legal report. Among firms using AI, nearly 80% said they could handle more work without adding resources, while more than 70% said it reduced costs by absorbing administrative tasks. Law firms including A&O Shearman and Slaughter and May are deploying Harvey agents for loan-agreement review, regulatory filings, research, and document analysis; some tasks that once took hours can now be completed in minutes. These efficiencies are challenging the billable hour, and about one in five firms with broad AI adoption report difficulty meeting hourly targets. A Deloitte survey found senior legal leaders expect the share of work billed by the hour to fall from 72% to 44% over the next two to three years. Routine document work is most exposed, while complex matters still require human judgment, including checking AI outputs and identifying hallucinated cases. AI is also removing repetitive assignments that traditionally helped junior lawyers develop legal reasoning and drafting skills, so firms may need to create deliberate alternatives. A&O Shearman is placing greater emphasis on curiosity and entrepreneurship and developing legal-engineering, product, and AI-delivery career paths. Whether AI improves lawyers’ working lives will depend on how firms use the recovered time: Clio reports that many lawyers work evenings and weekends more often than they would prefer, although some already say their days are improving.