Artificial intelligence is reshaping the legal landscape in the U. K. and Ireland, compelling law firms to rethink traditional billing practices. According to the 2026 U. K. & Ireland Legal Insights Report by legal software company Clio, nearly 90% of legal professionals in these regions are now utilizing AI, which is challenging the long-standing convention of the billable hour.
AI's integration into legal practices has enabled firms to handle more work without increasing resources, with almost 80% of firms reporting this benefit. Over 70% also noted cost reductions due to AI taking over administrative tasks previously managed by support staff. This shift is prompting a reevaluation of how lawyers allocate their time, how they charge clients, and how new lawyers gain experience.
Some of the largest law firms in the U. K. are already implementing AI to streamline operations. A&O Shearman, for instance, has collaborated with legal AI company Harvey to develop agents capable of reviewing loan agreements and analyzing regulatory filings in minutes, tasks that traditionally required several hours. Similarly, Slaughter and May has deployed Harvey across all practice areas for regulatory research and document analysis.
The billable hour has been a cornerstone of many law firms' business models. However, with AI drastically reducing the time spent on document review and drafting, the financial dynamics are becoming less straightforward. Nick Rowles-Davies, founder and CEO of Lexolent, highlighted the challenge, stating that firms can no longer justify charging extensive hours for tasks completed rapidly by AI.
As AI adoption grows, about one in five firms that have embraced the technology extensively report difficulties in meeting billable-hour targets. Senior legal leaders anticipate that the proportion of work billed by the hour will decrease from 72% to 44% over the next two to three years. While AI can automate standard document processes, complex legal work still demands human judgment, particularly in interpreting AI outputs and strategizing for clients.
AI's impact extends to the training of junior lawyers, traditionally reliant on repetitive tasks to learn the fundamentals of law. Mansoor Soomro, head of the Future of Work Research Unit at Teesside University, noted that reviewing documents, drafting contracts, and researching cases have been crucial for developing legal skills. With AI taking over these tasks, firms must find new ways to provide learning opportunities.
Francesca Bennetts, head of legal talent at A&O Shearman, emphasized the importance of fostering "curiosity and entrepreneurship" among lawyers. The firm is also creating career paths in legal engineering, product, and AI delivery, areas that were virtually non-existent a few years ago. "The need to develop exceptional lawyers doesn't go away, " Bennetts stated, underscoring the ongoing demand for skilled legal professionals.
Soomro predicts that judgment will become increasingly valuable in the legal sector, as lawyers will spend more time verifying AI outputs and interpreting their implications for clients. The future may favor lawyers who can connect multiple areas of expertise to solve complex client issues, rather than those with deep knowledge in a single area.
Whether AI efficiencies will ultimately improve lawyers' work-life balance remains to be seen. Clio's report indicates that 51% of legal professionals work evenings, though only 32% prefer to do so, and 22% work weekends compared to 11% who would choose to. Joshua Lenon, Clio's lawyer-in-residence in New York, believes that AI is already enhancing the work experience for some lawyers. "Lawyers [are] telling us that their day is getting better, " Lenon remarked, as AI tools become more widespread.
