Extract from Petra Pasternak’s article, “What Comes After the Billable Hour? Ken Callander Says Firms Should Charge for Value, Not Time.”
Advanced AI is changing the legal industry’s traditional relationship with time. When an AI system can generate a first draft of a motion or summarize thousands of pages of evidence in minutes, the billable hour becomes a less reliable indicator of value.
For Ken Callander, founder of Value Strategies, the question is not so much whether the billable hour will survive, but what comes after. What replaces time as the new proxy for value? If clients are no longer paying for the time it took their counsel to do the work, what should they be paying for?
Drawing on a unique background that includes running legal operations at Uber and CMO duties at Davis Wright Tremaine, Callander advises corporate legal departments on transitioning to value-based fee arrangements, which he argues can lead to better budget predictability for clients and higher profits for their firms.
