Billing for AI Work

Billing for AI-assisted work is one of the most state-divergent areas in the attorney-AI rule set. The dispute is not whether AI work can be billed; it is whether the time saved by AI counts against the lawyer’s bill, against the client’s expense pass-through, or both. ABA Formal Opinion 512 set the federal-baseline rule under Model Rule 1.5: a lawyer cannot bill the client for time the lawyer did not spend, and cannot pass through as an “expense” the cost of in-house tools the firm uses across all matters. North Carolina 2024 Formal Ethics Opinion 1 follows the same line.

Virginia is the principal split. Virginia State Bar Legal Ethics Opinion 1901 (Reasonable Fees and the Use of Generative Artificial Intelligence), approved by the Supreme Court of Virginia on November 24, 2025, expressly departs from ABA Op 512 and NC FEO 1 on this question. LEO 1901 permits value-based fees in Virginia even when AI dramatically reduces the time spent, and attorneys are not required to reduce flat fees solely because AI was used. The opinion restates the verification duty in the same breath: no malpractice safe harbor for fabricated citations, and value-based billing does not relieve the attorney of accuracy obligations. The state tracker records LEO 1901 in full; the contrast with ABA Op 512 is the point.

The cleaner side of the rule is consistent across the opinions that have addressed it. AI-tool subscription costs are firm overhead under ABA Op 512, with North Carolina FEO 1 reading the rule the same way; Virginia LEO 1901 does not depart from ABA Op 512 on subscription treatment. The rule that subscriptions are overhead applies unless the firm has client-specific written consent for an expense pass-through and the actual usage cost can be allocated to the matter. Firms in states that have not yet ruled should consult counsel in their own jurisdiction before relying on the same reading. The informed-consent form and client AI-use notice templates produce the language that holds up under disciplinary review.

For managing partners, the operational rule simplifies to two record-keeping habits regardless of state. Every billable AI workflow needs a contemporaneous time entry that names the verification work, and every passed-through AI cost needs a written client consent. The audit-report and usage-log templates produce the records that close out a discipline question if it ever arises. Where Virginia practitioners gain flexibility under LEO 1901, the documentation expectation stays the same.