Should Using AI Mean Lower Fees? Virginia Ethics Committee Weighs In
May 05, 2025
Here is my recent Daily Record column. My past Daily Record articles can be accessed here.
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Should Using AI Mean Lower Fees? Virginia Ethics Committee Weighs In
When legal professionals experiment with new technologies, knee-jerk reactions from ethics committees often follow. Generative artificial intelligence (AI) is no exception. Like the technologies that preceded it, lawyers seeking to use AI in their practices have faced unnecessary restrictions or requirements.
One example is the duty to advise clients of its use, which is included in many ethics opinions on AI. This requirement rears its ugly head whenever technologies are novel, but is ultimately abandoned when they become ubiquitous. This same evolution will occur with AI.
Another common issue that crops up is how to properly and ethically bill clients for legal services when efficiency gains arise from the incorporation of new technologies like AI into legal workflows.
This issue was addressed most recently in March in Proposed Legal Opinion 1901 from the Virginia Bar. The proposed opinion, which was released pending public comment, was devoted to determining the reasonableness of legal fees when generative AI was used to provide legal services.
The opinion was surprisingly nuanced, and the approach was thoughtful and balanced. For starters, The Legal Ethics Committee wisely acknowledged that its conclusions were not limited to AI usage: “Though this opinion is specifically addressing productivity improvements generated through the use of generative AI, its principles may be equally applicable to a lawyer’s use of other technological tools that result in comparable productivity improvements.”
The Committee explained that the time saved from AI efficiency gains does not automatically require lawyers to reduce their fees. Instead, in addition to the actual legal work, the knowledge required to effectively evaluate and apply AI tools has value: “(T)he ‘skill requisite to perform the legal service properly’ might actually increase…The lawyer's judgment in determining when and how to deploy AI tools, and the expertise needed to critically evaluate AI-generated content, represent valuable services for which the lawyer reasonably can be compensated.”
Notably, the Committee disagreed with the conclusion reached in ABA Formal Opinion 512—that “it may be unreasonable under Rule 1.5 for the lawyer to charge the same flat fee when using the GAI tool as when not using it.”
Instead, the Committee determined that the result of AI-driven productivity gains should not effectively penalize lawyers by reducing flat fees. Pursuant to Rule 1.5(b), all legal fees must be reasonable, “but the time spent on a task or the use of certain research or drafting tools should not be read as the preeminent or determinative factor in that analysis.” Lawyers should not be required to forfeit reasonable profit “if clients continue to receive value from the lawyer’s output.”
However, Rule 1.5(b) requires lawyers to adequately explain the cost of legal work, including value-based fees, to clients. According to the Committee, if an AI tool significantly increases efficiency, it may be necessary to offer clients additional context about the legal work provided: “(T)he client may need additional explanation of why the lawyer’s experience, technical skills, or other efficiencies contribute to the value of the services and determination of the fee.”
I agree with the Committee’s approach. Ethics rules shouldn’t reward inefficiency or punish lawyers for using the right tools. If a lawyer’s expertise includes knowing when—and how—to apply AI effectively, that judgment has value. Clients deserve transparency, but efficiency shouldn’t come at the cost of fair compensation.
The Virginia opinion reflects a familiar pattern in legal ethics: New technologies often prompt early overcorrections that fade once the tools become widely accepted. Generative AI is no different, and this opinion moves us closer toward treating it that way.
If you’re a Virginia legal professional, don’t overlook this proposed opinion—it’s thoughtful, relevant, and worth your time. Public comments are open to all through May 7, 2025: [email protected]. This is your chance to be heard if you have strong opinions about these issues.
Nicole Black is a Rochester, New York attorney, author, journalist, and Principal Legal Insight Strategist at MyCase, CASEpeer, Docketwise, and LawPay, practice management and payment processing tools for lawyers (AffiniPay companies). She is the nationally-recognized author of "Cloud Computing for Lawyers" (2012) and co-authors "Social Media for Lawyers: The Next Frontier" (2010), both published by the American Bar Association. She also co-authors "Criminal Law in New York," a Thomson Reuters treatise. She writes regular columns for Above the Law, ABA Journal, and The Daily Record, has authored hundreds of articles for other publications, and regularly speaks at conferences regarding the intersection of law and emerging technologies. She is an ABA Legal Rebel, and is listed on the Fastcase 50 and ABA LTRC Women in Legal Tech. She can be contacted at [email protected].