Earlier this year, we introduced a practice at TalkCounsel: including AI Efficiency Gain (AEG) on our invoices.
The reasoning was straightforward. If AI helps us save time delivering legal services, our clients should share in those savings. Making a process more efficient should create value for the business paying for the work, as well as for the provider doing it.
It has worked well for us. More importantly, it gives practical expression to a question every business buying legal services should ask: How does your use of AI benefit my business?
A faster internal workflow is useful. A client who can see how that improvement affects their bill has something more tangible.
What AI Efficiency Gain means at TalkCounsel
AI Efficiency Gain is the term we use at TalkCounsel to make the client’s share of AI-enabled efficiency visible in our billing.
The underlying idea connects three things: the legal work being delivered, the efficiency AI helps create, and the financial benefit passed to the client. An invoice becomes a place to explain that connection.
AEG is our billing practice, rather than an established industry accounting standard. The name matters less than the discipline behind it. A provider should be able to explain what became more efficient, how the client benefited, and why the resulting fee remains appropriate for the work.
That is a more useful conversation than simply announcing that a legal team uses AI.
Why the invoice belongs in the AI conversation
Businesses hire lawyers to help them make decisions, protect commercial relationships, and move transactions forward. They also need to manage costs.
Consider a founder negotiating a customer contract. The founder wants advice on liability, payment terms, intellectual property, and termination rights. If technology helps the legal team organize the agreement and prepare an initial issues list more efficiently, the founder has a reasonable commercial question: who benefits?
Some of it may support the provider’s investment in technology and better service delivery. Some may appear as faster turnaround. Our position is that the client should also share in the savings when AI creates them.
Including AEG on an invoice makes that position concrete. It creates an opportunity to explain the value delivered in language a founder, finance lead, or procurement team can understand.
Measuring a gain requires an honest comparison
AEG’s credibility depends on the comparison behind it.
An AI tool producing a draft in two minutes does not establish that the legal assignment took two minutes. The full workflow may include understanding the instructions, preparing inputs, reviewing the output, checking sources, correcting errors, and advising the client.
For providers adopting a similar practice, we recommend measuring efficiency across the completed assignment. Compare work of similar scope and complexity, including the professional review needed to reach an acceptable standard.
A useful starting calculation is:
Estimated net time saved = credible baseline time for comparable work − actual time spent completing and reviewing the AI-assisted work.
The baseline needs support, such as records from comparable matters. Because the same assignment is rarely completed twice under identical conditions, an estimate should be identified as an estimate.
Attribution matters, too. A familiar contract, better client instructions, or a well-developed template may explain part of a time saving. Crediting every improvement to AI would overstate its contribution. Where the evidence does not support a numerical claim, a provider should avoid manufacturing precision.
The client’s financial benefit is a separate calculation. Saving 30% of the time does not automatically mean reducing the fee by 30%. Pricing also reflects the agreed scope, responsibility, expertise, and delivery costs. The relationship between efficiency and benefit should be clear.
What AEG can look like on an invoice
For a flat-fee matter, a separately disclosed efficiency credit is one way to show the benefit.
The following is an illustration of presentation, not a TalkCounsel client invoice, rate quotation, or statement of measured savings:
| Invoice item | Illustrative amount |
|---|---|
| Agreed fee for a defined contract review, before AEG credit | $1,500 |
| AI Efficiency Gain credit | −$300 |
| Professional fee payable | $1,200 |
Here, the client receives a $300 reduction against the stated fee for the same scope. That establishes the credit amount. Supporting the claim that it reflects AI efficiency still requires a defensible explanation of how the work became more efficient.
The starting fee must be genuine. Inflating a reference price to advertise a larger saving would undermine AEG’s purpose. Equally, an efficiency benefit already incorporated into the agreed price should not be counted again as an additional saving.
No universal percentage works for every matter. A routine document review and a complex negotiation involve different work, risks, and opportunities for efficiency.
Hourly billing and flat fees need different treatment
AEG must fit the underlying fee arrangement.
For hourly work, the American Bar Association’s Formal Opinion 512 explains that lawyers must bill for the time actually spent, including appropriate review of AI output. A lawyer cannot bill hours that AI eliminated. For flat fees, the opinion applies the reasonableness requirement and cautions that substantial AI-driven time reductions may make an unchanged fee unreasonable. The opinion interprets ABA Model Rules; applicable jurisdictional rules govern individual engagements.
For an hourly invoice, any comparison with estimated time without AI should therefore be clearly informational. It should never appear as hours worked. Do not present charging only actual time as a discretionary concession.
With a flat fee, the parties can agree how an efficiency benefit will be reflected in the price or shown as a credit. Clear engagement terms make that explanation easier and avoid surprises when the invoice arrives.
Professional review belongs inside the efficiency calculation
An efficiency claim is only meaningful if the work meets the required standard.
AI output can contain confident errors. A 2024 study of AI legal research tools found that the systems tested still produced hallucinations despite using retrieval techniques intended to improve reliability. Those findings concern the tools and versions evaluated; they nevertheless demonstrate why fluency alone is insufficient evidence of accuracy.
In commercial work, a clause may read smoothly while allocating risk in a way the client would never knowingly accept. Someone still has to understand the business, assess the exposure, and decide what to recommend.
AEG should account for the time needed to do that work properly. If checking and correcting an AI draft consumes the initial time saving, there may be no net efficiency gain to claim.
Responsible implementation also requires attention to client information. Tool selection, data handling, and any necessary disclosure or consent belong in the workflow. The ABA opinion addresses competence, confidentiality, communication, and supervision alongside fees.
A lower bill is valuable when the client can keep relying on the work delivered.
A practical starting point for other providers
Providers interested in AEG can begin with a recurring assignment whose scope is easy to define. Contract reviews against an established playbook may offer a more useful starting point than an unusually complex transaction.
Establish a credible comparison, document the full delivery effort, and decide how the supported efficiency gain will benefit the client. Explain the arrangement before billing. Then review whether the invoice reflects it accurately.
Keep the initial approach simple enough to explain in a few sentences. An elaborate savings model that the client cannot understand will do little to build confidence.
Businesses evaluating providers can ask equally direct questions: Where does AI assist the work? Who reviews the result? How does efficiency affect the fee? What supports the savings shown?
These questions help turn a broad technology claim into a discussion about service quality and commercial value.
The standard TalkCounsel wants to encourage
We introduced AEG because we believe clients should see the economics of better technology.
Legal providers need room to invest in their people, systems, and expertise. Clients deserve to understand how those investments improve the service they receive and the price they pay. A sustainable approach can serve both interests.
Our experience with AEG has been positive, and we encourage other providers to consider it. Start with a credible efficiency improvement. Decide how the client will share in the benefit. Make that benefit clear.
If AI helps us save time, our clients should share in those savings. The invoice is a practical place to demonstrate that commitment.
To discuss commercial legal support and how AI-enabled efficiency can be reflected in your engagement, visit TalkCounsel.
