In the ever-evolving landscape of legal services, the traditional billable hour has long been a cornerstone of law firm billing practices. However, a recent survey conducted by BigHand in their 2026 Finance Report suggests a significant shift may be underway. The survey, which gathered insights from over 800 senior finance and legal professionals across large law firms, revealed an increasing demand for alternative fee arrangements (AFAs) by clients.

Alternative fee arrangements, which can include fixed fees, contingency fees, and other non-hourly billing methods, are being sought after more frequently as clients seek more predictable and transparent billing methods. This shift is driven by a growing dissatisfaction with the unpredictability and perceived inefficiency of the billable hour model.

Eric Wangler, BigHand’s Global Legal Market President, comments on the trend, noting that while the demand for AFAs is clearly rising, the actual implementation of these billing models is what will truly define the future landscape of legal billing. "Which remains to be seen is, are although they’re being requested more often, are they actually being deployed more often. As firms become more efficient, start using AI more effectively, the pressure on them to pass those efficiency savings on to their clients will definitely be there," says Wangler.

The survey’s findings highlight a critical juncture for law firms. As technology, particularly artificial intelligence, continues to streamline operations and reduce the manpower needed for many legal tasks, firms are under increasing pressure to justify their fees and adapt to more client-friendly billing practices.

The implications of this shift could be profound, not only for how law firms structure their billing but also for how they manage their internal operations and strategic planning. Law firms may need to invest more in technology and training, reevaluate their pricing strategies, and reconsider how they deliver value to their clients.

As the legal industry stands at this crossroads, the future of the billable hour remains uncertain. With client demands at the forefront, law firms might need to adapt swiftly or risk being left behind in a competitive and rapidly changing market. The ongoing dialogue between law firms and their clients about billing practices will be crucial in shaping the evolution of legal services delivery in the years to come.