Lawyers prohibited from billing clients for AI 'saved' time: new rules in a US state
In the US, the Alabama State Bar has stated that lawyers using artificial intelligence cannot bill clients for hours saved due to the technology. At the same time, they may bill for time spent reviewing, correcting, and applying their own professional judgment to AI-generated work, Reuters reports.
The new guidelines come amid increasing efforts by state courts and bar associations to develop rules and best practices regarding the use of new technology.
The Alabama State Bar’s recommendations note that generative artificial intelligence does not create new ethical duties for lawyers but transfers existing requirements, including confidentiality and reasonableness of fees, into a new context.
"As emphasized by the American Bar Association, lawyers remain fully responsible for work performed on behalf of clients, regardless of whether AI tools were used in its creation," the State Bar stated.
The recommendations also specify that lawyers must independently verify all legal citations generated by AI using a "comparable authoritative legal database" before submitting documents to the court.
Instances of improper AI use have already become widespread in state and federal courts in the US. Last year, a federal judge in Alabama sanctioned a partner at the law firm Butler Snow for fabricated citations in two court documents. In April, the Alabama Supreme Court rejected an appeal and sanctioned an attorney after finding that he submitted documents citing non-existent cases generated by AI.
The State Bar also warned that inputting client information into AI systems may pose risks to attorney-client privilege, which courts have not yet uniformly regulated. Consequently, lawyers are advised to use corporate or closed AI systems rather than free platform versions that may have weaker data protection.
Regarding billing and fees, the Bar noted that lawyers may bill for time spent reviewing, correcting, and applying professional judgment to AI-generated results. However, they cannot bill for time that would have been spent if such technology did not exist. The recommendations emphasize: "Efficiency does not justify inflated bills."
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