Connecticut law and accounting firms are experimenting with new billing models as artificial intelligence reshapes their core business, with some moving to value-based rates to compensate for the hours AI tools are cutting from client work.
For decades, the billable hour has been the revenue generation engine of law and accounting firms. Artificial intelligence is beginning to upend that model.
As AI tools dramatically reduce the time needed for legal research, tax strategy and document review, Connecticut professional services firms are rethinking how they charge clients.
If AI can complete in minutes work that once took hours, what should clients be paying for? Firms say that question is no longer theoretical.
“At our firm, like lots of other firms, we can’t ignore the inevitable challenges that AI could pose to revenue models,” said Peter Zarella, a partner at law firm McCarter & English, which employs about 400 attorneys across nine offices, including two in Connecticut. “Where you’re billing by the hour and there’s a tool out there that can make things take less time, that certainly has implications as to whether you’re going to be able to maintain the same level of revenue and profitability.”
MahoneySabol, a Glastonbury-based accounting and advisory firm, began charging premium billing rates in early 2026 for work performed using AI-powered research systems.
The change reflects the value of the work rather than the time consumed, said Michael Sabol, co-founder of the 70-person firm.
Research tasks that once took 90 minutes can now take 15, he said.
“We have a different rate when we’re using those AI tools,” Sabol said. “Just because it took us less time doesn’t mean it’s not as valuable as it was when it took us an hour-and-a-half to research it. If we are purely just charging on the time we spent, I think we’re underpricing the value of what we’re doing.”
Drew AndrewsDrew Andrews, managing partner and CEO of Hartford-based accounting firm Whittlesey, said AI recently shaved as much as 10 hours off the creation of a complex tax strategy for a client.
“It took probably a couple hours because of the way we were tooling it, and prompting it,” Andrews said.
The technological leap will allow firms to complete more work in fewer hours, Andrews said, but he doesn’t expect it will necessarily reduce staffing.
Instead, it could ease the constant pressure to hire by allowing firms to expand their client base without adding as many employees as traditionally would be required.
Andrews said it has not yet been demonstrated that AI will lead to lower bills for clients, particularly because firms are incurring new technology expenses. Whittlesey spends about $30,000 annually on AI products, he said.
“You’re going to replace personnel costs with technology costs,” he added.
New expectations
Law firms are confronting similar questions.
Zarella, of McCarter & English, said some clients — particularly those using AI in their own businesses — now expect law firms to use the technology where appropriate and pass along at least some of the resulting efficiencies.
“As clients (become) educated on the tools and what they’re capable of and how reliable they are, I think they’ll set their expectations accordingly, and some have started to do that,” Zarella said.
Some clients are increasingly reluctant to pay for deposition summaries and document review — work historically handled by junior attorneys, paralegals or contract staff, he said.
Lee Hoffman
At Connecticut law firm Pullman & Comley, Chair Lee Hoffman said similar conversations are emerging.
“It’s the clients who have adopted AI tools on their own and see the benefits who have said: ‘You should really be using this,’” Hoffman said.
Still, hourly billing remains dominant.
Hoffman noted that the billable hour itself is a relatively recent development in legal history, taking hold largely in the 1970s and 1980s as corporations demanded more detailed accounting of legal costs.
“Fast-forward to now and I think that you’re going to have the same thing in reverse,” Hoffman said, adding that the shift to new billing models will be driven by the demands of clients and the marketplace.
But AI adoption in legal practice remains complicated.
Pullman & Comley has spent the past two years working to integrate AI while addressing concerns about security, accuracy and client confidentiality, Hoffman said.
The firm has hired outside vendors to train attorneys ahead of broader adoption, and has spent the past six months monitoring AI use internally to ensure staff understand how to use the technology effectively.
Companies that fail to adopt AI risk falling behind competitors that do, Hoffman said.
Gradual changes
There are still thorny issues that could slow adoption.
For example, Hoffman said some argue that using certain third-party AI applications — such as note-taking tools — could jeopardize attorney-client privilege by introducing an outside party into confidential communications.
J. Michael WirvinJ. Michael Wirvin, managing partner at law firm Robinson+Cole, said many clients who opposed having their information processed through AI just 18 months ago are now expecting firms to capture efficiencies from the technology.
That shift has prompted serious internal discussions about pricing, though no changes have yet been implemented, he said.
Wirvin expects billing changes to emerge gradually at first, then accelerate as the technology improves and becomes more widely adopted.
Still, few industry leaders expect the billable hour to disappear entirely.
Litigation, in particular, is likely to remain heavily tied to hourly billing because courtroom strategy, negotiations and trial preparation depend on human judgment and involve unpredictable workloads, law firm leaders said.
“The legal industry as a whole is sort of focusing on elevating the role of human judgment,” Zarella said. “That still remains critical.”
