Law firms collectively lose millions of dollars annually due to unbilled hours arising from internal productivity challenges, according to a recent report from the Thomson Reuters Institute. These lost hours represent significant opportunity costs across the legal industry.
The report highlights key productivity drains, including time spent on legal research, revising associate-generated work, and transitioning cases between attorneys. Firms often choose not to bill these hours to maintain strong client relationships and avoid billing disputes, resulting in considerable unrealized revenue.
Generative AI (GenAI) is presented as a solution to these hidden productivity losses. Rather than reducing billable hours, GenAI acts as a strategic tool enabling law firms to maximize productivity, turning previously lost hours into billable, productive work without increasing client expenditures. The report suggests GenAI could significantly reduce time spent on legal research—up to 50%—and decrease partner review time of associate work by approximately 40%, substantially enhancing efficiency.
The implementation of GenAI in law firms promises to improve profitability, streamline billing practices, and deliver clearer, faster, and higher-quality legal services to clients.
Published April 16, 2025.
