Standard hourly billing means lawyers make less money the faster they work. AI speeds up the process, so why haven’t client bills come down? Photo: John Lomnicki.
“It’s a pretty big middle finger to your client, in terms of providing value.”
Strong words from AQMN co-founder and long-time commercial lawyer, Matthew Bautz, but they’re not unfounded.
Legal and consulting firms throughout Australia and the world are using AI to improve efficiency and reduce overheads. This is old news by now – for Matthew, the issue lies in a widespread failure by firms to pass those savings on to their clients.
International legal talent platform Axiom surveyed 528 legal leaders across six countries in March 2026. Of the 79 per cent that use AI, only 6 per cent charge less for AI-assisted work, while 34 per cent actually charge more.
“When costs fall, but invoices don’t, the client receives no extra value. That is not a position you can defend for long,” Matthew says.
“Firm profitability and AI adoption are both at record levels, which tells us most of the industry’s efficiency gain is being kept rather than shared.”
This so-called middle finger prompted AQMN to shift away from traditional billing. Instead, clients engage the team through an ongoing retainer fee, which grants full access to the firm for any task that falls within a predetermined cost agreement.
“We changed the incentive for our people so now everyone is focused on speed and accuracy,” Matthew says.
“Clients get a secure portal for all comms and documents, live tracking for every active task, and they can pick up the phone whenever they need to without worrying about racking up their bill.
“Aside from the moral standpoint, we’re big believers that more value equals more clients. Hourly billing also sucks. I hate recording every minute of my day.”
The results speak for themselves: better client engagement, stronger relationships and a 100 per cent retention rate. In the 18 months since AQMN first trialled their retainer-based work, not one client has moved back to hourly billing or left the firm.
The new model has been so popular, AQMN no longer accepts work that isn’t retainer-based. Photo: John Lomnicki.
Like many firms, AQMN only used AI for internal purposes early on. Then local cybersecurity and technology firm Bluerydge stepped in to help set them up for client work.
“Bluerydge spent six months assessing our systems and AI use, ensuring robust data security and teaching us how to get the most out of AI through better prompting, context, internal automations and settings management,” Matthew says.
“Most organisations using AI are only getting 30 to 40 per cent of its true value because they aren’t trained on proper use. We now provide our clients with more support, faster, and for less than the traditional billable model.”
Matthew and his team believe that complete transparency should underpin AI-assisted work, including which material can and can’t be touched by an AI model.
Before a client signs, AQMN establishes how comfortable they are with each AI platform used, at what level, and for which tasks. There are three tiers to consider: full AI use, AI use subject to amendments and absolutely no AI use allowed.
Sensitive material for government and defence clients is excluded outright.
Matthew says the value comparison between hourly billing and the new retainer model remains night and day. But if it works so well, why aren’t more firms following suit? In short, he says it’s all about profit.
“Some people care more about making money than providing value. If demand is strong and clients aren’t pushing back, there’s no incentive for these people to change.
“Look at reports on the big four firms. Staff are being made redundant, bills for their clients haven’t dropped, yet partner profit is up.
“That might work in the short term, but eventually clients will demand to know what they’re actually paying for. When that question arrives, they’ll move to a group they feel they can trust.”
For more information, visit AQMN.