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Fresh Perspectives: The Price of Anticipated Efficiency – Is AI About to Change Pricing in International Arbitration?
Mirella Janett, Walder Wyss
In the past, international arbitration has largely relied on hourly billing. As AI tools increasingly reshape time-consuming tasks such as document review, legal research and submission drafting, the question arises whether the traditional economics of hourly fees still apply. If tasks that once required dozens of associate hours could now be completed in a fraction of the time, can clients simply expect to pay for fewer hours? Or will AI-driven efficiency expectations accelerate a broader shift toward fixed fees, value-based pricing and outcome-oriented fee structures? Market data already points in this direction. The 2026 Ready Future Lawyer Report by Kluwer finds that “62% of legal departments believe that AI-driven efficiencies will significantly reduce the prevalence of the billable hour, paving the way for alternative pricing models and greater cost transparency”.
Leading AI specialists including in-house counsel, arbitration practitioners and legal tech providers share their perspectives on how anticipated AI efficiency gains should be taken into account in the pricing of counsel services in the field of arbitration.
“I would gently push back on the framing. The interesting shift is not that AI lets clients pay for fewer hours, it is that AI makes aspects of arbitration work predictable. The billable hour endures because it shifts the risk of unpredictable complexity onto the client. That risk is what AI starts to dissolve for definable tasks: document review, first-pass research, chronology building. Once a firm can predict what those phases actually cost to deliver, fixed and phased fees become easier to offer, not harder. Routine, repeatable stages move to fixed or capped pricing; genuinely complex, high-stakes advocacy before a tribunal stays hourly, where time really is the best proxy for value. Consequently, I do not think the hourly rate is going away, it will simply stop being the default answer for all aspects of a case.”
Filip Nordlund, Legal Engineering Manager and Practice Lead for International Arbitration at Legora
“The discussion on whether hourly economics still apply is conducted almost exclusively in terms of efficiency. Where AI genuinely accelerates review, research and first drafts, fewer hours are billed today, and phase-based fees for predictable workstreams are a likely next step. But such tasks are not yet done in “a fraction of the time”: AI cannot reliably test its own output against the theory of the case, and any lawyer using it sees the need to verify and rework daily. Efficiency is also not the whole story. AI raises the ceiling of legal work, mapping reasoning patterns, stress-testing tribunal dynamics, building argumentative lines previously impossible at scale, and opens a new tier of services. Arbitration then adds another feature: a tribunal ruling on whether costs were reasonable. As AI makes the cost of standardisable work visible, fees may divide, fixed for predictable phases, hourly for the rest.”Roxana Sharifi, Senior Associate and Lead Innovation & Legal Tech, CMS Switzerland
“The uncomfortable truth is that the billable hour is not merely how firms charge but the operating system on which compensation, promotion and performance all run – which is precisely why AI adoption inside firms remains a challenge: every hour an associate saves is an hour lost on the metric that governs their career. The way out is only a better-aligned model: a well-designed fixed fee lets firms keep the upside of working efficiently, frees lawyers to focus on judgment and strategy rather than logged hours, and gives clients the cost transparency they are asking for – turning AI’s efficiency gains into a shared benefit rather than a source of tension.”
Michael Burkart, Legal & Digital Transformation Executive at SGS
These insightful perspectives illustrate that the discussion is much more nuanced than a simple choice between lower legal fees and the demise of the billable hour. It will be interesting to see whether the suggested hybrid approach becomes the new standard, with more predictable work increasingly priced on a fixed or phased basis and complex strategic work continuing to justify more traditional fee arrangements. At the same time, the discussion underscores that the debate should be viewed in a broader context. Impactful changes may also be driven by the emergence of new forms of legal services and by evolving incentive structures within law firms.