The enduring presence of the billable hour in the legal industry continues to defy predictions of its decline. According to the 8am SMB Law Billing and Payments Report, recently released by 8am (formerly AffiniPay), legal firms billing exclusively by the hour vastly outnumber those employing flat fees. This finding highlights a trend that contradicts the prevailing narrative expecting a shift towards flat fees due to client demands for predictability.
Analyzing data from over 60,000 predominantly U.S.-based law firms, the report compares billing practices for the first halves of 2026 and 2025. It reveals that 47.7% of these firms billed by the hour exclusively in early 2026, an increase from the previous year. Only 10.3% of firms operated solely on flat fees, with the majority employing a mixed approach that still leaned heavily on hourly billing.
The report further notes that the choice between billing methods typically relates to the nature of legal work rather than shifting business philosophies. For instance, practice areas with predictable scopes, such as traffic or immigration law, have embraced flat fees. However, areas like business, corporate law, and civil litigation show a strong preference for hourly billing.
Beyond billing methods, the report highlights a 5% to 8% growth in monthly billings over the past year without significant changes in hourly rates, suggesting that firms have become more efficient in converting recorded hours into invoiced hours. Payment practices have similarly improved, with more invoices paid promptly and the average unpaid balance decreasing.
Firms are also becoming more strategic about payment acceptance costs, with a rise in those applying surcharges to card payments. Additionally, larger payments are increasingly processed via e-checks to mitigate the expense of percentage-based card fees.
While the report centers on 8am’s user base, which predominantly includes smaller firms, it underscores the resilience of the billable hour, aligning with findings from other industry surveys. This suggests that, at least for now, the billable hour remains a steadfast model in the legal sector, contrary to recurring forecasts of its obsolescence.