This article was original published in the American Bar Association’s Law Practice Magazine: 2026 Finance Edition.
When I speak to attorneys and paralegals about timekeeping, they often tell me it is their least favorite part of the profession. We all know what it is like trying to keep track of time spent on a matter, as we get distracted by phone calls and emails related to different matters. Whether new to the profession or someone with 30 years of experience, we all struggle with tracking time. Fundamentally, though, our profession runs on time. No matter whether we bill by the hour, a flat rate, or a contingency fee, time-tracking is how we learn whether our cases are profitable and where we are efficient. This is why I recommend that all types of lawyers track their time, regardless of how they bill, whether to catch scope creep on a flat-fee matter or to weigh case selection on contingency.
Lost Time Adds Up
Every one of us has lost time. This happens because we fail to contemporaneously track that time. At the end of the day or, worse, the end of the month, we must rebuild our time from memory. We do not want to overbill, so we are conservative and underbill. Fifteen unrecorded minutes a day can run to thousands of dollars a year. The solution is to record time as the work happens, not later. This is easier said than done. Connected to the time problem is the billing issue. If we delay our time, we often delay our bills. A bill sent late often gets paid late. A very late bill surprises clients and upsets them. This makes them less likely to pay without, at the very least, a difficult conversation.
A Quick Look at the Past
How lawyers handle both time tracking and billing has changed a great deal in the last few years. So has what the work can tell us after it is recorded. Once lawyers began billing by the hour, the first step was a legal pad. We wrote down the time as we worked, or we reconstructed it later. Then came computers. We could use Excel or Word, but that did not change the underlying problem of failing to write the time down as we worked. Then came time-tracking software. We still had to remember to start and stop the timer and enter the details. The thin details we often wrote when we reconstructed, such as “Reviewed correspondence,” told a client nothing. Such bare entries frequently cause billing disputes. What correspondence? From whom? Why did it take so long? So, while time-tracking software helped, it did not solve the fundamental problem we have always had, that is, tracking the time and filling in the details as we do the work. Next came a leap forward with passive time-tracking software, which tracks what we do as we work. It was not perfect, though. It tracked only some of what we did, and it could not explain to the client what we were doing. Then came AI.
The AI Wave
As is the case for many areas of legal practice, AI is reshaping time tracking and billing. The newest tools run in the background, watch the work, match it to the client, and generate draft narratives describing it. The attorney reviews and approves rather than reconstructing after the fact. The narratives are more detailed, so clients can better understand what they are paying for.
These tracking and billing tools observe our work in different ways.
One approach integrates with the software the lawyer already uses. The tool connects to software such as email, calendar, word processing, and video calls. It pulls structured information from those systems, identifying how long a meeting took and which client should be billed for it. Billables.ai is one example. It reads what the connected tools report and drafts a narrative from there.
A second approach captures data through monitoring. Ajax is a tool that works this way. It observes the screen and infers work from what it sees. Ajax need not integrate with any specific piece of software, but it must watch everything to track time and draft narratives.
A third approach embeds capture inside a platform that the firm already runs. Clio, for example, has an AI layer that helps with time-tracking and billing. If a firm uses Clio and subscribes to the AI, the system suggests entries based on the work already recorded within Clio. The capture tool is not a separate product but a feature of the application they work in every day.
The benefit of these tools is that they handle the immediate tracking of time and help provide more detailed explanations. They each recover time that used to vanish. Vendors report gains in captured time in the range of 10 to 30 percent. Bills can also go out much faster. A client who receives a bill right after a big win is far more likely to pay it quickly than one who has had to wait months. The percentages, of course, come from the vendors themselves, so firms should do their own due diligence to confirm the tools do what they claim. Whatever the figures, the time we now lose to reconstruction can be recovered through programs like these.
From Tracking to Insight
Some tools are taking the next step and adding data analysis. Time tracking earns its keep at billing, but the same data can tell us which kinds of cases bring in the most money and which ones we assumed were profitable are not. AiON, a tool I discovered by speaking with its founder, is one upcoming example. Built for solo and small firms, AiON will integrate with Clio and turn a firm’s time and billing data into information that supports decisions based on evidence rather than gut instinct. myFirmData does something comparable with Clio data for firms of any size. The practice management platforms are building time and billing data analytics as well. Clio and Smokeball both offer reporting that breaks down profitability by matter type, attorney, and client. Larger firms have heavier options, such as BigHand Impact Analytics and Clocktimizer, now Foundation Scoping, which mine billing data to adjust pricing and flag unprofitable work. When I spoke with Billables.ai, I was told they plan to add this kind of analysis. Given the increasing number of analytics tools in general and billing analytics tools in particular, this is clearly where the market is heading.
AI Billing Software Carries Real Risks
Remember that whenever you use generative AI (GAI), the attorney is responsible for the results. Billing applications built on GAI will have hallucination issues because all GAI hallucinates. This means the tool can make up data. Check how the time tracking works and what the tool does to prevent false or inaccurate entries. Review every narrative the AI creates and confirm it is accurate. And confirm where the data travel and where they are stored, for the sake of client confidentiality.
Passive capture also can lead a lawyer to bill for work she would otherwise have let go. Would you normally bill each 30-second email at a six-minute minimum, or do you group emails through the day? Review and adjust the bill so that it stays reasonable.
The risks of generative AI are no reason to avoid it, only a reason to use it properly. The same is true here. There is no reason to fear this new kind of tracking and billing software, and every reason to use it as what it is: a tool. Take advantage of what it does well and stay alert to what it does not.
Questions to Ask a Vendor
Before you buy, ask
- Does it integrate with the software my firm already uses?
- Was this built on top of other AIs? If yes, which ones? Are you using the enterprise version?
- Where are my data stored, and who can see them?
- Can I review, edit, and override every entry, and is there an audit trail of what the AI did?
- Can I run a pilot and measure the return before I commit?
- How is it priced, and does the cost scale as my firm grows?