Bench & Bar May/June 2026

FEATURE: ARTIFICIAL INTELLIGENCE

WHAT IS A REASONABLE FEE? THE OBSOLESCENCE OF RULE 1.5 IN THE AGE OF AI 1

BY SHELDON G. GILMAN

F or decades, advances in legal tech nology evolved incrementally – from typewriters, to word processors, from law books to online research systems – steadily improving efficiency without dis rupting the fundamental assumption that legal services are the product of human labor, expertise, and time. None of these advances changed the essence of the lawyer’s essential role to devote time to retrieve, ana lyze, and present a pleading or document that was created by humans for humans. Rule 1.5 was drafted within the paradigm that more time equals more value equals a greater fee. Generative AI (AI) is a technological advance disrupting this foundational assumption as AI represents one of the greatest advances in history. 2 When prompted, AI produces original text, sug gests legal reasoning, analyzes documents, and participates in drafting in ways that resemble collaboration rather than clerical assistance. Lawyers now interact with AI as a cognitive partner, not a passive instru ment. Hence, AI raises issues of authorship, (who is responsible for the text), verifica tion (how the lawyer confirms accuracy and

THE ECONOMIC ABSURDITY OF PUNISHING A LAWYER’S EFFICIENCY In an AI-enabled practice, time expended may be minimal, even when the quality or sophistication of the output is exceptional. A lawyer who uses AI to analyze a lengthy contract in seconds or drafts a research memorandum in minutes, then verifies the content using years of training and experi ence, still provides a highly valuable service. Yet, under the current hourly framework, the lawyer remains bound by an antiquated system and is penalized financially. Rule 1.5 does not recognize the skills lawyers must develop to frame issues in ways AI systems can answer, avoid misleading outputs, and integrate the specialized AI tools into a coherent response. Rule 1.5, as structured, undervalues results and disincentivizes technological efficiency as it does not recog nize the lawyer’s additional responsibilities to recognize hallucinations, verify the detail of legal citations, identify omissions, and know when to override technologi cal suggestions that are no longer viable

authority), and professional responsibility. 3 This paper posits that, because of what AI can and is doing, Rule 1.5 should evolve to reflect a new standard for determining the reasonableness of a lawyer’s fee. THE TIME-AND-LABOR MODEL IS ECONOMICALLY AND ETHICALLY FLAWED Rule 1.5’s assumptions based on a pre-tech nological vision of lawyering have now collapsed because those assumptions no longer reliably measure the value, cost, or professional judgment involved in providing legal services. Specifically, the traditional determinants of a “reasonable fee”—time, labor, novelty, and personal skill—no longer align with how legal services are actually produced with the collaboration of AI. Rule 1.5’s emphasis on time has become econom ically irrational, ethically inconsistent, and technologically obsolete. 4

20 may/june 2026