Despite widespread optimism about artificial intelligence transforming legal work, new billing data suggests small law firms are actually spending more time per case, not less.
The findings come from 8am’s SMB Law Financial Health Report, drawn from several million bills issued by its MyCase customers between April 2024 and March 2026, covering a broad snapshot of small firm activity.
Hours billed per case rose across nearly every practice area that 8am tracks, climbing between three and seven percent in most categories and a startling 32 percent in bankruptcy law.
The one notable exception was immigration, a practice area that has faced extraordinary disruption as government enforcement actions have complicated client relationships and case continuity.
These figures contrast sharply with the optimism captured in 8am’s 2026 Legal Industry Report, released in March, which surveyed more than 1,300 legal professionals and found many saving six to ten hours per week through AI tools.
That same survey showed the share of legal professionals reporting zero productivity benefit from AI collapsed from 16 percent to just 6 percent, suggesting a confident industry-wide mood that the billing data does not yet reflect.
One possible explanation is that AI adoption remains thinner in practice than survey responses imply, or that the tools are simply not producing the efficiency gains that professionals believe they are delivering.
Before anyone credits AI timekeeping tools for quietly inflating billing entries, 8am checked its own data and found that billed dollars per hour rose from $262 to $274 over the same period, a 4.4 percent increase confirming the extra hours represent genuine billable work.
The growth in billed hours was most concentrated among four-to-five-attorney firms, precisely the segment where AI marketing targeted at solo and small firm practitioners has been loudest and most persistent.
Not every data point is discouraging, however, with one California firm cited as having used AI to reduce a complaint from eight hours of work down to two and a half, cutting costs by 27 percent while improving client satisfaction.
The broader lesson appears to be that AI is not a push-button efficiency multiplier, and lawyers must invest meaningful time and effort before the tools produce consistent, measurable results.
On the collections side, the picture for small firms is considerably brighter, with the share of invoices collected within 30 days climbing from 58 to 63 percent according to the 8am report.
The median firm is now getting paid the same day it sends a bill, a shift that reflects the growing adoption of online payment tools and automated billing mechanisms across small practices.
Firms that activated online payments collect invoices four and a half times faster than those still sending paper statements, and on bills over $5,000, having an autopay plan in place recovers 79 cents on the dollar compared to just 38 cents without one.
The collection picture looks very different at the top of the legal market, where Wells Fargo’s Legal Specialty Group reported first-quarter revenue up more than 13 percent, built almost entirely on rate increases of 11 percent, even as collections slowed by six and a half days.
Receivables have been piling up fastest at firms inside the Am Law 50, a contrast that highlights how differently the economics of large and small law practices are playing out in the current environment.
Small firms catering to individual clients who respond to a simple “Pay Now” button are not exposed to the same circular accounting dynamics affecting firms heavily involved in AI company and data centre work.
The overall picture suggests that while AI holds genuine long-term promise for legal efficiency, the profession has not yet cracked the code for translating that promise into consistent billing outcomes.