News & Updates
Aaron Osborne Joins LMICK’s Board of Directors
Lawyers Mutual would like to welcome Aaron Osborne as its newest member to its Board of Directors as the KBA’s Young Lawyers Division representative. Aaron Osborne is an associate at O'Hara, Taylor, Sloan, Cassidy, Beck PLLC. Aaron graduated from NKU’s Salmon P. Chase College of Law in 2024 and was licensed in Kentucky the same year.
Aaron is also now licensed in Indiana, Ohio, the US District Courts for the Western District of Kentucky, Eastern District of Kentucky, Southern District of Indiana, and the Sixth Circuit Court of Appeals. Originally from Eddyville, KY, Aaron earned a Bachelor of Science in Chemistry from Murray State University in 2016 and worked as a chemist in Louisville for five years before pursuing a legal career. Aaron is currently the Sixth District Representative for the Kentucky Bar Association’s Young Lawyer Division Executive Counsel. Personal interests include running, mountain biking, golf, kayaking, rock climbing, Cincinnati sports, live music, surfing, other outdoor activities, and houseplants. Welcome, Aaron!
KBA’s January AI Webinar Series Available On-Demand
- If you missed the KBA’s January AI webinar series, you can now watch all four sessions on-demand via InReach which is free for KBA members! Topics that are included are:
- Making AI Work for You – When and How to Use It (1 Ethics Credit)
From Drafting to Done (1 Ethics Credit) - AI Tools for Litigators (1 CLE Credit)
- Navigating the Latest AI Developments & Practical Applications (1 Ethics Credit)
- Get practical, real-world strategies to integrate AI into your practice – on your schedule! Visit the KBA's website for additional information.
Practice Management
Artificial Intelligence and the Future of Legal Billing
Hinshaw Law in Chicago, Illinois recently held their annual Legal Malpractice and Risk Management Conference in Chicago. One of the sessions was led by a panel of professionals who discussed the intermingling of artificial intelligence (AI) and legal fees and billing. The rapid adoption of AI within the legal profession is beginning to reshape many aspects of law firm practice, including one of the profession’s most entrenched traditions—the billable hour. As generative AI tools become more capable of performing tasks such as document review, legal research, drafting correspondence, and preparing initial pleadings in a fraction of the time previously required, law firms are increasingly reexamining how legal services are priced and billed. At the same time, clients are demanding greater pricing transparency and more predictable legal costs. Together, these forces are pushing firms to rethink traditional billing models while remaining compliant with applicable ethical rules.
Recent industry surveys highlight the growing tension between technological efficiency and traditional billing practices. A survey conducted by the legal technology company BigHand found that roughly half of surveyed clients want greater pricing transparency from law firms, while nearly half reported increasing demand for matter budgets and alternative fee arrangements (AFAs). The survey further noted that many clients are moving more quickly than firms in embracing flexible, value-based pricing models. As AI tools make certain legal tasks significantly faster to perform, clients are increasingly questioning the relationship between the time spent and the value delivered.
For decades, the billable hour has been the primary method by which law firms measure productivity and generate revenue. The traditional “leverage” model—where a relatively small number of partners oversee large numbers of associates performing billable work—has long relied on time-intensive tasks such as document review, legal research, and basic drafting. However, generative AI tools can now perform many of these tasks in seconds or minutes rather than hours. As a result, firms face a strategic dilemma: continue billing based on time, which may decrease as technology improves efficiency, or develop alternative billing methods that better reflect the value of the work performed.
Legal commentators have suggested that AI may accelerate the profession’s long-debated shift away from the billable hour. As legal analyst Jordan Furlong has observed, when firms can no longer sell the time it takes to achieve a client’s outcome, they must instead focus on selling the outcome itself and the overall client experience. This shift has the potential to transform how legal services are priced, delivered, and evaluated.
While billing models may evolve, lawyers must remain mindful of their ethical obligations. In Kentucky, attorney fees are governed by Kentucky Rules of Professional Conduct Rule 1.5. SCR 3.130 (1.5). The Rule requires that a lawyer’s fee be reasonable and identifies several factors relevant to determining reasonableness, including the time and labor required, the novelty and difficulty of the issues involved, the skill required to perform the legal service properly, customary fees for similar services, and the results obtained.
When AI is used in the delivery of legal services, these ethical considerations become particularly important. If a task that historically required several hours can now be completed in minutes using AI, lawyers must carefully consider whether billing the same number of hours would be reasonable under Rule 1.5. The answer is an emphatic no. The key ethical principle is that lawyers may bill for the time actually spent performing legal work—including reviewing, editing, and verifying AI-generated content—but they should not bill for time that was never actually incurred. Transparency with clients regarding the use of AI tools may also become increasingly important as the technology becomes more widely integrated into legal workflows.
At the same time, AI may create opportunities for law firms to explore alternative fee structures that better align with client expectations. Flat fees, subscription-based services, success fees, and hybrid billing models may become more common as firms attempt to balance efficiency gains with sustainable revenue models. Predictive analytics and AI-driven billing tools may also help firms estimate the cost of legal matters more accurately, allowing them to offer more precise budgets and pricing structures.
Ultimately, AI does not eliminate a lawyer’s professional responsibilities; rather, it requires lawyers to apply traditional ethical principles to new technological tools. The following checklist provides practical guidance for lawyers who are integrating AI into their practice while ensuring that billing practices remain ethical and compliant with Rule 1.5.
AI Billing and Ethics Checklist for Lawyers
- Disclose the Basis of Fees Early
- Clearly communicate billing arrangements to the client at the outset of representation.
- Consider explaining whether AI tools may be used in performing certain legal tasks.
- Bill Only for Time Actually Spent
- If billing hourly, charge only for the lawyer’s actual time spent reviewing, editing, verifying, or refining AI-generated work product.
- Do not bill for time that would have been spent absent the use of AI.
- Ensure Fees Are Reasonable
- Evaluate whether the fee charged remains reasonable under Kentucky Rule 1.5, particularly if AI significantly reduces the time required to complete a task.
- Maintain Competent Review
- Carefully review and verify all AI-generated content before using it in legal work product.
- Remember that the lawyer—not the technology—remains responsible for the accuracy of the work.
- Consider Alternative Fee Arrangements
- Evaluate whether flat fees, phased billing, or other alternative arrangements may better reflect the value of the legal services provided.
- Consider alternative billing methods that account for tasks done, rather than the time that it takes to do them.
- Protect Confidentiality
- Ensure that any AI tools used comply with confidentiality obligations and do not improperly disclose client information.
- Document Work Performed
- Maintain accurate records of the work actually performed by the lawyer when AI tools are used.
- Supervise the Use of AI
- If staff or junior attorneys use AI tools, ensure proper supervision and review consistent with professional responsibility obligations. (SCR 3.130 (5.1) and (5.3)).
Artificial intelligence is unlikely to eliminate the billable hour overnight, but it is already prompting law firms to reconsider how legal services are valued and delivered. As AI tools continue to improve efficiency, lawyers will need to balance innovation with ethical obligations and client expectations. Firms that proactively address these issues—through transparent billing practices, thoughtful use of technology, and creative pricing models—will be better positioned to adapt to the evolving economics of modern legal practice.
Questions? Contact
Hamilton County Court of Common Pleas AI Local Rule 49
In last month’s LMICK Minute, Issue #65, LMICK discussed and provided examples of both state and federal court orders that deal with how litigants may use AI in those respective courts. Recently, it was brought to LMICK’s attention that the Hamilton County, Ohio, Court of Common Pleas has Local Rule 49- “Use of Artificial Intelligence in Court Submissions”. Since many of LMICK’s insureds practice in Hamilton County, we wanted to share this information and make sure you are aware of the Rule’s existence. The Rule states:
(A) Purpose and Scope
This rule is established to govern the use of artificial intelligence (AI) technologies by attorneys and/or parties in the preparation and submission of materials to the Hamilton County Court of Common Pleas. It aims to ensure the ethical use of AI and maintain the integrity of evidence.
(B) Definitions Artificial Intelligence (AI)
Any technology that uses machine learning, natural language processing, or any other computational mechanism to simulate human intelligence, including document generation, evidence creation or analysis, and legal research. AI-Assisted Material: Any document or evidence prepared with the assistance of AI technologies.
(C) Disclosure of AI Assistance
Attorneys and/or parties must disclose the use of AI-assisted technology in the creation or editing of any document or evidence submitted to the court. Such disclosure should include a general description of the AI technology used and its role in the preparation of the materials. The disclosure must be made at the time of submission through a certification attached to the document or evidence, indicating the type of AI used and certifying the attorney's final review and approval of the AI-assisted material.
(D) Responsibility and Review
Attorneys and/or parties remain ultimately responsible for the accuracy, relevance, and appropriateness of AI-assisted materials submitted to the court. Attorneys and/or parties must thoroughly review all AI-assisted materials to ensure they meet all legal and ethical standards. Use of AI does not absolve attorneys from their duty of competence, diligence, and supervision as required under the Ohio Rules of Professional Conduct.
(E) Sanctions
Violations of this rule may subject an attorney and/or party to sanctions, including but not limited to, Civil Rule 11 and/or Civil Rule 37.
Questions? Contact
FinCEN’s New Residential Real Estate Reporting Rule
Lawyers Mutual Liability Insurance Company of North Carolina recently published an article discussing the Financial Crimes Enforcement Network’s (“FinCEN”) new Residential Real Estate Reporting Rule. This Rule went into effect March 1, 2026, and it significantly expands federal reporting obligations related to certain residential real estate transfers. The rule applies broadly to non-financed transfers of residential real property to legal entities (such as LLCs, corporations, or partnerships) or trusts, with no minimum dollar threshold. Covered property includes single-family homes, townhomes, condominiums, and certain vacant land intended for residential construction. Importantly, the triggering factor is the transfer of residential real property itself, not the attorney’s practice area. As a result, the rule may affect not only real estate attorneys but also estate planning and business lawyers who prepare or record deeds, transfer property into trusts, form entities that take title to residential property, or assist with intra-family or cash transfers.
Under the Rule, a Real Estate Report must be filed electronically through FinCEN’s BSA E-Filing System, generally within 30 days after the closing or transfer. The rule establishes a seven-step “reporting cascade” to determine the Reporting Person responsible for filing the report, which in many cases will be the closing or settlement agent. However, when no settlement agent is involved, the obligation may fall on the individual who prepares or records the deed, meaning attorneys handling deed-only transactions could become the Reporting Person even outside a traditional closing. Although parties may enter into written designation agreements to assign filing responsibilities among those in the cascade, the Reporting Person ultimately remains responsible for compliance. The report requires detailed information about the reporting individual, the property, the transferee entity or trust, beneficial ownership, payment details, and signing individuals.
The rule also presents important risk management considerations for attorneys. Firms that handle residential property transfers—even incidentally—should consider implementing intake procedures to determine whether a transferee is an entity or trust, confirming whether the transaction is financed, determining their position in the reporting cascade before recording a deed, tracking applicable reporting deadlines, and maintaining records for at least five years. Lawyers should also be aware that civil or criminal penalties for non-compliance are regulatory fines that are typically excluded from professional liability coverage. Ultimately, the new FinCEN rule underscores that preparing or recording a deed transferring residential property to an entity or trust in a non-financed transaction may create a federal reporting obligation, making it essential for attorneys in multiple practice areas to review their procedures and ensure compliance.
LMICK highly recommends that you read the full article from Lawyers Mutual of North Carolina to learn more about the new FinCEN Rule to determine if your practice may be impacted. We are including it here with their permission. As previously mentioned, failure to comply with the Rule may lead to fines or penalties against the lawyer. Most malpractice policies, including Lawyers Mutual’s policy, excludes coverage for fines and penalties. However, Lawyers Mutual cannot make any coverage determination until a claim is actually reported. Yet, staying informed on how the Rule operates will ultimately help avoid any potential uncovered claim.
Questions? Contact
Lawyer Well-Being
Spring Forward: Attorney Well-Being as Winter Turns to Spring
March marks a seasonal transition. As winter begins to recede and the first signs of spring emerge, longer days and warmer temperatures provide a natural opportunity for renewal. For attorneys, whose professional lives are often defined by demanding schedules, deadlines, and client pressures, this time of year offers a valuable reminder to refocus on attorney well-being and sustainable professional practices.
The legal profession has long recognized that lawyers face unique stressors. Attorneys routinely manage high expectations of competence, adversarial proceedings, and the responsibility of guiding clients through complex and often stressful situations. Combined with workload demands and the constant pressure to remain responsive, these factors can contribute to fatigue, burnout, and reduced job satisfaction over time. For this reason, attorney well-being is not merely a personal concern—it is closely tied to professional competence and ethical practice. Lawyers who maintain their physical and mental health are better equipped to exercise sound judgment, communicate effectively with clients, and fulfill their professional obligations.
As winter transitions into spring, March provides an ideal opportunity for attorneys to reassess personal habits and routines. The seasonal change naturally encourages individuals to spend more time outdoors, become more physically active, and reconnect with activities that promote balance. Even modest lifestyle adjustments—such as stepping away from the office for brief walks, scheduling time for exercise, or establishing clearer boundaries between work and personal time—can have a meaningful impact on overall well-being.
Physical activity and time spent outdoors can be particularly beneficial for lawyers who spend significant portions of their day sitting at desks, reviewing documents, or appearing in court. Exposure to natural light and fresh air can help improve focus, reduce stress, and support overall mental health. Incorporating outdoor activities into weekly routines can therefore serve as a simple but effective strategy for maintaining balance during busy periods of practice.
Law firms and legal organizations can also play an important role in supporting attorney well-being. Encouraging reasonable workloads, promoting collegiality, and fostering an environment in which lawyers feel comfortable discussing stress and mental health concerns can help build a healthier professional culture. Many bar associations and lawyer assistance programs, including KYLAP, also provide confidential resources to support attorneys who may be experiencing burnout, substance use concerns, or other mental health challenges.
Ultimately, the arrival of spring serves as a reminder that renewal is possible both personally and professionally. By taking small steps to prioritize health and balance, attorneys can strengthen their resilience and maintain the energy necessary to serve clients effectively.
Spring Well-Being Checklist: Simple Outdoor Activities for Attorneys
As March ushers in warmer weather, consider incorporating a few outdoor activities into your routine:
- Take a short walk outside during your lunch break at least a few times each week.
- Schedule walking meetings with colleagues when appropriate.
- Spend time outdoors after work—such as gardening, yard work, or light exercise.
- Visit a local park or trail on the weekend for a hike or bike ride.
- Open office windows when possible to allow fresh air and natural light.
- Plan at least one outdoor activity each week to disconnect from work and recharge.
Small changes in routine can have lasting benefits. As spring approaches, attorneys should view the changing season as an opportunity to reset, reconnect with healthy habits, and continue building a sustainable and fulfilling legal career.
Questions? Contact
Know That Help is Always Available
If you are struggling with grief, sadness, anxiety, or any other emotion or stressor that is negatively impacting your daily life, please reach out for help. All Kentucky lawyers are eligible for four free visits with a mental health professional through the Kentucky Lawyers Assistance Program. For more information about the variety of confidential resources KYLAP offers, please visit www.KYLAP.org.
Upcoming Events
We look forward to seeing you!
We are proud to support the organizations that support you and your work! We will be out and about this spring, leading CLEs and sponsoring events. We hope you can join us at one of these currently scheduled events (and make sure to come say hello)!
March 11-27: KY Legal Food Frenzy
March 26: UK Family Law CLE, Lexington
April 15: KJA Nursing Home, Zoom
April 15: NKBA Small/Solo Section, Zoom
April 17: KJA Ethics Seminar/Races, Frankfort and Lexington
April 22: KJA Workers’ Comp, Zoom
April 22-23: AAML, Louisville
April 24: KJA Business Side of Law, Zoom
April 28: KJA Bad Faith, Zoom
April 28: NKBA AI Series, Covington
April 29-30: UK Equine Law, Lexington
April 30: KJA Rules of Civil Procedure, Zoom
May 6: KJA Ethics, Zoom
May 7: KJA Board Meeting and Award Celebration
May 8: KJA AI, Louisville
May 12: KJA Subrogation, Zoom
May 18: McCracken Co. Bar Association, Paducah
May 27: KJA Mediation, Zoom
May 28: KJA Family Law, Zoom
May 29: KJA Workers’ Comp, TBD
We want to hear from you! Have a CLE topic you would like to see? Send suggestions to
Need a CLE Speaker? We would love to speak to your group! You can check out our updated list of available topics and request to schedule, here.