Stephen Embry’s article Billable Hour Tiers for Associates: Progressive or Lipstick on a Pig? has the diagnosis right:

Bloomberg Law recently reported that the venerable firm Steptoe would allow associates to choose their own billable hour targets. The program will start next year. An associate can choose to bill 2200 hours and receive top pay, or they can opt for 2000 hours and make less, or 1800 hours and make even less. Associates reportedly elect to move to a different tier. Associates are allowed to bill fewer than 1800 hours and have their pay pro-rated accordingly. …

The Steptoe approach is just another disguised way to put lipstick on a pig. Law firms need to take a hard look at their demands and expectations of associates. Instead of demanding and then rewarding unrealistic billable hours, firms should set reasonable expectations and encourage innovation. But as long as the billable hour forms the basis of your business model, that’s not likely to happen.

Can’t argue with that. Gotta part ways with Steve on his thinking about how AI fits into the situation:

And there’s a whole other issue when it comes to AI. Associates should be rewarded for figuring out how to do more in less time using today’s (and tomorrow’s) tools. Yet under the Steptoe approach, the most innovative associates would be penalized. That’s already true in most firms, but recognizing a caste system would provide even fewer incentives than there already are.A better—and hopefully more forward looking–approach would be to encourage innovation and efficiency. The approach does little more than exacerbate the problems with the billable hour model when firms need to be looking at ways to move away.

The current legal billing system is ugly. However, it’s a dream to imagine AI will kill the billable hour model. The system will never change until clients make it clear they will not accept abusive and often unethical billing practices.