Clause · Costs, billing & litigation funding
Engagement and costs agreement clauses: AI use, client consent and charging for AI-assisted work
Clauses for engagement letters and costs agreements that tell the client how the firm uses AI, record consent or restrictions, and state how AI-assisted work and tool costs are charged.
- Kind
- Clause. Wording to drop into a longer document.
- Where it applies
- New South Wales, Victoria, Western Australia, Australia, New Zealand, United Kingdom (England and Wales), United States
- AI use
- Yellow AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at
- 17 October 2026
- Status
- Maintained. Checked on 17 October 2026 against the 8 authorities it cites, for 7 jurisdictions.
- Version
- 1
- Source
- Written for this library
When to use it
Insert into the engagement letter or costs agreement for every new matter where approved AI tools may be used. Pick one charging alternative. If the client prohibits AI use, record that instead and update the estimate.
How AI may be used
AI can tailor these clauses to the firm's actual tools and the matter, but the clauses must describe what the firm really does. A lawyer confirms the tool list, the charging alternative and any client restriction.
AI may
- Fill the tool list and data-location details from the approved AI tools register.
- Check the clauses for consistency with the costs disclosure and estimate in the same letter.
- Produce a plain-English summary for the client covering letter.
AI must not
- Must not describe tools, safeguards or data locations the firm has not verified.
- Must not insert a charge for time saved by AI or a "technology fee" not disclosed in the estimate.
- Must not remove the client's right to restrict or refuse AI use.
The lawyer checks
- The tools named are on the register and approved for this client's data.
- The chosen charging alternative matches the billing policy and the estimate.
- Any client outside counsel guidelines on AI are reflected and diarised.
Method: how the Green, Yellow and Red levels are decided. This is guidance for planning, not legal advice.
Official form
Open the official form. Always use the current version from the issuer.
Read the full text
The full text is for signed-in accounts. It is free. When you sign in you can:
- read the whole precedent, with its drafting notes beside it;
- copy it, or download it as a Word file or Markdown;
- add it to your firm’s knowledge base, so colleagues can find it;
- let the AI tools you connect read it from that knowledge base.
The summary, the law it rests on and the AI-use guidance above stay public. Privacy.
More in Costs, billing & litigation funding
- Uniform Law standard costs disclosure form (matters likely to cost $750 to $3,000): completion guide
- Costs disclosure and costs agreement letter (Uniform Law ss 174 and 180)
- Billing and time-recording policy for AI-assisted work
- Notice to client of a significant change in legal costs (Uniform Law s 174(1)(b))
- Litigation funding agreement review checklist (including class actions)
All precedents for Costs, billing & litigation funding · Tasks and AI use in this area