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.

Authorities

Official form

Open the official form. Always use the current version from the issuer.

Read the full text

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