8am Report Shows Hourly Billing Still Leads Smaller Firms

Hourly-only billing covered 47.7% of the more than 60,000 law firms in 8am’s new report, versus 10.3% billing exclusively on flat fees. The 8am SMB Law Billing and Payments Report, released by the company formerly known as AffiniPay, compares the first half of 2026 with the first half of 2025.

It draws aggregate billing and payment data from predominantly U.S. firms using 8am’s MyCase practice-management system or LawPay payments platform. The company plans to publish the report twice yearly.

Firm size means employee count: solo (one), small (two to five), medium (six to 10), and large (11 or more). Counts come from firm reports or platform user data. The report gives no category breakdown for the 60,000 firms.

What does the billing data show?

A flat fee fixes the price for defined work; hourly billing charges for recorded time. “For most of the past decade, the legal industry has been predicting a shift away from the billable hour, because clients want predictability,” the report says. “The data showed firms making a different choice.”

Hourly-only firms rose from 46.6% a year earlier; flat-only firms rose from 9.7%. The remaining 42% mixed models, but used flat fees on no more than one-quarter of invoices. By invoice, flat fees fell from 16% to 15% of all bills. Large firms cut their share from about 16% to 14%; solo firms rose to 17%.

Tanya Hendricks, chief product officer at 8am, said most SMB firms had not moved toward flat fees despite the industry narrative. She warned against consequential billing decisions made without benchmarks.

What drives flat-fee use?

Practice type, not preference, drives the model, the report says. Traffic firms sent 87.7% of invoices on flat fees; immigration firms sent 64%. Bankruptcy and criminal-defense firms each sent about half. Business and corporate firms used 10%, civil litigation 6.7%, family law 2.8%, and workers’ compensation 0.8%.

Immigration remained a flat-fee stronghold but fell more than four percentage points, from 68.4% to 64%. The report advises a fixed price only when a matter is predictable and bounded; hourly billing otherwise protects the firm. A traffic citation offers the clearest comparison to a fixed-price errand: the work is routine and bounded.

For practitioners, the choice is matter-specific, not a firmwide conversion project. Predictable files can support fixed fees; changing matters favor hourly billing. Before repricing, examine realization—the share of recorded time converted into invoices—and payment performance.

Did rates drive higher billings?

Monthly billings grew 5% to 8% year over year. Hourly rates stayed unchanged at three of four tracked sizes; only medium firms raised them, by 4.3%. The report attributes most growth to realization, meaning more recorded time reached invoices.

Large firms billed nearly 12% more hours while logging slightly fewer, lifting the billed share of recorded time from 44% to 49%. Earnings per billed hour rose 3% to 5% across all sizes.

Solo firms recorded nearly 9% more hours, but their billed share slipped from 70% to 69%. The report’s advice: assess tracked time invoiced before raising rates.

Are payments improving?

Every month in the first half of 2026 beat the same month in 2025 across all firm sizes. The report records:

• Invoices paid within 30 days rose from 57.7% to 59.1%.
• Invoices overdue at 30 days fell from 26.8% to 25.6%.
• Invoiced dollars collected within 30 days rose from 43.4% to 45.1%.
• The average unpaid balance per invoice fell from $2,073 to $1,979.

About seven in 10 firms still carried a past-due invoice, unchanged. Less money was outstanding, but the number of firms with balances did not change. Solo firms had an 18.8% overdue rate, against 26.8% at small firms, 27% at medium firms, and 24.1% at large firms.

Traffic firms most often received full payment within a month, at 77.2%, followed by estate planning at 68.1% and real estate at 65.5%. Workers’ compensation ranked lowest for full within-month payment, at 33.8%, yet had the fewest overdue invoices, at 8%, because insurers paid on longer, predictable schedules.

Family law had the highest overdue rate, at 32%. Debt-collection firms improved most, cutting overdue rates by nearly nine percentage points.

What does card surcharging show?

The number of firms adding a card-payment surcharge rose 16% year over year, while the average rate held near 2.6%. Those firms collected 25% more surcharge revenue. They also steered larger payments toward e-check (electronic bank transfer), priced per transaction rather than by percentage.

Average e-check payments were $2,206, compared with $1,491 for cards; cards lost about two percentage points of collected dollars. Large firms led both measures, with average transactions of $2,231 versus $1,503 for solo firms, making percentage fees costlier.

Small firms instead offered pay-later flexibility rather than passing costs to clients. They should check state rules because some jurisdictions prohibit surcharges.

How far can the data travel?

The findings reflect only 8am customers, not every U.S. law firm, and the sample skews toward solo and small firms in consumer-facing work. Method controls included comparing the same firms across both periods, weighting each equally in payment figures, applying a 30-day paid-or-overdue window, and excluding test accounts, trial accounts, draft invoices and inactive firms.

The report used actual invoices rather than self-reporting. Its 60,000-firm sample is large, and other industry surveys show the same broad pattern: smaller firms have not abandoned hourly billing. Reports of the billable hour’s demise are greatly exaggerated within 8am’s customer base.

Hendricks said: “The picture that is emerging is one of firms getting more disciplined: getting paid more reliably, billing more of what they’ve already earned, and making more deliberate choices about how they get paid.”