Hourly billing is a method used to calculate fees for lawyers, certified public accountants, tax accountants, and other professionals: an hourly rate multiplied by the time spent on the work. It is commonplace today, but professional services have not always been sold entirely by the hour.

In the United States, one lawyer now publicly advertises a rate of US$6,000 per hour for advice in a particular field. Meanwhile, one strand in the history of time management among US lawyers leads back to efforts to deliver legal aid with limited staff and to make the costs and fees associated with professional work easier to understand and manage.

This article traces the development of hourly billing, focusing on lawyers while also considering accountants and tax accountants. It examines published rates in Japan and abroad, the qualifications needed when comparing record fees, and the future of professional fees in the AI era. It is an explanation based on publicly available sources that could be verified, rather than a comprehensive history of every profession and country.

1. What is hourly billing? More than a professional’s hourly wage

For example, if a professional charging ¥30,000 per hour works for 4 hours, the fee is ¥120,000. If several people are involved, the total is the sum of each person’s rate multiplied by their time. Whether consumption tax, travel expenses, translation costs, and other charges are included needs to be checked separately.

This is not the hourly wage the individual receives as an employee. It is the price of a service that covers the firm’s personnel costs, training and research, facilities, administration, and the costs of accepting professional responsibility. Nor can every hour worked necessarily be billed to a client.

A consultation priced at “¥10,000 for one hour” also needs to be distinguished from an engagement that bills by time for a sequence of tasks: reviewing documents, conducting research, negotiating, and drafting. Besides meetings, which activities are billable—emails, research, travel? In what increments is time recorded and billed? These details affect the total fee.

2. When did it begin? Daily fees, timekeeping, and billing by time

Asked who invented hourly billing, it is tempting to offer a single name and year. But daily fees are also time-based, and keeping time records for internal purposes is different from billing clients by the hour. The history is more accurately understood in stages.

1. 1902A US accounting firm’s contract records daily fees
2. Around 1920Hale and Dorr introduces time records for internal management
3. 1940The ABA publishes Smith’s work on law office management
4. 1950s–1970sHourly billing spreads through the US legal profession
5. 2002Japan abolishes maximum fee rules for tax accountants
6. 2004Japan abolishes bar association fee standards
7. 2024The ABA issues an ethics opinion addressing fees when using generative AI
8. 2026A US lawyer’s US$6,000 hourly rate takes effect for new clients

This timeline brings together selected developments in US law and accounting and Japan’s professional fee systems. The dates do not indicate the first use of hourly billing in each country or profession.

Accounting records show daily fees in the early twentieth century

A historical article in the Journal of Accountancy, the AICPA’s journal, describes a 1902 Haskins & Sells contract specifying US$15 per day for accounting staff and US$50 per day for senior personnel, with travel expenses charged separately. These were daily rather than hourly rates, but they provide an early record of fees calculated according to the professional time committed. The figures are nominal amounts from that period, not amounts adjusted for today’s purchasing power.

Lawyers’ timekeeping began as a way to organize work more efficiently

Reginald Heber Smith is recognized as a pioneer of modern legal timekeeping and hourly billing. According to WilmerHale’s official history, Smith, who had worked on practice management in legal aid, joined Hale and Dorr in 1919 and introduced time records around 1920.

He used increments of one-tenth of an hour—6 minutes. Initially used for internal planning and budgeting, the records had developed into a basis for calculating fees by 1940. That year, the American Bar Association (ABA) published Smith’s Law Office Organization. A notable aspect of this approach was its aim of making the relationship between work and cost explainable, rather than simply enabling higher bills.

As hourly billing spread, it also became a management metric

An article published by the ABA notes that a 1958 pamphlet envisaged 1,300 billable hours per year. These were hours charged to clients, not total working hours.

According to a historical account from the Thomson Reuters Institute, hourly billing became widespread in the United States by the 1970s, alongside existing arrangements such as fixed and contingent fees. The growth of corporate legal departments was one contributing factor: time-based billing made it easier to link outside lawyers’ work to the amounts charged. Time records eventually came to serve not only client explanations but also lawyer performance assessments and firm profitability management.

3. In Japan, fee deregulation expanded the available options

Japan once had rules setting maximum fees for tax accountants. According to the Tohoku Certified Public Tax Accountants’ Association, those rules were abolished as of March 31, 2002. The Nagasaki Bar Association explains that the system under which bar associations set standard lawyer fees was abolished on April 1, 2004.

These dates do not, however, mark the introduction of hourly billing in Japan. The public sources reviewed for this article did not establish which individual or firm first adopted it in Japan’s licensed professions, or in what year.

Today, arrangements such as monthly retainers, fees for individual filings or procedures, fixed fees per matter, and hourly billing are chosen according to the nature of the work. For example, time-based fees can suit a matter where the scope of research or number of negotiations cannot be determined at the outset. Fixed fees are generally easier to quote where the scope of work is standardized.

4. What do professionals charge today? Distinguishing published rates from statistics

Professional fees vary not only by profession but also by experience, specialization, location, firm structure, and the difficulty of the matter. Treating a national average and one firm’s published fee schedule as equivalent can give a misleading picture of prevailing rates.

Japan: examples of published fees for lawyers, CPAs, and tax accountants

These are excerpts from individual firms’ published fee schedules, not industry-wide averages, minimums, or maximums. Apart from the Idogawa office, the schedules above do not specify an effective date; the figures shown were those available when the sources were checked. Please consult the linked pages for the scope of services, additional charges, and other terms.

Accounting also offers a different type of measure. The Japanese Institute of Certified Public Accountants’ Survey of Audit Engagements for Fiscal 2024 reports an average hourly rate of ¥12,779, excluding tax, across statutory audits. The survey covers fiscal periods ending from April 2024 through March 2025 and was published in December 2025.

This figure is calculated by dividing audit fees by actual audit hours. Because it includes work by audit assistants and others who are not CPAs, it differs from the hourly rate quoted for an individual CPA. This average realized rate cannot be directly compared with the individual firms’ standard rates above to judge which offers better value.

United States: user data shows an average lawyer rate of US$349 per hour

According to data compiled by legal software provider Clio, the average hourly rate for US lawyers in 2025 was US$349. In the same dataset, the blended firm-wide rate, including non-lawyer staff, was US$311. These figures are based on Clio users’ data, not a survey of every lawyer in the United States.

United Kingdom: client billing rates and court costs guidelines are different

England-based Clarkson Wright & Jakes lists partner rates of £325–£385 per hour, excluding VAT, in a fee schedule updated in May 2026. Hughes Solicitors also publishes a standard rate of £360 per hour, excluding VAT, for partners and senior staff, effective May 1, 2026. Neither is a UK-wide average.

The Solicitors’ guideline hourly rates on the government website are guidance for the summary assessment of court costs in England and Wales. They are neither market rates charged to clients nor caps on client bills. Cross-country comparisons also require careful attention to currency, taxes, service scope, and the type of source.

5. What is the highest rate ever? A verified example of US$6,000 per hour

One particularly high published hourly rate among the public sources reviewed for this article is US$6,000 per hour for compliance work, announced by Eric Troutman of the US firm Troutman Amin. His September 2025 fee announcement sets this rate for new clients from 2026, distinguishing it from a US$3,000 hourly rate for litigation. Existing clients have separate terms, and the announcement also describes arrangements that reduce rates and options for fixed monthly fees.

Separately, a Reuters report dated January 26, 2026 states that hourly rates for top lawyers at Susman Godfrey had reached US$4,000. That figure is available in the publicly accessible portion of the report.

These figures cannot, however, be declared the highest hourly amounts ever actually paid anywhere in the world. Private agreements cannot be compared, and published rates do not necessarily apply unchanged to every client. The US$6,000 figure should be read as a high-rate example with identifiable services and terms, rather than a world record established across every profession and matter.

For example, in the litigation over Elon Musk’s Tesla compensation, the fee requested in shares by the plaintiff’s lawyers was valued at approximately US$5.6 billion in a June 2024 Reuters report. The trial court awarded US$345 million, but the Delaware Supreme Court’s decision of December 19, 2025 reversed the rescission of Musk’s compensation award and changed the lawyers’ fee award to four times the lodestar—the fee calculated from hourly rates and hours worked. The enormous requested fee was not simply granted as submitted.

As a hypothetical illustration, dividing a US$1 million contingent fee by 100 hours produces an effective hourly rate of US$10,000. That does not mean the parties had an hourly billing agreement at US$10,000 per hour. Compensation for accepting the risk of receiving no fee without a successful outcome differs in nature from compensation based on time spent.

6. A professional with a higher hourly rate can cost less overall

Clients want to know more than the hourly rate: what will it cost in total to complete the necessary work to the required standard? The following comparison assumes that both professionals complete work of the same scope and quality.

A hypothetical illustration, not a statement about any actual professional’s abilities or fees. Taxes and out-of-pocket expenses are excluded. Bar lengths show the relative total fees.

B’s hourly rate is three times A’s, but B’s total fee is 60% of A’s. This does not mean that experience always makes someone faster, or that a higher price guarantees greater ability. It does mean that identifying issues through experience, keeping research on course, and reducing rework have value that an hourly rate alone cannot capture.

Hourly billing makes it relatively easy to review the work performed through itemized records and to accommodate changes in scope. On the other hand, the final cost may be difficult to predict at the start. Since fees increase as work takes longer, there is also a risk of misaligned incentives when clients want greater efficiency.

7. Will professionals keep selling time in the AI era?

If AI reduces a 10-hour task to 1 hour, the fee at an unchanged hourly rate falls to one-tenth. Yet the responsibility to detect AI errors, verify facts and law, and exercise judgment in light of a client’s circumstances remains. This change raises a fresh question about what professional fees are paid for.

The ABA’s explanation of Formal Opinion 512, dated July 29, 2024, states that hourly fees should be based on time actually spent, even when AI improves efficiency. It does not permit adding hours that were never worked because “this would previously have taken 10 hours.” This is an opinion grounded in US model rules of professional conduct, not a law that directly applies to Japan’s licensed professions.

The discussion ahead therefore concerns defining the scope and value of the engagement and agreeing in advance on a suitable fee structure, rather than inflating recorded hours.

Contingent fees are not available for every type of work; audits, for example, are subject to professional ethics restrictions relating to independence. Even under a fixed-fee agreement, a firm can record time internally for profitability analysis and staffing. Managing time and billing by time remain separate activities.

Hourly billing spread as a powerful way to make professional work more transparent and explainable. Time alone, however, cannot fully measure professional value. What matters to both clients and professionals is agreeing on the scope of work, the judgments and outcomes to be delivered, and the price together.

Article dated October 21, 2026. Public sources and fee schedules checked on October 24, 2026. Where publication dates could be verified, sources published before the article date were used; fee schedules with unspecified effective dates are identified as such. Historical fees are shown in nominal amounts, and foreign-currency figures in their original currencies. References to individual firms are not recommendations or guarantees of their fees.