The 8am SMB Law Billing and Payments Report reveals law firms are getting paid more reliably, but billing growth isn’t coming from higher rates
AUSTIN, TEXAS (October 22, 2026) — 8am, the professional business platform purpose-built for the needs of legal, accounting, and client-focused professionals, today released the 8am SMB Law Billing and Payments Report, revealing that hourly billing remains far more common among small and mid-size firms than flat fee billing, despite widespread predictions of a shift away from the billable hour. The report analyzes billing and payments trends for the first half of 2026 across more than 60,000 law firms using 8am MyCase and 8am LawPay and offers recommendations to help firms improve cash flow.
“All too often, firms are making consequential decisions about how they bill and receive payments without real benchmarks to measure against. Flat fee trends are a prime example – the industry narrative suggests many are moving in that direction, but our data shows most SMB firms have not,” said Tanya Hendricks, Chief Product Officer, 8am. “Pricing and fee structure deserve the same careful evaluation that firms give their casework. We created this report to provide credible intelligence on billing, time keeping, and payment trends to help firms operate more effectively.”
The report finds that purely hourly billing out-paced purely flat fee arrangements by more than 4-to-1 in the first half of 2026. Nearly half (48%) of firms billed entirely by the hour, up from 47% a year earlier. Conversely, only 10% of firms used flat fees exclusively, up less than one percentage point from the year prior. The remaining 42% used a combination of both, and more than half of those firms sent a quarter or fewer of their invoices as flat fee.
The trend varies sharply by practice area, as flat fees accounted for 88% of invoices at traffic firms and 64% at immigration firms, compared with just 3% at family law firms and less than 1% at workers’ compensation firms. The findings point to the nature and predictability of the work, not a single industry-wide preference, as a major factor in how firms choose to bill.
Key findings from the report:
- Firms got paid more reliably. Receivables showed consistent improvement, with every month in the first half of 2026 outperforming the same month in 2025. Compared to the year prior, firms saw more invoices paid in full (59% vs. 58%), fewer go past due (26% vs. 27%), a larger share of invoiced dollars collected (45% vs. 43%), and smaller unpaid balances per invoice (down 4.5%).
- Firms billed more, but not because of higher hourly rates. Hourly rates were unchanged at three of four firm sizes, and what firms earned per hour billed rose between 3% and 5%. Meanwhile, invoiced revenue per firm grew between 5% and 8%, indicating the difference came from firms invoicing more of the hours they were already recording. Large firms, for example, billed 12% more hours while recording slightly fewer, increasing the amount of tracked time that reached an invoice from 44% to 49%.
- Firms became more deliberate about what it costs them to get paid. More firms are passing associated card fees along to clients – a common business practice in other industries – rather than charging a higher rate. The number of firms charging a surcharge on card payments rose 16% and surcharge revenue per firm rose 25%. Firms also steered larger payments toward lower-cost methods such as eCheck, which carries a flat fee rather than a percentage. The report found the average eCheck payment was $2,206, compared to $1,491 for card payments.
- Practice area strongly influences how firms get paid. Traffic firms were the most likely to have an invoice paid off within a month (77%), while workers’ compensation firms were the least likely (34%) but also had the fewest overdue invoices of any practice area (8%), reflecting longer, more predictable insurer payment schedules. Family law had the highest share of overdue invoices, at 32%.
“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,” continued Hendricks.
The report closes with practical recommendations for firms, including auditing how much tracked time is actually reaching invoices, adding more detail to fast-turnaround invoices, and treating payment method as a deliberate cost decision rather than a default.
The 8am SMB Law Billing and Payments Report, Fall 2026 edition, is available here. It is the first edition of a newly standardized release in the series, which will continue to publish semi-annually each spring and fall.
Methodology
The SMB Law Billing and Payments Report analyzes aggregate billing and payment data from more than 60,000 law firms, predominantly based in the U.S., using 8am’s MyCase and LawPay platforms. The data spans January 2025 through June 2026. All year-over-year comparisons measure 1H 2025 against 1H 2026.
Firm size is defined by employee count: solo (1), small (2-5), medium (6-10), and large (11 or more); size reflects firm-reported data where available and platform user counts where not.
Billing and payments figures compare the same firms across both periods; invoices are counted as paid or overdue against a 30-day maturation window, and invoices too recent to have reached that mark are excluded. Payment figures weight each firm equally. Test accounts, trial accounts, draft invoices, and inactive firms are excluded throughout. Data reflects the activity of 8am users and is not representative of every law firm in the U.S. legal market.
About 8am
Founded in 2005, 8am is a professional business platform purpose-built to meet the needs of legal, accounting, and other client service professionals. The 8am platform includes 8am LawPay, 8am CPACharge, 8am MyCase, 8am CasePeer, and 8am DocketWise, providing integrated solutions for every stage of the professional services lifecycle. 8am processes more than $27 billion in payments annually. Recognized by CNBC as one of the World’s Top Fintech Companies and named to the Inc. 5000 for 15 consecutive years, 8am empowers more than 270,000 professionals across North America with the most trusted, innovative technology to deliver world-class outcomes for their clients and their firms. To learn more, visit 8am.com.
