In 2026, I think we’ll finally hit the ceiling on rate rises. This will be the final year firms can push increases at the high rates we’ve seen over the past few years. Clients simply won’t accept it in a world where AI is actively reshaping how work gets done and how long it should take. That shift forces a fundamental rethink of pricing and budgeting for legal work, not just as a process but as a financial control and business success metric. Firms will need to use 2026 as a period of refocusing, tightening forecasting discipline, and building live budgeting models that detect deviation early enough to prevent write-offs. With clients demanding transparency around AI efficiency and the increase in procurement teams driving shorter RFP cycles, fixed budgets, and clearer definitions of value, the firms with weak data hygiene, inaccurate cost baselines, and partner-driven scoping will face the highest margin erosion.

One of the biggest barriers to better pricing (and profitability) isn’t the strategy or the tools, it’s lawyer behavior. If partners and lawyers don’t use budgeting tools, don’t follow scoping discipline, don’t have KPIs that reinforce good commercial decisions, and don’t feel confident explaining value to clients, then even the smartest pricing model won’t make a difference. And choosing not to fix this is no longer a safe middle ground. If firms ignore lawyer behavior and commercial habits, the profitability gap between those that actively manage margin during a matter and those that only spot issues at the end will widen quickly and visibly (this is already starting to become apparent).

If partners and lawyers don’t use budgeting tools, don’t follow scoping discipline, don’t have KPIs that reinforce good commercial decisions, and don’t feel confident explaining value to clients, then even the smartest pricing model won’t make a difference.

Over the last few years, we’ve seen vastly different pricing approaches across regions: North American firms have built highly experienced pricing teams that are client-facing, strategic, and deeply trusted across the law firm, they are fully embedded as a strategic driver. While in other regions, including the UK, firms are still maturing their pricing functions and empowering partners and lawyers more directly in how they price.

As top US firms continue to reshape expectations in the UK market and UK firms start to lean on US partnerships for growth, firms will need to pivot toward a more aligned US-style model, with centralized commercial governance supported by embedded pricing expertise. This will accelerate as clients push for predictable budgets, consistent reporting, and clearer AI-linked value metrics across matters.

To compete, firms will need integrated pricing, finance, resourcing, and matter-management data, a modern tech stack that supports real-time visibility, and change-management discipline to shift partner behavior. The firms that act early, adopting value-based pricing, building live budgeting capabilities, aligning incentives, and training both lawyers and clients on communicating value will see record profit growth.

By the end of 2026, the firms that master pricing in an AI-driven, US-influenced market will be the ones protecting and growing profit — everyone else will be explaining how they lost it.

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Over the next couple of years, we’ll see a noticeable shift in how UK firms structure and operationalize pricing. As client expectations sharpen around budget discipline and value-based outcomes, firms simply won’t be able to rely on partners alone to own pricing. Firms need embedded expertise, clearer governance and repeatable frameworks that elevate pricing to a strategic function. (This is exactly where tools like BigHand Matter Pricing become foundational, giving firms the infrastructure to mature their pricing operations without needing a fully built team on day one.)

At the same time, firms are rapidly moving away from Excel as the primary engine behind pricing and finance. The old model of scattered spreadsheets, manual inputs and version confusion is becoming commercially risky. As demands rise for real-time reporting and defensible profitability models, firms will shift toward hybrid pricing environments where Excel plays a supporting role, not a central one. BigHand sits right in this evolution by offering structured governance and integrated financial data as a single pricing source of truth, while still allowing flexibility where teams need it. We’re already working with several firms to help take pricing crafted in their trusted spreadsheets and build this into comprehensive, trackable budgets in our tool.

As AI begins to automate tasks that historically relied on billable hours, clients will push hard for clarity on where value comes from and how efficiency gains translate into pricing models.

Finally, pricing for AI-enabled legal services will dominate strategic conversations in 2026. As AI begins to automate tasks that historically relied on billable hours, clients will push hard for clarity on where value comes from and how efficiency gains translate into pricing models. Firms that cling to pure hour-based billing will struggle to articulate value or defend margins. Those that adopt more sophisticated, model-driven pricing will set the pace. BigHand’s pricing tool allows firms to scenario-model these emerging AI-linked matter types to assess margin sensitivity, giving firms a real commercial edge as AI becomes mainstream.

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With the dual pressures of rising client expectations and the increasing prevalence of AI in the delivery of legal work, firms are faced with a clear opportunity in 2026. The change in pace brought by the advent of AI means that legal teams can no longer wait for retrospective monthly reviews or the end of a billing cycle to assess the financial health risk of a matter. The most successful firms in the coming year will treat budgets as active, daily tools rather than static spreadsheets created (at a considerable time cost) and forgotten.

The change in pace brought by the advent of AI means that legal teams can no longer wait for retrospective monthly reviews or the end of a billing cycle to assess the financial health risk of a matter.

Financial health must be monitored in real-time and added into the day-to-day workflows of lawyers, not analyzed as a post-mortem. Switching to a more proactive approach allows lawyers to spot issues immediately (e.g. tasks exceeding time estimates) rather than reacting to client complaints at time of billing. Integrating budget review into the daily workflow reduces painful end-of-matter write-offs and ensures that AI-driven efficiency gains equate to firm profitability, rather than just lower client bills.

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