Partner discomfort discussing AI with clients is the most commonly cited communication barrier, reported by 35% of law firms. 

AI is changing the cost, speed, and resource mix behind legal work, but 63% of law firms rely on familiar approaches to set pricing, finds the 2026 BigHand Legal Pricing and Budgeting Trends Analysis.

Asked what lawyers most commonly do when pricing a matter, 35% of respondents report they default to standard hourly rates. A further 28% say lawyers copy pricing from a past matter without adjusting it. Just 1% report use of pre-made templates within an existing pricing or budgeting tool.

Those practices are coming under new pressure as firms decide how AI efficiencies should affect fees and client value. More than half (56%) report increased client demand for AI-driven efficiencies or transparency around AI use. At the same time, 35% cite partner discomfort discussing AI with clients as the most common barrier to proactive communication about technology.

The new research draws on five years of market data and new responses from more than 800 senior legal finance professionals across the UK and North America. It features commentary from leading industry voices including Brad Antici, Chief Pricing Officer at Butler Snow, and Alexandra Guajardo, Founder and Principal of Xela Advisory.

“Historical matter data is still incredibly important, but we have to be careful about using prior matters as the answer rather than as a starting point,” said Guajardo. “If the way the work is being delivered is changing, simply carrying forward the same staffing or pricing assumptions may not give us the right result.”

The findings point to a growing disconnect between firms’ commercial ambitions and their ability to get pricing data and expertise to lawyers when decisions are made. Key findings include:

• Real-time pricing capability has declined. The proportion of firms able to adjust pricing in real time has fallen across every scenario measured, with declines ranging from six to 13 percentage points compared with 2025. The steepest fall came under competitive pricing pressure, where reported capability fell from 30% to 17%.
• Client expectations continue to rise. Some 51% of firms saw increased demand for financial transparency, while 49% saw increased demand for alternative fee arrangements (AFAs). More than half (56%) saw increased demand for AI-driven efficiencies or transparency around AI use.
• Budgeting is widespread, but active management remains limited. Nearly two-thirds (63%) track budgets against actuals in a structured way, including 40% that review them at key milestones. Just 23%, however, actively monitor and update them throughout the matter. Among firms assigning matter budgets, 99% report some increase in billing realization.

“Client pressure on transparency, value, and pricing flexibility has become structural,” said Eric Wangler, Global President and Chief Revenue Officer at BigHand. “Clients now enter pricing conversations better informed. Their internal capability has grown, and so have their expectations around cost, value, and the benefit of AI.

“Firms have invested in pricing expertise, but it does not always reach the lawyer when a price is set or changed. If insight arrives after the decision, the firm has already lost the chance to act. Margin is exposed, and clients get less certainty, challenging ongoing business relationships.”

The report describes this disconnect as the commercial adaptability gap. It is the distance between what clients ask for and what firms can deliver consistently. Firms largely understand what their clients want. Many lack the connected data, governance, and technology to make informed pricing decisions at the outset and respond quickly when scope, cost, or client expectations change.

AI brings that challenge into sharp focus as many already see measurable benefits from the technology. Improved profitability per matter and reduced reliance on manual or repetitive work were each reported by 31% of firms.

There is much less certainty about how to price those gains. No dominant approach has emerged. Nearly one-third (30%) are maintaining existing pricing while using AI efficiencies to improve profitability. Another 30% are still evaluating how those efficiencies should shape future pricing, while 25% offer discounts when clients permit AI use.

Download the full 2026 Legal Pricing and Budgeting Trends Analysis today.