I read an article from True Value Partners Institute recently that I kept coming back to over the course of a few days. Not because AI and pricing is a new conversation, it definitely is not, but because it summed up a tension a lot of firms are feeling right now.

The data point that stuck with me most came from LexisNexis research published in 2024: 80% of corporate legal executives expected outside counsel bills to reduce because of GenAI efficiencies, yet only 9% of firms said clients were actively raising those expectations with them.
Since then, the market has moved fast. AI adoption has exploded. Firms are piloting and deploying more tools. Clients are becoming more informed and more commercially focused. But when I compare that older research with what we are hearing from firms now, I do not think the gap has gone away.

If anything, it has become harder to ignore.

Having spent years as a BigLaw litigation partner, I understand why firms are struggling with this. Law firms are trying to rethink pricing while still operating on business models fundamentally built around time. And in litigation especially, where unpredictability, risk and changing scope are part of the reality of the work, moving away from traditional pricing approaches is not always straightforward.

What I found interesting was comparing the article with the newer data from BigHand’s 2025 Legal Pricing Trends Report. You can definitely see progress. Firms are taking pricing more seriously. There is more focus on profitability, budgeting, forecasting and AFAs than there was even a few years ago. Pricing teams are getting pulled into more strategic conversations and there is clearly more awareness that pricing strategy now sits much closer to client retention and competitive positioning.

But the report also shows how much operational work still needs to happen underneath that shift in mindset. Only 34% of firms said they had updated pricing models to reflect AI efficiencies and changing client expectations. Nearly 80% said value-based pricing will be important to staying competitive, but only 31% felt they had the systems and infrastructure to support it properly. And almost half of firms still do not use a dedicated pricing solution when pricing matters.

To me, that says firms understand where the market is heading. But many are still trying to operationalize that change using processes and tools built for a very different legal market.

That is where the article became interesting for me. It outlined the different pricing models firms are starting to explore for AI-enabled work: hourly billing with AI disclosure, flat fees, direct cost recovery, value-based pricing and hybrid models.

Honestly, I do not think there is one “right” answer. Different clients and different matter types will require different approaches. But each model comes with its own commercial pressures and risks.

Hourly billing with AI disclosure depends heavily on trust and transparency. Flat-fee work shifts more delivery risk back onto the firm, which means matter scoping and historical data suddenly become much more important. Value-based pricing sounds great in theory, but firms need a clear way to articulate and measure value if they want clients to buy into it. And hybrid models, which I suspect many firms will naturally move towards, are operationally much harder to manage than many people realise.

This is why I keep coming back to the same point with firms: AI pricing is no longer just a pricing conversation. It is an operational one.

You cannot manage this well through spreadsheets, disconnected systems and instinct alone. Firms need better matter data. Better visibility into profitability. Better budgeting discipline. Better ways to model pricing scenarios and track assumptions as matters evolve.

Most importantly, firms need to stop treating this as a future-state discussion.

The firms making real progress are the ones bringing people, process and technology together now. Pricing teams are being involved earlier. Lawyers are getting more support around value conversations. Leadership teams are asking better questions about profitability and delivery models. And firms are putting systems in place that actually support more sophisticated pricing approaches.

That is where I see platforms like BigHand Matter Pricing helping firms most. Not because technology fixes the problem on its own, but because it gives firms structure and visibility at a point where pricing decisions are becoming materially more complex.

AI is already changing how legal work gets delivered. The firms that adapt pricing and operations alongside it will be in a much stronger position than those still waiting for the market to settle first.