AI is changing the economics of legal work, but nearly two-thirds of law firms still rely on traditional methods when setting prices, according to new research from BigHand.
The 2026 BigHand Legal Pricing and Budgeting Trends Analysis, based on responses from more than 800 senior legal finance professionals across the UK and North America, found that 63% of firms rely on familiar approaches when pricing matters.
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Some 35% said lawyers most commonly default to standard hourly rates, while 28% copy pricing from a previous matter without adjusting it. Just 1% reported using pre-made templates within an existing pricing or budgeting tool.
That reliance on historic pricing models comes as AI begins to change both how legal work is delivered and what clients expect to pay for it.
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More than half (56%) of firms reported increased client demand for AI-driven efficiencies or greater transparency around AI use. However, 35% said partner discomfort discussing AI with clients is the most common barrier to proactive conversations about the technology.
“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 Alexandra Guajardo, founder and principal of Xela Advisory, who is a leading industry voice quoted in the report.
“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.”
There is also little consensus yet over who should capture the financial benefit of AI efficiencies.
Some 30% of firms are maintaining existing pricing and using AI efficiencies to improve profitability, while another 30% are still evaluating how those efficiencies should affect future pricing. A quarter of respondents said they offer discounts when clients permit the use of AI.
The technology is already having a measurable impact for some firms: 31% reported improved profitability per matter as a benefit of AI, while the same proportion reported reduced reliance on manual or repetitive work.
Meanwhile, client pressure is extending beyond AI. Some 51% of firms reported increased demand for financial transparency and 49% increased demand for alternative fee arrangements.
“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.”