Artificial intelligence is often presented as an opportunity for the legal profession. Research that once took hours can be completed in minutes, large volumes of documents can be reviewed more efficiently, and routine drafting can be automated. For law firms, the attraction is obvious. For their clients, however, these developments raise a less comfortable question: if legal work becomes cheaper to produce, why should it continue to command the same fees?
The figures suggest that clients are already considering this question.
In July 2026, Deloitte published research based on a survey of 121 senior legal leaders. Its findings revealed that legal departments expect AI to save or automate an average of 28% of legal work over the next two to three years. More significantly, 85% of respondents expected AI to change how law firms price their services. Deloitte also reported that the proportion of legal work billed by the hour could fall from 72% to 44% over the same period.
Source: Deloitte, The AI Imperative.
This is not simply a story about technology improving productivity. It is about who benefits financially from that improvement.
The traditional law firm model has, to a considerable extent, relied on selling time. Junior lawyers conduct research, review documents and prepare drafts, with clients paying for the hours required to complete the work. AI threatens to reduce the time required for precisely these tasks. Under an hourly billing model, greater efficiency can therefore mean lower revenue, even where the quality of the final work remains unchanged.
Clients are beginning to act accordingly. The Financial Times recently reported that Morgan Stanley, Citigroup and Goldman Sachs are pushing major law firms to reduce fees in response to AI-driven efficiencies. The banks are exploring alternative pricing arrangements and demanding greater evidence of the savings generated by technology.
Source: Financial Times, "Wall Street banks push Big Law to cut fees because of AI".
The implications extend beyond pricing. If clients can bring routine legal work in-house using AI, they may also have less reason to instruct external firms in the first place. Reuters reported in October that AT&T was using AI to reduce its reliance on outside lawyers, including for work traditionally assigned to junior associates.
This creates a difficult problem for firms that have invested heavily in attracting and retaining expensive legal talent. If fewer hours are needed to complete a transaction or review a contract, firms could face pressure both to charge less and to reconsider how many lawyers they employ to deliver the work.
None of this means that experienced lawyers will become unnecessary. Legal advice involves commercial judgment, negotiation, strategic thinking and responsibility for consequential decisions. AI can assist with these tasks without necessarily replacing the people accountable for them. Cheaper legal services could also generate additional demand, while firms that adapt successfully may improve their margins.
Nevertheless, a distinction must be made between becoming more productive and becoming more profitable. If clients insist on receiving the financial benefits of AI, law firms may find that technological progress puts pressure on both their fees and their traditional staffing models.
The real question is not whether AI will make lawyers more efficient. It is whether the economics of legal practice can adapt when the time required to produce legal work no longer provides a reliable measure of its value.