We recently brought together a group of in-house legal leaders for a workshop focused on one question:
How might we approach legal pricing so that clients feel confident about cost while law firms are rewarded for expertise, judgment, and results?
We spent the session mapping what is working today, what is not, and what the future could look like. What stood out most was not a single breakthrough idea, but how consistent the underlying tensions were across the room.
Legal pricing quickly became a conversation about trust
It didn’t take long for the conversation to move beyond pricing models themselves.
On the positive side, people talked about strong relationships, trust, and the genuine value that good firms bring through expertise and judgment. Those things are still very real and very important. At the same time, the negatives were just as clear. Clients described a lack of predictability and difficulty understanding what drives cost. Firms talked about pressure to discount or fit work into structures that don’t always reflect the value of what they’re delivering.
What emerged is this: pricing is one of the main ways trust gets tested. When it feels unpredictable or hard to explain, it strains even strong relationships. When it feels clear and fair, it reinforces them.
Incentives are not aligned, but relationships are doing a lot of work
One of the more candid parts of the discussion was around why pricing models actually change in practice.
It is rarely because everyone agrees on a better model. More often, it is because someone is trying to protect a relationship that matters to them.
Several people pointed out that law firm partners may not prefer alternative fee arrangements (AFAs), but they’ll find a way to make them work for clients they care about. On the other side, in-house teams are often pushing for change with firms they trust and want to continue working with, not replace.
The result is a situation where underlying incentives remain misaligned, but relationships are strong enough to keep things moving forward. That works, but it also limits how much real change happens.
There is more friction than either side realizes
Another theme that came up repeatedly was how easy it is to underestimate what is happening on the other side of the table.
One in-house leader shared that when she asks for an AFA, she isn’t always thinking about the internal hurdles that creates for a partner: compensation structures, expectations around hours, and internal approvals. At the same time, law firms don’t always see the level of scrutiny in-house teams face to manage budgets and justify spend.
Everyone in the room was making reasonable decisions, just based on very different sets of constraints. Without a clear understanding of those constraints, pricing conversations become more difficult than they need to be.
AI is changing the conversation, but not in a simple way
AI came up in almost every group, though the conversation was less about efficiency gains and more about what those gains actually mean.
If work can be done faster, should it cost less? If part of the work is handled by AI, what exactly is the client paying for? Where does the premium still exist?
There was no consensus, but there was a shared sense that time is becoming a weaker way to measure value. At the same time, there isn’t yet a widely accepted alternative. That gap is generating a lot of uncertainty, and it’s one the industry will need to work through deliberately.
The way legal work is packaged makes pricing harder to change
A more practical insight from the session was how much the structure of legal work itself limits pricing innovation.
Today, a lot of work is still bundled together. Strategy, execution, and more routine tasks often sit in the same scope. When everything is packaged the same way, it becomes difficult to price different parts of the work differently — even when it would make sense to do so.
Several groups landed on the same idea: work needs to be broken into clearer components, with scope defined more precisely, and more intentional thought given to how different types of work are priced. It is not a small change, but it feels like a necessary one if pricing models are going to meaningfully evolve.
Data is starting to shape what work should cost
Alongside the conversation around scoping and structuring work, there was also a lot of discussion about the role data could play in making pricing feel more predictable and easier to anchor.
In particular, the idea of using data to arrive at a “should cost” number for more typical or repeatable types of work came up multiple times.
Today, many pricing conversations still rely heavily on precedent or individual judgment. That can make it harder for clients to know what to expect, especially when they are managing similar matters across firms or over time. It also makes it harder for firms to clearly explain why something is priced the way it is.
A “should cost” framework is not about standardizing everything or removing flexibility. Instead, it creates a more informed starting point. By looking at historical matters, internal benchmarks, or broader market data, both sides can have a clearer sense of what a given type of work tends to cost before getting into the specifics of a new matter.
That context can make conversations more straightforward. It gives clients more confidence going in, and it gives firms a way to anchor pricing in something more concrete than prior experience alone.
It also connects closely to the need for clearer scoping. As work becomes more consistently defined and broken into components, it becomes easier to compare like-for-like and build more reliable benchmarks over time.
This is still evolving, but it feels like a practical step toward bringing more consistency into pricing without losing the flexibility that complex legal work often requires.
The most useful ideas were also the most practical
When we shifted to solutions, the standout ideas weren’t the most radical ones.
They were things like setting clearer expectations at the start of a matter, having more transparent conversations about what drives cost, and aligning earlier on scope and outcomes. These are not new concepts, but they are not consistently done well today, and that gap represents real opportunity.
There were also bigger ideas in the mix, like outcome-based pricing, risk sharing, and portfolio approaches. Those generated a lot of interest, but also came with real challenges in terms of implementation.
Where this leaves things
There was no single answer that the room landed on, and that’s probably the point.
Legal pricing is being pulled in a few different directions at once. Clients are asking for more predictability and transparency. Firms are working to preserve the value of their expertise. Technology is changing how work gets done, but not yet how it gets priced.
What felt most clear coming out of the session is that progress is likely to come from a combination of things. Better alignment on incentives, greater transparency into how pricing works, and a clearer understanding on both sides of what drives value.
None of that is simple, but it does feel like the direction the industry is already moving in, and these conversations are part of how it gets there.
