Industry Observers Predict GenAI Will Disrupt Client-Firm Relationships and Billing Models
Media coverage draws on insights from latest Everlaw/ACC in-house survey
Everlaw’s latest corporate in-house report drew attention to the rapidly rising adoption of generative AI – and the impact on the business of law. The survey of 657 in-house legal professionals across 30 countries, co-developed with the Association of Corporate Counsel, found that adoption of GenAI had more than doubled, to 52%, year over year.
Part one, Generative AI’s Growing Strategic Value for Corporate Law Departments, found that GenAI is helping legal professionals work faster, communicate more effectively, and deliver better client service. And one-third of in-house teams are already seeing measurable cost savings. This is naturally changing the amount and types of work that in-house teams choose to outsource. Many in-house professionals now predict a recalibration in how outside counsel deploy GenAI, and how legal services will be priced.
The second part of the survey, The Role of GenAI in Proving Corporate Law Department Value, examined the ways in which GenAI is improving how in-house teams articulate business value and redefine their status from cost center to business driver. The leading benefit identified in the research was that teams are more quickly delivering legal support and matter resolution.
The legal industry is undergoing a technological transformation at a pace once thought impossible.
Both installments drew media attention across the legal industry from more than two dozen publications – including Bloomberg Law, Law.com, Law360, Canadian Lawyer, and The National Law Journal. The adoption surge led much of the coverage.
“The legal industry is undergoing a technological transformation at a pace once thought impossible,” Ma Fatima wrote in the JDJournal. “While only a small number of teams experimented with AI in prior years, the findings show that 2025 marks a turning point – the year when GenAI became an essential component of modern legal work rather than a novel experiment.”
Despite the many upbeat findings in the survey, the report also identified tensions that will continue to play out in 2026 and beyond. These tensions are not around the tech itself, or the workflows it will inhabit, but in what it means for relationships between in-house teams and their outside counsel.
ACC President and CEO Veta Richardson told Canadian Lawyer's Jessica Mach that accelerating adoption has been accompanied by greater optimism about and trust in AI technologies. But she also said that GenAI will fuel in-house desires to challenge how legal services are delivered and billed.
“This reflects a growing willingness among in-house teams to challenge traditional models and explore new approaches,” she said.
The Value Is There While Key Metrics Lag
Before GenAI can significantly affect how legal work is scoped and outsourced, teams will need to understand exactly how well it’s working, and what benefits it is delivering. So far, teams that have adopted GenAI have not been great at articulating those benefits.
It’s going to take a little bit longer for the metrics to actually catch up with the appreciation of the impact.
Writing for Law.com’s LegalTech News, Ella Sherman noted that “the lack of outcome-based performance metrics makes it more difficult for in-house teams to track the impact of their growing gen AI adoption. Only 28% of respondents track time to resolution for legal matters, 12% track outside counsel performance metrics, and 12% track technology adoption return on investment.”
She spoke to Everlaw Senior Strategic Discovery Advisor Chuck Kellner, who told her, “It’s going to take a little bit longer for the metrics to actually catch up with the appreciation of the impact just because it’s been so short of time that we’ve had to actually operate these tools.”
Closing the Transparency Gap
A lively writeup from Above the Law’s Stephen Embry also looked at the lack of transparency and the failure of AI-driven savings to materialize:
“Fifty-nine percent of in-house professionals remain unaware of whether their law firms are using [GenAI] on their legal matters,” he wrote. “And even more startling: as of now, 80% — yes, 80%! — of those surveyed are not requiring or even encouraging outside counsel to use GenAI. Even more telling: Of those firms who are using GenAI, 59% of in-house counsel say they have seen no noticeable changes in what is being billed.”
Writing for ACC Docket, Blake E. Garcia and Mauro Whiteman also focused on the transparency gap, and underline key risks of letting it persist, writing:
“The absence of visibility creates three risks:
Value blindness: Clients cannot assess whether GenAI is making their legal services faster or cheaper.
Pricing assumptions: A lack of information on how law firms are using AI risks creating unrealistic expectations from clients on how AI may or may not reduce legal costs.
Trust deficit: Without clear disclosure, clients may worry about quality, security, or ethical implications of AI-generated work product.
“For a profession built on fiduciary duty and client confidence, this lack of transparency is not sustainable.”
In-House Leaders Can Press Their Advantage
Christine DeRosa, covering the report for Law360, noted that “most in-house legal departments have yet to see tangible savings from their outside counsel’s use of generative AI, with 59% of respondents reporting that they haven’t seen noticeable savings yet.”
Everlaw CLO Gloria Lee indicated that this will have to change, telling DeRosa, “One thing every general counsel says about their outside counsel is they want greater value.”
So it will almost certainly fall to corporate legal leaders to make the first move. Fortunately for them, corporate legal teams not only have more reason to close the transparency gap and revisit costs, they also seem to have the negotiating advantage. In a broad survey of AI in the legal industry in early January, Law360’s Michele Gorman zeroed in on the finding that more in-house teams – nearly two-thirds – say that GenAI will allow them to rely less on outside counsel. Gorman’s article speculates that further AI developments will deliver ever-greater efficiencies and in-house capabilities to corporate teams, making them less dependent on outside expertise.
For a profession built on fiduciary duty and client confidence, this lack of transparency is not sustainable.
The first step to using that leverage to control costs is to simply understand where new technology is being applied, and how much it is improving outcomes. In an article on the report titled, In-house Teams Are Quickly Adopting Gen AI. They Don’t Know if Their Outside Counsel Are Doing the Same, Law.com’s Benjamin Joyner led with the transparency gap, and seemed to put the blame on in-house teams: “In-house lawyers are using generative artificial intelligence in their legal practice at a dramatically higher rate than a year ago,” he wrote, “but they have yet to exert much pressure on their outside counsel to do the same.”
Everlaw’s Gloria Lee told Joyner that corporate departments may have to fully figure out GenAI themselves before laying down the law with their outside firms. “Most in-house teams are still defining their own GenAI policies, so they may be reluctant to dictate how outside counsel should use it,” she said.
That’s the start of the conversation, and it would seem that corporate leaders can then drive past baselines of usage and outcome to either pursue more favorable pricing structures with their outside firms, or move more work back in-house. Talking about the research with Bloomberg Law’s Isabel Gottleib, Veta Richardson said corporate teams, not outside firms, will drive the shift in the pricing of legal services.
“Clients have a lot more options now in terms of how they assure that the services their organizations need are provided,” Richardson told Bloomberg Law, which also notes that legal departments will use their growing GenAI rollouts to handle internally tasks that previously went to outside firms.
The Billable Hour in the Crosshairs
We’re going to see GenAI’s impact on the billable hour play out over the longer term. The fact that only 13% of corporate teams said GenAI was leading outside firms to bill fewer hours, and only 20% were seeing faster turn-around also caught the eye of GeekLawBlog’s Greg Lambert:
“One major reason is that law firms remain where they always were: a patchwork of experiments instead of a unified transformation,” Lambert writes. “The business model based on time-spent (billable hours) is deeply embedded.”
Along similar lines, Bloomberg Law’s Isabel Gottlieb quotes Weston Wicks, senior director on Gartner Inc.’s legal and compliance team: “Law firms don’t know how to charge clients for using AI tools, and clients don’t know how to figure out, ’If we request a reduction in fees because these tools are available, how do we do that?” Wicks tells the publication.
That said, the report indicates that GenAI has the staying power to upset that dynamic. Above The Law’s Jeremy Barker points out that it’s typical for AI to signal “big changes on the horizon, with incremental movement in the current day-to-day.” Writing in Stat(s) Of the Week: GenAI And the Billable Hour, Barker highlights that most organizations (61%) are “somewhat” or “very” likely to push back on law firm pricing models.
Though most say they are not aware about their law firms’ use of GenAI on legal matters and are not actively encouraging adoption, their own use of the technology is allowing in-house teams to take on more work themselves, Barker writes. “Momentum is building against the billable hour,” he quotes Everlaw blog. “Firms that connect GenAI-enabled efficiency to fair, transparent pricing will differentiate themselves as modern, client-first partners.”
Clients have a lot more options now in terms of how they assure that the services their organizations need are provided.
Next Up: More GenAI, and More Sensitive Conversations
In The National Law Journal’s predictions for 2026, three attorneys foresee that in-house teams will take the lead on AI-driven change. Specifically, the writers note that corporate legal departments have new leverage: “The power shift implications are stark: 64% of in-house teams now expect to depend less on outside counsel because of AI capabilities they’re building internally.”
This means that outside firms and in-house departments are going to have to confront the issues, and soon. While corporate teams may seem to hold better cards, there’s also value in outside firms showing the initiative and starting the conversation on their own terms. Check out how this might play out in a recent Everlaw blog post: Setting Expectations for GenAI Usage and Pricing with Outside Counsel.
Looking at the research, and the industry-wide reactions to the data, it’s possible that the real transformation of this GenAI era for the legal industry will be less around the technology itself, and more about the relationships it changes.
