Setting Expectations for GenAI Usage and Pricing with Outside Counsel
Tips for clients and law firms to bridge the transparency gap
The GenAI story in 2025 was adoption. The recent survey of in-house legal professionals by the Association of Corporate Counsel and Everlaw confirmed what many leaders were already experiencing: Generative AI is increasingly more common in corporate law departments, although the technology’s inroads at law firms is less clear. The story in 2026 will be the conversations that lead to greater transparency, new baseline expectations, and a reconsideration of cost and value.
In corporate legal departments, comfort levels are rising, experimentation is giving way to fully adopted processes, and early efficiency gains are real.
This year, we’ll see expectations and best practices begin to evolve. In particular, the survey identified growing tensions in the relationship between clients and their outside counsel. A majority of respondents reported limited transparency into law firm GenAI use and uneven indications of cost savings. A debate is also percolating about how AI efficiency gains should affect pricing and delivery models.
GenAI raises new questions and adds urgency to existing ones. In the year ahead, both in-house teams and outside counsel can, and should, take steps to get ahead of the issues and shape a necessary conversation.
Where We’re At: Transparency, Value and the Billable Hour
Transparency is a key point of tension. Most in-house respondents report limited visibility into whether, and how, their law firms use GenAI on client matters. Just as importantly, many say their outside counsel have not yet passed through measurable cost savings from AI adoption. This transparency gap becomes more notable as in-house adoption of GenAI adoption accelerates.
In-house teams are seeing efficiency gains internally, particularly in drafting, contract work, and research. Those gains are already influencing decisions about which work stays in-house and which is outsourced. Over time, this dynamic is likely to sharpen questions about how outside counsel services are staffed, delivered, and priced.
On pricing, most in-house leaders recognize that hourly billing will remain a major part of the legal services landscape. But the survey suggests growing openness to complementary models — particularly where work is repeatable, data-intensive, or well-scoped. Many in-house teams say they are prepared to explore alternative delivery and pricing approaches, even if adoption is gradual and uneven.
“AI dilutes the time-equals-money calculus, and that is especially true for tasks like document review and other high-volume, repetitive work,” says Kelly Mickelson, head of legal ops at Mars Inc. “We believe that we’re going to have more leverage to push for alternative fee arrangements tied to outputs and outcomes, not hours.”
This is not the start of a sudden transformation, and it’s not a discussion triggered wholly by GenAI. But the new technology is adding momentum to long-running conversations about transparency and value. With this catalyst, parties on both sides of the discussion should expect deeper and more urgent efforts around shaping, if incrementally, expectations and best practices.
The In-House Move: Seek Structure and Clarity
In-house legal teams should see 2026 as the year to pursue structured progress. While every corporate team, law firm, and matter won’t move at the same pace, there are practical steps to take. One is to clarify expectations around transparency. Rather than rely on ad hoc conversations about GenAI (if even that), corporate teams can incorporate light-touch disclosure requirements into outside counsel guidelines, RFPs, or matter kickoffs regarding how GenAI is used, and how the outputs are incorporated and identified.
Such requirements can markedly improve visibility without being prescriptive or restrictive. In-house leaders can start by asking:
Whether GenAI is used; what tools, for what tasks
What safeguards and human oversight are involved in assessing outputs
How transparency in such outputs can be assured
These serve as conversation starters. The ACC offers a more developed list of 10 GenAI questions in-house teams should pose to their outside firms, including signals that should prompt further discussion. Over time, these baselines can support more informed conversations about staffing models, timelines, and costs.
In-house teams can also set more productive terms for eventual pricing discussions. Rather than framing GenAI as a demand for immediate discounts, legal departments may gain more traction by focusing on how AI-enabled efficiency changes the mix of work, the leverage model, or the predictability of outcomes. Pilot programs, such as fixed fees for defined workflows, capped fees, or blended models combining hourly and flat components, would offer a low-risk way to test alternatives.
Whatever in-house teams do, they must do it consistently. Applying similar expectations across matters and firms will signal that GenAI is part of a broader evolution in how legal services are evaluated. It’s a discussion about alignment of expertise, value and the continued role of human judgement, not just a ploy to shortchange outside firms.
The Outside Counsel Move: Get There First
Just as in-house teams should open explicit conversations around GenAI, outside counsel would be well advised to beat their clients to the punch. Firms should make their ongoing adoption of GenAI a part of the client conversation around value, efficiency, and timeliness.
Start by sharing:
Where GenAI fits into workflows
How risks are managed, including technological safeguards and human oversight
Which functions and processes continue to remain in human hands, and why
The roadmap for how GenAI rollouts will benefit client services in the future
These conversations can be had without revealing proprietary processes, but it does require intentional communication.
Firms can get ahead of the pricing discussion. In assessing GenAI’s impact on the profession, the Colorado Technology Law Journal observes that GenAI efficiency “translates to demands for alternative pricing models, including fixed fees and value-based billing. Because of this, law firms should consider moving away from billable hours for work done by AI and instead provide flat fees for using AI-driven review services, making it less expensive for the client and more efficient.”
The client expects GenAI to deliver change, so firms should put themselves in the driver’s seat. By openly sharing where firms are experimenting and the results they’re seeing would likely be welcome and lead to conversations that demonstrate a client-centric approach.
Conversation Will Lead to Clarity
The survey by the ACC and Everlaw defined 2025 as a moment of acceleration. Expect 2026 to begin a period of definition. GenAI is no longer just an experiment, and continued adoption will lead to new expectations and clear best practices.
The year ahead offers space for in-house teams and outside counsel alike to set their standards around transparency, value, and collaboration without forcing premature conclusions about where the market will land. Those who engage early, communicate clearly, and experiment thoughtfully will help shape what “good” looks like in the next phase of the client-law firm relationship.
For more on the growing adoption and gaps between in-house and outside counsel professionals that will drive GenAI discussions in 2026, read Generative AI’s Growing Strategic Value for Corporate Law Departments.
