The AI Dividend: Who Gets the Savings From Legal AI?

By Adam Nguyen, CEO, eBrevia.

For the past two years, corporate legal departments have been told that AI will make legal work faster, more efficient and less expensive.

Faster? Yes.

More efficient? Sometimes.

Less expensive? That’s still very much in question.

AI is compressing work that previously took hours into minutes. Contract review, first-pass drafting, clause comparison, diligence review, playbook analysis and routine redlining are all becoming faster. In some workflows, dramatically faster.

Yet many corporate legal departments are not seeing a corresponding reduction in legal spend.

According to Thomson Reuters’ 2026 State of the Corporate Law Department Report, as of the fourth quarter of 2025, 36% of General Counsel said they expected to increase overall spend on outside counsel over the next year, compared with only 20% who expected to decrease it. CLOC’s 2026 State of the Industry Report tells a similar story from the legal operations perspective: only 37% of departments expected outside counsel spend to increase, down from 58% the prior year, while only 32% expected attorney headcount to increase. In other words: more work, more complexity, and less tolerance for simply adding people or sending more work outside.

Meanwhile, law firm economics remain strong. Thomson Reuters reported that worked billing rates rose 7.4% year over year in the second quarter of 2025, while U.S. inflation was about 2.8%. Reuters reported that profits per lawyer rose 8% and profits per equity partner nearly 12%, while a separate Thomson Reuters Institute report found worked billing rates increased 6.5%.

None of this means law firms are doing anything improper.

But it does raise an important question for every corporate legal department:

If AI is making legal work dramatically more efficient, who is capturing the economic benefit?

The AI Dividend

Every major technology shift creates a dividend. When technology lowers the cost of producing work, someone captures the value. Sometimes it’s the provider. Sometimes it’s the customer. Sometimes it’s shared. In legal services, that answer is still evolving.

Law firms should not be expected to reduce prices simply because AI lowers their execution costs. Clients have always paid for expertise, judgment, responsiveness and outcomes, not just hours worked. But corporate legal departments should also be clear-eyed about the economics. If AI allows routine work to be completed materially faster, that efficiency should not disappear entirely into law firm margin.

For decades, the legal market has relied on pricing models that reward time rather than efficiency. AI makes that tension harder to ignore. If work that once took 10 hours now takes two, clients have a legitimate business question: how should that efficiency be reflected in pricing, staffing and matter budgets?

That is not an attack on law firms. It is a basic commercial question.

Asking the Right Questions

Corporate legal departments should be asking outside counsel how AI is being used on their matters, which types of work have become materially faster, how those efficiencies affect staffing and budgets, and whether repeatable work is better suited to fixed fees or other alternative pricing models.

The best firms will use AI not only to improve their own profitability, but also to deliver work in ways that are more transparent, predictable and aligned with client value. Firms that proactively align pricing with AI-enabled efficiency are likely to strengthen client relationships.

Others may be tempted to use AI quietly: accelerating internal work while preserving legacy billing assumptions. That may work for a time. But as corporate legal departments become more sophisticated buyers of AI-enabled legal services, that approach will invite scrutiny. But law firm pricing is only part of the story. The bigger opportunity lies in rethinking how contract work flows through the enterprise.

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Rethinking the Operating Model

For years, contracting has followed a familiar path. Sales, procurement and business teams negotiated agreements, but routine issues frequently landed on Legal’s desk because Legal was the only practical way to apply company policy consistently.

That operating model made sense when contract volumes were lower and automation was limited. It makes less sense today.

AI makes it possible to embed Legal’s guidance directly into contracting workflows. Instead of reviewing every routine issue, Legal can establish playbooks, approval thresholds and risk tolerances while AI identifies deviations, recommends fallback language, explains risk and escalates only genuine exceptions.

With well-designed workflows, procurement, sales and business teams can handle many routine agreements within guardrails established by Legal. Legal continues to define policy and manage exceptions, but no longer serves as the first stop for every contract.

That changes where the AI dividend is captured.

If companies continue sending routine, high-volume work to outside counsel, they may benefit indirectly from law firms’ use of AI. But they should not assume those efficiencies will automatically translate into lower legal bills. If they redesign contracting so more routine work stays inside the business under Legal’s governance, the savings are more likely to accrue directly to the enterprise.

The Next Competitive Advantage

Those gains extend beyond lower outside counsel spend. Faster contracting supports quicker sales cycles, more efficient procurement, greater consistency across agreements, better contract data and legal teams that can devote more time to strategic advice instead of repetitive review.

None of this diminishes the role of outside counsel. Complex transactions, litigation, investigations, regulatory advice and novel legal questions will always require experienced lawyers exercising professional judgment. However, a significant portion of routine commercial contracting no longer needs to follow the same operating model.

After more than a decade developing legal AI at eBrevia, we’ve learned that technology rarely changes an industry on its own. It changes incentives first. Operating models follow.

That is the transition now underway. The most important question is no longer whether lawyers are using AI, but whether organizations are redesigning how legal work gets done. Procurement, Sales, Finance, Compliance and Legal all participate in contracting. AI allows Legal to establish the rules, oversee risk and maintain governance without becoming the bottleneck for every routine decision.

The first chapter of legal AI was about productivity. The next will be about economics. The organizations that benefit most won’t necessarily be those using the most AI, but those that deliberately redesign their workflows and ensure the AI dividend flows to the business rather than disappearing elsewhere in the system.

To learn more about how eBrevia can help you, please see here.

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About the Author

Adam Nguyen is Co-founder and CEO of eBrevia, an AI company that has spent more than a decade helping enterprises and law firms analyze, negotiate and manage contracts. Today, eBrevia works with corporate legal departments to redesign enterprise contracting for the AI era.

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Sources:

1. Thomson Reuters, 2026 State of the Corporate Law Department Report — GCs can prove their value by responding proactively to a more complex risk environment
2. CLOC, 2026 State of the Industry Report — Rising legal demand outpaces budget and staffing growth, forcing operational shift
3. Thomson Reuters, Law Firm Rates Report 2026 — Law firms discover the secrets to rate growth
4. Thomson Reuters, Law Firm Rates Report 2024 — Law firm rates in 2024: New report finds that rates continue to climb
5. Reuters — Law firms saw strong profits in 2024, study finds; demand expected to ebb in 2025.

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[ This is a sponsored thought leadership article by eBrevia for Artificial Lawyer. ]