Should Clients Expect Price Cuts Due To Legal AI?

This is the central question: should clients expect price cuts from law firms and other legal businesses due to legal AI? Because if there is no economic change, then what is this all for?

If you look at any major technological shift in world history – and although there are gradations of pricing within each area – overall, the cost of doing X has dropped.

For example, long distance transport. Today, if you shop around, you can get a return ticket from London to New York for less than half the weekly average UK wage. In 1900, depending on how you compare airline seats vs ocean liner passage, the difference is notable, e.g. Gemini says: ‘In 1900, an average British worker earned roughly £1 to £2 a week. A steerage return ticket [i.e. economy today] therefore represented about 3 to 7 weeks of a working person’s entire gross wages’. Plus, of course, the flight is seven hours, rather than up to 18 days for a return sea journey. So, a huge change, a massive improvement.

Then take the cost of a computer. Clearly, most people would like the latest Apple product, but if you were prepared to accept something practical that could handle the internet and do word processing, then you’d do fine for just £200, rather than paying a premium for a £1,200 MacBook. This is because the basic tech components needed have steadily dropped in price.

Email costs, at least to the person sending them, are almost negligible, so too the cost of hosting a video conference across the world. Even the cost of putting humans into orbit has dropped significantly because of advances in technology.

You get the point. Technology changes the means of production and eventually drives down the final cost to the customer, and especially where certain ‘basic’ expectations are met.

I.e. the frontier of product development will often be ‘expensive’, perhaps even ‘luxurious’, and therefore can exist in a different pricing environment. But, behind that is a vast hinterland of practical and pragmatic pricing very much based on supply and demand, the same as you’d find in any market in any shopping centre in the world. As technology advances, more of what is possible moves into this more pragmatic pricing hinterland.

So, where does legal help sit? Is law a luxury? Will it always be a sellers’ market? Will clients compete with each other to get hold of these ‘Birkin bags’ / ‘top lawyers’ who can charge whatever they feel the market can support?

Or is legal help a necessary utility? Is it something society and the economy needs to function and therefore should be wholly responsive to market forces, and viewed in the most pragmatic way possible – and where there is a powerful dynamic between buyers and sellers? In short, it’s a real market and where price competition is a primary component.

Luxury or Utility?

If Big Law clients see nearly every legal output they purchase as a luxury good, then AI really has no part in that equation. If you can charge luxury prices – i.e. where the buyer is factoring in your brand, prestige, and status, and then how that in turn reflects on them as part of the socio-economic system, then AI’s benefits are only for the sellers.

In a luxury legal world, AI helps the sellers to reduce their costs by absorbing unbillable time, or tasks where instead a higher rate can be charged. And even if there is a fixed, or flat fee, and if it’s on a luxury basis, then again the law firm simply uses AI to make more profits for itself. Fixed fees don’t have to be competitive. After all, Birkin bags have a fixed price and no-one ever said they were cheap.

But, if the client views the legal output as a utility and therefore is subject to more pragmatic market forces, e.g. genuine price competition and the notion that sellers should seriously consider pricing in order to secure customers whether for the short- or long-term, then AI can really play a major part in the equation.

If lawyer-sellers start to see AI as a pricing advantage, i.e. If we make X output with AI we can sell at a lower price than our peers and still make a nice margin and then we will clean up – then we are in new territory. AI then becomes a real part of the legal market’s economics.

But…most lawyers don’t think this way.

And this is the problem, that is if you’re expecting AI to lead to price cuts.

[ P.S. the NewMod law firms have seen this and are doing it. But, their challenge is the same as above. They need the clients to widen their sense of what should be price competitive. There is no point offering £X output to a customer who replies: ‘But, I’m happy to cross the street to pay 5X for the same thing.’

P.P.S. the other factor here is that the clients can do more for themselves with AI, and let’s explore that in another piece. But, that said, they will still go outside for a massive amount of their legal outputs. ]

Human Nature

Lawyers tend not to see themselves as sellers of price competitive goods. This is in part because their customers tend to pair off with those firms that live in certain market segments. If you ‘belong’ to a certain segment, then you pay whatever the asking price is, the same as you don’t quibble the annual fee for a country club. You want in, you pay the price.

Thus, a New York elite firm would no more expect to drop its fees than Gucci would. And it’s worth adding, its client base of Fortune 500 giants and top banks may not actively want it to cut its prices either. When you’re buying luxury goods a key part in their value is that ‘not everyone else can have them’.

We see the same with perfumes for example. Does X perfume sold in a fancy shop in Mayfair at £500 a bottle ‘smell better’ than Y mass-produced perfume sold at Walmart for £25 a bottle? Well, it may depend on one’s taste, or rather one’s sense of fine scents. But, what the person buying the X bottle knows is – or so they hope – that scent will be rare.

Now, there are of course other aspects to Big Law pricing, e.g. the fact that they have the expertise, experience, the capacity, the connections, the embedded educational quality of top law grads running from top to bottom of the business, and more. And that is no small thing. But, even so, those qualities quickly become ‘normal’ relative to the segment. And then the whole luxury ethos takes over.

So, can that ever change? After all, it’s not law firms creating the luxury ethos, that’s human nature in general.

And if humans always tend to stratify things – usually on a pyramidal basis – then what hope is there for substantive change here?

Is it pointless expecting leading law firms to ever use AI to drop prices, given that despite what GCs may say out-loud, in private they will just keep paying the ever-increasing hourly rates because the impulse to indulge in luxury and ‘keep ecosystem status’ is too overpowering?

It seems to me that things can only change if the clients start to treat more legal outputs as utilities, where there is then the possibility of price becoming a differentiating factor, while still expecting high quality.

Conclusion

The reality is therefore not whether clients should expect AI to reduce the prices of law firm outputs, but rather: will clients change how they view legal outputs, reclassifying in their minds luxury outputs as utility outputs, which in turn allows for the application of price competition via AI use?

I.e. if you complain about Big Law pricing, but consciously or unconsciously you really can’t help but see those outputs as luxuries, then there is no hope of real transformation, whether because of AI, or any other change to the means of production.

But, if you say: OK, some work will always be ‘luxurious’, but what we today class as ‘utility outputs’ is way too small as a percentage of all we pay for – then there is the possibility of real change.

If we want our external advisers to apply AI in a way that provides better pricing, then we have to expand those areas of work that we can call ‘a utility’ and therefore can be subject to truly competitive pricing – and that pricing is supported by the application of AI production techniques.

In short, at heart this is not a legal problem, nor a technology problem, this is a sociological problem about how a stratified human society measures value and how those who make buying decisions consider how their purchases reflect on them.

Richard Tromans, Founder, Artificial Lawyer – July 2026