Don’t get distracted by AI discount fights
If you’re arguing about AI discounts in legal, you’re already behind the real decision.
Over the past six months, across three continents I’ve heard the same debate between in-house teams and law firms around AI pricing.
Clients argue that if GenAI makes work materially faster, fees should come down. No surprises there. They have been operating in a market where time has been the currency of value.
Firms counter that clients aren’t paying for keystrokes; they’re paying for judgment, outcomes, and risk. Again, perfectly understandable from the perspective of firms.
The truth is both sides are right, which is exactly why this fight goes round and round. This isn’t really an AI debate, it’s a pricing logic problem that AI has finally exposed.
What’s actually breaking
For decades, legal pricing worked not because it was elegant, but because its logic stayed implicit.
Firms billed by the hour while justifying value in outcomes. Clients accepted that trade-off because effort was hard to observe and even harder to compare.
AI changed that. Not by eliminating work, but by making effort visible, variable, and increasingly comparable.
When a task that used to take ten hours now takes two, the old explanation (“you’re paying for expertise”) starts to feel incomplete. The buyer can see the gap, but can’t explain the price.
That’s the real tension underneath the AI discount fight.
Why both sides feel stuck
From the firm’s perspective, discounting feels like a trap. If speed becomes the anchor, investment in expertise stops making economic sense. Judgment starts getting priced like throughput.
From the client’s perspective, holding fees constant while delivery time collapses is hard to defend, especially to finance teams that expect logic, not tradition.
So negotiations stall because both sides are arguing from different definitions of value. And when value stays implicit long enough, the business doesn’t keep debating it. Governance steps in and resolves it for you.
The shift most people miss
When pricing logic breaks down, buying authority starts to shift.
Decisions that used to be relationship-led drift toward benchmarks, guardrails, and comparability. Clients aren’t out to punish firms, they are under more pressure than ever to provide a pricing story they can defend internally.
AI didn’t force this move, it merely accelerated it.
What this actually means
The real question isn’t whether AI should trigger discounts, it’s whether firms and clients can align on a pricing model that still holds when time no longer holds as a currency of value.
Some teams will just keep negotiating harder. Smart teams will make pricing logic explicit and define value in ways that survive scrutiny from finance, leadership, and the board.
That difference matters. Because when pricing logic isn’t clear, decisions don’t stop.
They just get made without you.
Cheers,
-Jim
This article originally appeared in The Value Standard Newsletter. Join the 5,000+ legal leaders who get insights into the innovation shaping the legal landscape delivered to their inbox fortnightly.
