Rates keep rising because GCs keep paying
Hi there,
“Rates keep rising because we keep paying.”
A Fortune 500 GC (Chatham House Rule means I can’t say who…) said the quiet part loud in a room full of law firm partners and their pricing teams last week. Nobody disagreed.
The honesty of that moment and the knowing silence that followed capture exactly where the legal market stands right now.
At our PERSUIT Exchange event in New York last week, we once again created a space for in-house teams and outside firms to have this candid conversation face to face.
GCs and legal ops leaders from some of the world's largest companies, along with the law firm partners that service them, arrived at the same uncomfortable (and inevitable!) conclusion: the legal market is repricing, and old assumptions no longer hold.
It’s not just in the margins, I’m talking about the whole market for legal services. Expectations have shifted. The people who see it coming are already operating on new terms, while everyone else debates whether it's real.
First mover
The assumption that held this market together for decades was simple: time equals value. How long something took was the only way anyone knew how to price it. We built PERSUIT on the bet that outcomes, not the clock, should be the measure of value. Today, nearly 90% of enterprise legal work on our platform is priced that way. What we see across that work is a market that's already moved further than the rhetoric suggests.
What isn't settled is who leads the rest of the way.
One BigLaw firm partner put his finger on the real blocker: the infrastructure isn't built for change. Compensation, profitability, utilization, every metric that matters inside a firm is built around the hourly model. Dismantling that takes more than a new mindset, it takes a structural shift.
Which is exactly why the GC's point landed so hard. Until GCs are genuinely prepared to move work, firms have no reason to change. Wanting a new model and building one are different things.
This tension has a deadline now, thanks to AI
In-house teams were clear that they aren't losing patience with AI, they're losing patience with the gap between what firms announce and what they can actually demonstrate for their clients.
Both sides are hungry for a conversation about how law firms' use of AI translates into measurable value for clients, or even just how best to deliver the work product for the business. But those sit-downs aren’t happening. As a result, each side is developing AI plans in silos.
The firms and GCs who write the next chapter won't be waiting for consensus. They'll be the ones prepared to break from the comfort of the past, challenge what value in legal services actually means, and commit to pricing it differently, together.
Getting 100 lawyers to agree on where things are heading is the easy part. Agreeing on who moves first and proceeding in unison is the work ahead.
Cheers,
-Jim
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