Forget Hours. Forget Outcomes. Data Will Determine Pricing
More and more GCs are giving me the same prediction lately: in-house teams will develop AI-enabled expertise and acumen faster than their firms.
And when that happens, what clients will pay for won’t be the hours you worked. It won’t be for your brand.
It will be for your proprietary data, and how that will deliver desired outcomes.
Here’s why the conversation is shifting.
Years back, data was the new oil. Everyone wanted to understand it, wrangle it and use it to their advantage.
Then AI arrived on the scene and stole the spotlight.
Now the two are converging in a way that will bring about a value reckoning for the legal industry.
As I’ve said before, the hourly bill is untenable in the age of AI. When LLMs shrink the amount of time spent on legal work from days to minutes, clients and firms will have to adapt.
One way is through data. The firms, ALSPs, or tech providers who aggregate precedent libraries, outcome analytics, and regulatory benchmarks first will lock in clients, switching costs, and pricing power.
The big strategic question for GCs is not just “who can deliver my matters today?” but “who is building the datasets I’ll need tomorrow?”
What’s interesting to me is how the conversation around data and AI has tilted on its axis in just the past six months.
At our first PERSUIT Exchange event in April, the discussion around data and AI was more transactional and almost adversarial. As I wrote back then:
AI and data were everywhere in the conversation, but not just in the buzzwordy sense. There was a clear-eyed recognition that legal, especially in contracts, sits on mountains of data. But in-house data is unmatched by the sheer breadth of data that firms have access to.
That asymmetry matters — especially as firms build proprietary AI tools, raising important questions:
- How is client data being used to train these models?
- How is time saved being passed back to the client?
- If every firm builds its own AI tool, how much time must GCs spend vetting each one?
The tone in the room then was more us vs. them. But my recent conversations with GCs shows a new recognition, understanding, and appreciation of firm data and AI as a source of strength for both parties.
As one GC put it rather bluntly: “I will not pay flat fees. I will not pay hourly rates, but I will pay for data knowledge management from the law firms.”
At first, law firms might resist any movement away from their hourly bread and butter. But if they recognize their proprietary data is actually a moat, they’ve created a pathway to maintaining profits.
Unique, actionable data is also something clients understand – and want! They already pay firms like McKinsey and BCG for it. If firms can demonstrate that their unique data will deliver the desired outcomes, clients will happily pay a premium for it.
If data is becoming the new currency of legal value, then GCs hold the pen on how the market prices it. Here’s what GCs should be doing right now:
- Decide who you’ll bet on.
Identify which providers are genuinely investing in data assets — precedent databases, outcome analytics, regulatory benchmarks — versus those talking about it but still selling hours. - Govern with process, not trust.
Build requirements into your engagement terms and panel reviews. Ask explicitly: How do you use AI? Where does your proprietary data come from? How will we benefit from it? - Measure more than cost.
Start capturing metrics on responsiveness, accuracy, outcome quality, and data-enabled insights delivered. If you don’t measure it, you can’t manage it. - Own the portfolio view.
Don’t let the ecosystem evolve by accident. Be deliberate about the mix of firms, ALSPs, and tech — and ensure they complement rather than duplicate each other.
In anticipation of this, firms should be:
- Shoring up and expanding their data offerings
- Integrating AI tools that make accessing and using that data fast and user-friendly
- Developing the narrative around the value their particular data set delivers
- Creating pricing models that are attractive to clients and profitable for firms
What once felt entrenched — wet ink signatures, armies of junior lawyers, hourly billing — has all faded as technology evolves.
The leverage sits with GCs right now. Use it. Architect your ecosystem deliberately. Demand transparency on how providers are capturing and productizing data. Don’t sleepwalk into someone else’s monopoly.
The legal market is shifting—whether we’re ready or not. The question is whether we will shape that change, or let it shape us.
This post first appeared in The Value Standard, a bi-weekly newsletter dedicated to helping enterprise legal leaders advance in the new marketplace for legal. Join 5,000+ senior legal leaders who get The Value Standard delivered directly to their inbox.
