AI Is Making Legal Work Cheaper. So Why Aren't Clients Paying Less?
New Australian research reveals that while artificial intelligence is helping law firms reduce costs and improve efficiency, relatively few are passing those savings on to clients.
According to Clio's Australian Legal Insights Report 2026, 77% of surveyed AI users say the technology has reduced their cost per matter, while 83% report being able to handle more work without increasing resources.
Yet those efficiencies are not necessarily translating into lower legal fees.
The report found that just 10% of respondents have reduced pricing because of AI-driven efficiencies, while 37% say improvements in service quality or speed have justified price increases. A further 29% report maintaining their prices despite broader economic pressures.
The findings raise an increasingly important question for the legal profession: who should benefit financially when technology makes legal work more efficient?
For law firms, AI represents a significant investment, with subscription costs, implementation and training creating additional expenses. Faster turnaround times and improved service quality may also justify maintaining or increasing fees.
For clients, however, the expectation may be different. If work that previously required several billable hours can now be completed substantially faster, should that efficiency translate into lower costs?
The research comes as Australian firms continue experimenting with pricing structures. Hourly billing and flat-fee arrangements are each used by 58% of surveyed firms, reflecting a market where traditional and alternative pricing models increasingly coexist.
LawUno Insight
AI is changing the economics of legal practice, but the question of who captures the financial benefit remains unresolved.
Law firms have legitimate reasons to invest in technology and protect profitability. Equally, clients may reasonably expect to share in the efficiencies that AI delivers.
As automation becomes more sophisticated, firms may face growing pressure to demonstrate value through outcomes, expertise and transparency rather than time spent.
If AI allows a lawyer to complete five hours of work in one hour, should the client pay less, or should the firm retain the efficiency gain?