In-House Teams and Law Firms Face Pressure to Open Up on GenAI Use and Pricing
Corporate legal departments are adopting generative AI faster than their outside law firms are showing it, and that gap is putting transparency and pricing on the agenda for 2026. According to Everlaw, a recent survey of in-house legal professionals by the Association of Corporate Counsel (ACC) and Everlaw points to growing tension between clients and outside counsel.
- An ACC and Everlaw survey found a majority of in-house respondents report limited transparency into law firm GenAI use.
- Many in-house teams say outside counsel have not yet passed through measurable cost savings from AI.
- Hourly billing is expected to remain major, but openness to alternative fee models is growing.
- Everlaw recommends light-touch GenAI disclosure terms in outside counsel guidelines, RFPs or matter kickoffs.
- Suggested pilots include fixed fees, capped fees and blended hourly and flat models.
A transparency gap between clients and firms
Everlaw describes 2025 as the year of GenAI adoption in corporate law departments. The survey it ran with the ACC found that the technology is increasingly common in-house, while its inroads at law firms are less clear.
A majority of respondents reported limited transparency into how their law firms use GenAI. Many also said their outside counsel have not yet passed through measurable cost savings from AI adoption. In-house teams, by contrast, report real efficiency gains in drafting, contract work and research, and those gains are already influencing which work stays in-house and which goes to outside firms.
Everlaw expects this to sharpen questions about how outside counsel services are staffed, delivered and priced.
Pricing: hourly billing stays, alternatives gain interest
Most in-house leaders recognize that hourly billing will remain a major part of the legal services landscape, according to the survey findings as described by Everlaw. But there is growing openness to complementary models, particularly for work that is repeatable, data-intensive or well-scoped. Many in-house teams say they are prepared to explore alternative delivery and pricing approaches, even if adoption is gradual and uneven.
Kelly Mickelson, head of legal ops at Mars Inc., said: "AI dilutes the time-equals-money calculus, and that is especially true for tasks like document review and other high-volume, repetitive work." She added: "We believe that we're going to have more leverage to push for alternative fee arrangements tied to outputs and outcomes, not hours."
Everlaw stresses that this is not a sudden transformation and not a discussion triggered wholly by GenAI. The technology is adding momentum to long-running conversations about transparency and value.
What Everlaw advises in-house teams to do
The article recommends that corporate teams move from ad hoc conversations to light-touch disclosure requirements in outside counsel guidelines, RFPs or matter kickoffs. These would cover how GenAI is used and how outputs are incorporated and identified. Suggested starting questions:
- Whether GenAI is used, and which tools for which tasks
- What safeguards and human oversight are involved in assessing outputs
- How transparency in such outputs can be assured
The ACC offers a more developed list of 10 GenAI questions for in-house teams to put to their outside firms, including signals that should prompt further discussion.
On pricing, Everlaw suggests that legal departments may gain more traction by focusing on how AI-enabled efficiency changes the mix of work, the leverage model or the predictability of outcomes, rather than demanding immediate discounts. Pilot programs such as fixed fees for defined workflows, capped fees, or blended models combining hourly and flat components are described as a low-risk way to test alternatives. Applying similar expectations consistently across matters and firms is also recommended.
What Everlaw advises outside counsel to do
For law firms, the advice is to raise the topic before clients do. Everlaw says firms should share where GenAI fits into workflows, how risks are managed, which functions remain in human hands and why, and a roadmap for how GenAI rollouts will benefit client services. This can be done without revealing proprietary processes, but requires intentional communication.
The article also cites the Colorado Technology Law Journal, which observes that GenAI efficiency "translates to demands for alternative pricing models, including fixed fees and value-based billing." The journal suggests firms consider moving away from billable hours for work done by AI and offer flat fees for AI-driven review services.
What it means for the market
Everlaw frames 2025 as a moment of acceleration and expects 2026 to begin a period of definition, with new expectations and clearer best practices emerging as adoption continues. It does not predict where the market will land. Instead, it argues that in-house teams and outside counsel who engage early, communicate clearly and experiment thoughtfully will help shape what "good" looks like in the next phase of the client-law firm relationship.
