Deloitte Legal: 78% of GCs Want Cost Reductions from Firms' AI — Hourly Billing to Drop from 72% to 44%

Deloitte Legal's July 9 research report found that 78% of legal department leaders cite cost reduction as the leading benefit they want from their outside counsel's use of AI, while 85% of legal leaders believe AI will change how law firms' pricing works. The most consequential projection: hourly-rate work is expected to fall from 72% of legal fees today to 44% within two to three years — a 28-percentage-point structural decline that is faster and larger than most firm leadership teams are planning for. Legal departments expect AI to save or automate an average of 28% of legal work over the next two to three years, and 79% say AI investment has increased year-on-year, with budgets rising an average of 67% among those increasing spend. The data's primary implication for BD leaders is the mismatch timing: if clients are making in-house AI investments now with explicit intent to redirect outside counsel spend, the next 18 months are the critical window for firms to demonstrate AI efficiency in client-visible form — before the panel review that translates client intention into vendor change.