The "Client Value Squeeze": 90% of GCs Report Constrained Strategic Impact Despite AI Surge

Thomson Reuters' 2026 State of the Legal Market has put a name to the central tension in the buyer-firm relationship: the "client value squeeze." Nearly 90% of general counsel report that resource constraints prevent them from delivering the strategic impact their organisations expect — yet outside counsel continues commanding premium rates even as AI accelerates firm productivity. Simultaneously, the Ironclad 2026 State of AI in Legal survey (800+ respondents) found 91.6% of lawyers now use AI, up from 69% in 2025, but roughly 60% of in-house counsel see no noticeable cost reduction from their outside firms. This structural disconnect — efficiency accruing to firm margins rather than passing through to clients — is the defining buyer grievance heading into the second half of 2026 procurement cycles.