Deloitte Projects Hourly Billing to Fall from 72% to 44% of Revenue Within 2–3 Years

The Deloitte Legal report The AI Imperative: Reshaping of the Legal Industry projects a structural shift in how legal work is priced: the share of revenue derived from hourly billing is expected to fall from 72% today to 44% within two to three years, with 85% of survey respondents believing AI will change pricing to a moderate, large, or very large extent. Legal department priorities are unambiguous — cost reduction (78%) ranks ahead of quality improvement (57%) as the primary benefit sought from AI adoption. The commercial implication for firms: external legal spend could decline 20–40% as departments gain leverage over pricing conversations through their own AI-powered data. Firms that do not proactively restructure pricing arrangements risk having that restructuring done to them by clients with increasingly sophisticated benchmarking.