The AI Dividend: Who Captures the Savings?
Thomson Reuters' 2026 State of Corporate Law Department Report found worked billing rates rose 7.4% year-over-year in Q2 2025, with profits per lawyer up 8% and PEP up 12%. Yet CLOC's 2026 State of Industry survey found only 37% of in-house departments expect outside counsel spend to increase — down from 58% the prior year. The gap is not accidental. As one commentator put it: "If work that once t
BY FRONTIER DESK · JULY 23, 2026 · 1 MIN READ
Thomson Reuters' 2026 State of Corporate Law Department Report found worked billing rates rose 7.4% year-over-year in Q2 2025, with profits per lawyer up 8% and PEP up 12%. Yet CLOC's 2026 State of Industry survey found only 37% of in-house departments expect outside counsel spend to increase — down from 58% the prior year. The gap is not accidental. As one commentator put it: "If work that once took 10 hours now takes two, clients have a legitimate business question — how should that efficiency be reflected in pricing?" Law firms have defensible reasons not to cut rates simply because AI lowers execution costs, but the tension between AI-driven productivity and hourly billing is increasingly difficult to paper over.