The landscape around how AI vendors charge for use is becoming more complex On the basis that most firms using AI likely find themselves: (a) in a transitionary period moving from fixed AI subscriptions to consumption based charges, (b) with a mix of fixed and hourly rate arrangements with their own clients, and are (c) struggling to move away from cost- or competition- based pricing towards value based pricing The matrix below shows a simplied view of what you might consider

There is an idea (that I'm really struggling to attribute - if anyone can help!) that whatever it is that helps you overcome the current constraint is the thing that, in time, will prevent you from overcoming the next constraint I've been toying with this idea when it comes to pricing - and again welcome comments as to whether this is helpful/accurate/nonsense(!) I see three key stages when it comes to pricing: (1) - Pricing to Win (Work) Most start here. Arguably most don't

One of the updates we made to the live Pricing session in this term's Mini-MBA, was to be more explicit around these three components (1) Quantum What is the price? Do we want it to go up, down or stay the same? (2) Fee Type Is it hours x rate and the traditional billable hour. A fixed fee. A capped fee. A subscription etc (3) Strategy How are we calculating the price? Is it with reference to: cost plus margin (traditional billable hour sits here) competition or market rate v

Litigation is different when it comes to Value Based Pricing (VBP) But not because of the underlying uncertainty There's a common argument that says VBP is harder in litigation because there are too many variables; you don't know how the other side will react, what the judge will decide, how your own client will react etc etc Uncertainty is a non-trivial issue, but it is not an issue particularly unique to litigation There are similar risks in transactional work; we don't kno

Yes, it is May... but the ONS release was dated April based on data to 31 March. So at this point, I think pick a month you like the look of :) Broadly it looks like input inflation for law firms is around 2.5-3.0% with increased inflationary risks in the second half of 2026 and output inflation (legal prices) stabilising at around 6%. However, predicting where prices are going from here is unusually fraught - up if we see an inflation shock from the Iran war? Down if we see

When the unstoppable force of AI meets the immovable object of the billable hour... The OpenAIs and Anthropics of this world are moving away from all you can eat subscription pricing to subscription + token usage, or just straight up token pricing - and this emerging pricing model is now far more compatible with traditional hourly rate billing Yes - fixed fees and value based pricing better etc etc. My observation here is a practical, rather than ideological, one But the path

Something I'm finding increasingly baffling with AI - why are all the law firms parroting 'efficiency' as the primary benefit? [law firm] announces major partnership and rollout of [product] following successful pilot with [x] hours saved per week Where are the improvements to quality or scope? Where are the improvements to speed or turnaround times? To only publicly talk about efficiency is to immediately beg the question on fees - and increasingly I see clients asking for d

Today, on "this time it might just be different"... Increasingly it seems to me that there is a particular type of practice that is particularly exposed to AI in the short to medium term It's not the consumer, or the SME business owner having a go with ChatGPT - I don't think many of those folks were paying clients in the first place (and I suspect they're creating more legal work in the long run!) Rather it is the larger corporate buyer that has historically bought in modera

Not only do I expect both KPMG and Grant Thornton's own clients to be pressing for a 14% discount on audit fees, in light of this article I also expect every audit partner in every firm across the country to be starting next year's fee negotiation from a much weaker - 'where's the 14% AI saving' rather than the more traditional 'well it's been another tough year for inflation and we need to pass that through' This highlights an important issue when it comes to pricing, partic

After a brief hiatus from March - October 2025, the ONS SPPI is back with a corrected methodology. Let's look at what it shows for UK legal price inflation, and then cover off what's practically changed with the revised methodology. Legal Services Prices increased by 5.6% in 2025 First up, we can see that UK legal prices increased by 5.6% across 2025, down from its 2023 peak of 7.5% and close to the Post-Covid Average (2021 - 2025) of 5.8% Source: The Legal MBA Analysis of ON

Conversations around Value Based Pricing are often framed in a comic book casting of good (VBP) vs evil (Cost Based Pricing / CBP) But it's not an either/or, and it's an incomplete picture Cost and perceived value set the parameters of what a price can be, but they don't define what the price ultimately is Unless you're a VC backed SaaS company burning other people's money, the price a client pays does generally need to be higher than your cost to deliver the service In profe

Value Based Pricing (VBP) is being sold to law firms as a silver bullet to increase prices, whereas it is being sold to clients as a silver bullet to reduce spend Contrast the following real, but non-attributed, quotes: "Adopt and implement value-based pricing models for your in-house legal counsel. Reduce costs based on outcomes and not hours" With "Increased profitability. Firms can capture genuine value for the results they deliver" Both can be correct, but this is... a di

Pricing is our penultimate session in The Legal Mini-MBA, partly because of the alliteration, but mainly because there's some hard yards to cover before we get to it What are you trying to achieve, what sort of clients are you targeting and what services are you offering all need considering before working out how to price those services, for those clients, and to meet those aims Reflecting on the conversations in the pricing sessions over the past couple of weeks, most group

BigHand 's 2025 Pricing and Budgeting Survey is a worthwhile read, and timely for our current Legal Mini-MBA delegates who are wrapping up our lesson on Pricing this week! I normally expect the march of progress to head in one direction in these sorts of surveys, but there's one area in particular that stands out... Clients want greater visibility over fees (p8), but firms are offering less of it (p16) I can't help but (perhaps unfairly) draw a link between less visibility he

We cover Service Propositions (i.e. what do you offer your clients) in the fourth live session of the Legal Mini-MBA We spend some time discussing the trade-offs between offering bespoke vs standardised services drawing from Corporate M&A, FinReg and checks notes fast food… Rather than pit bespoke vs standardised as a binary either/or choice, we introduce some nuance – illustrating tailored, modular and segmented approaches in between the two extremes This is a model based u

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