Gartner Says General Counsel Must Get Ready for Consumption-Based AI Pricing

Legal AI Vendors Are Shifting to Consumption-Based Pricing Models That Have the Potential to Lead to Budget Shocks for Unprepared Functions

General counsel (GC) face a fundamental shift from predictable per user technology subscriptions toward hybrid pricing models that combine traditional licensing fees with usage-based charges tied to AI consumption, according to Gartner, Inc., a business and technology insights company.“As legal AI adoption grows, tools consume ever more computing power, putting vendors under increasing pressure to align pricing more closely with usage,” said Shannon Nakamoto, Senior Director Analyst, Research, in the Gartner Legal & Compliance Practice. “Therefore, Gartner is predicting that by 2028, consumption-based pricing will account for over 35% of net new corporate legal technology spend with major vendors.”

AI Success Could Lead to Budget Shocks

Legal departments have traditionally looked at technology spending through the lens of predictable user licensing costs. Linking costs to usage completely shifts that equation. It’s likely that the legal departments achieving the greatest productivity gains from AI assistants and agents will face significant spending increases if consumption is not actively governed.“The goal shouldn’t be to minimize AI spending,” said Nakamoto. “It’s more important to ensure that AI spending is well-aligned to measurable business value.”

Traditional software procurement methodologies will likely prove insufficient for evaluating AI-enabled legal technology. As vendors adopt combinations of subscriptions, credits, consumption allowances and overage charges, legal departments will need greater visibility into how costs are incurred and what activities drive spending.“Pricing transparency should be a critical buying criterion for GC,” said Nakamoto. “It’s essential to understand how AI consumption is measured, what drives costs and how spending will change as adoption grows.”

Manage AI Spending by Use Case, Not by Tool

Different legal AI use cases can have dramatically different consumption patterns, costs and governance requirements. For example, contract summarization may have a very different cost profile than autonomous diligence, investigations or negotiation workflows.Implementing use-case-level approval thresholds and routing policies is essential to ensure high-cost, advanced reasoning models are reserved strictly for high-value legal tasks.

“GCs should stop asking, ‘How much AI are we using?’ and start asking, ‘Which legal outcomes justify the AI consumption required to achieve them?’” said Nakamoto. Doing that requires a solid understanding of how specific use cases drive AI spending.

Knowledge Hub