Is your theory that the next week there will be an AI lawyer that charges only 400$, then it is a race to the bottom?
There is a proven way to avoid a race to the bottom for wages, which is what a trade union does - a union by acting as one controls a large supply of labour to keep wages high.
Replace that with a company and prices, it could very well be that a handful of companies could keep prices high by having a seller's market where everyone avoids a race to the bottom by incidentally making similar pricing calls (or flat out illegally doing it).