According to Yahoo Sports' Shams Charania, Williams and the Clippers "have recently engaged in contract extension discussions, but no deal's formed as sides evaluate positions."
Charania added Williams is eligible to sign an extension during the regular season and won't have to wait until the new league year starts to iron out terms.
Prior to dropping a career-high 50 points in a 125-106 win over the Golden State Warriors on Wednesday night, Williams was averaging 22.2 points on 44.4 percent shooting from the field, including 40.7 percent from three in his first season with the Clippers.
The 2014-15 Sixth Man of the Year Award winner also ranks second in fourth-quarter scoring behind LeBron James.
"He's been unbelievable for us," forward Blake Griffin said, per the Los Angeles Daily News' Elliott Teaford. "I knew he could score and all that, but he's been better than advertised in my opinion. The thing that surprised me, too, I had a lot of respect for him as a player, I didn't know he was as good of a passer as he is. He scores the ball with ease, obviously. (Sunday) is another example, but it never seems like he forces stuff."
The question now is if Williams is keen on giving the Clippers an in-season discount or if he's willing to wait things out and capitalize on a career year by entertaining offers in free agency.
If he pursues the latter option, a big payday could be on the horizon for one of the league's premier microwave scorers.