AI in Law: Adoption Insights from the Industry
What’s the current impact of AI in law and legal practice? Here's what firms and in-house counsel are telling us.
Each year, we conduct more than 80,000 interviews with law firms and in-house counsel across the globe, as part of our research process. Over the past year, one theme we’ve been hearing repeatedly is artificial intelligence (AI). This selection of insights from both providers and consumers of legal services illustrates the industry’s current experience and future expectations.
Law Firms’ AI Adoption
Private practice is increasingly integrating AI into its workflows, driven by client demands and competitive pressures. At the same time, firms are also keeping an eye on the potential risks at play.
Efficiency via Task Automation
Law firms are seeking to raise efficiency by automating a number of traditional tasks. These include document review, an essential but notoriously time-consuming part of the job.
As AI tools become smarter and firms gain experience in using them, they are being increasingly asked to help with more complex aspects like risk identification and contract management.
More advanced firms are already experimenting with flexible AI agents that can be honed and adapted to their needs through individual usage.
"The rapid development and integration of AI and other technologies in the legal sector will continue to influence our operations. This includes the use of AI for document analysis, risk identification and improving overall efficiency. The new development in here that I see is the use of custom agents [firm is developing] that you install on company level, and then users can adapt and implement."
Intellectual Property Lawyer, Netherlands Law Firm
Client Cost Pressure and New Competition
As we’ll see later, clients are under pressure to control costs. Law firms are also now competing with cheaper alternative legal service providers (ASLPs). Both of these factors are pushing firms to innovate and adapt their service offerings. Some are reaching for AI as a means of reducing client fees while maintaining margins.
"[We expect] continued pressure to reduce costs for attorney document review and the use of AI to try to replace attorney review."
Litigation Partner, US Law Firm
“Clients are increasingly seeking cost-effective and efficient legal solutions, leading to the rise of ALSPs that offer specialized services. This shift pressures traditional law firms to innovate and adapt their service offerings to maintain competitiveness."
NewLaw Strategy Lead, South African Law Firm
New Challenges to Combat
The increasing adoption of conventional and generative AI in law has implications for compliance and security. Law firms are having to develop approaches to mitigate the risks these tools can pose, at the same time as exploiting the benefits they bring.
“While these technologies enhance efficiency, they also introduce new challenges, particularly in cybersecurity and data protection. Law firms must adapt to these changes, offering services in technology compliance, data security and addressing cyber threats.”
NewLaw Strategy Lead, South African Law Firm
Clientside: In-House Counsel and AI Adoption
In-house legal teams are exploring AI to manage costs, streamline operations and reduce reliance on external counsel.
Cost Management
In an unpredictable global economy, many client organisations are seeking to limit spending and maximise return on legal spend. At the same time that AI is prompting a reconsideration of traditional billable-hour fees, in-house lawyers are pushing outside counsel for more competitive pricing and greater value for money.
It seems that hopes are riding on AI and other technologies to help achieve cost efficiencies, with some evidence that corporate clients may be looking to do more in house and rely less on their law firm partners.
“[Major external factors include] the soaring costs of outside legal services and the evolution of technology that can perhaps reduce legal spend i.e. use of AI tools, and other technology for business efficiency."
Senior Executive, NASDAQ-listed company
"Key amongst [major external factors] is the push for AI applications and other solutions within the legal profession in order to drive efficiencies, as well as an uncertain global economic outlook which could have unpredictable pressures upon business.”
General Counsel, NASDAQ-listed company
Task Automation and Worker Replacement?
Closely related to cost efficiency but with wider implications, AI task automation is being explored as a potential route for streamlining teams. It was mentioned by several interviewees as a key external factor in the context of their evolving legal advice requirements.
When asked about the key external factors influencing their need for legal advice in the future, a senior director at an Asia-based manufacturing company told us, "More usage of AI to replace entry level legal workers." Meanwhile, an in-house counsel at a prominent global financial institution answered, "maturity of generative AI solutions for document review purposes".
Conclusion: Expect More Impact
The legal industry is at a pivotal moment in its AI journey. While adoption is at different stages for different organisations, firms and clients alike are looking to AI to help them drive efficiency, manage costs and stay competitive.
As generative tools mature and regulatory frameworks evolve, experimentation will continue but wider and deeper implementation is coming. As well as bringing some of the hoped-for commercial and operational benefits, AI looks set to impact both the structure of legal teams and the client-firm relationship.
This year, we introduced an AI ranking table to our UK guide, bringing it in line with our USA, Global (Global Market Leaders) and USA Spotlight guides. This addition reflects the current and projected growth of AI as a practice area.
“According to the Chambers Market Pulse data analytics tool, Artificial intelligence is among the top 15 trending factors in the UK, frequently mentioned by lawyers and legal buyers in our 48,000+ interactions with the legal market. Some law firms have already begun integrating AI to boost efficiency, and some firms have told us they are reviewing their future needs for trainees and paralegals. The jury is still out on the best paths forward for the legal industry, but it’s clear to me that whoever can strategically deploy AI to achieve measurable impacts will gain a massive advantage in the market.”
Bingzhen Song, Head of UK Solicitors Research
Key Takeaways
- Law firms are using AI to automate tasks like document review and contract analysis, while experimenting with more sophisticated applications.
- Cost pressures and competition from ALSPs are accelerating AI adoption.
- Meanwhile, new compliance, cybersecurity and data protection challenges are emerging, calling for new policies and frameworks to address them.
- Seeking cost reduction amid economic uncertainty, in-house counsel are exploring AI to reduce legal spend and increase efficiency.
- Generative AI is prompting new conversations about workforce structure and legal workflows, with traditionally entry-level tasks and roles being eyed for automation.
Ready to lead on AI?
Explore the Chambers Artificial Intelligent Global Practice Guide for practical insights, jurisdictional comparisons, and strategic frameworks to help you lead with confidence on AI.