The legal industry has been undergoing a profound transformation over the past five years, driven by the integration of artificial intelligence (AI), evolving business models, shifting client expectations and market disruption. This change is not just about adopting new tools—it is about rethinking how legal work is done and delivered.

AI as a Legal Game-Changer

AI is becoming central to legal workflows, automating routine tasks like document review, legal research and drafting. This allows lawyers to focus on more strategic, high-value work. Technology is also enabling more efficient and cost-effective legal services, including AI-powered advice and self-serve legal tools.

Firms are adopting advanced project management strategies and re-engineering their business models to stay competitive. Many are hiring fewer lawyers and relying more on AI to handle complex tasks. This shift is helping smaller firms compete with larger ones by leveling the playing field.

Changing Client Expectations

Clients now prioritize strategic thinking and complex problem-solving over traditional legal skills like research and writing. AI is reshaping how lawyers are trained and evaluated, influencing everything from education to career development. As top-tier firms focus on high-stakes matters, smaller firms are using AI to take on more sophisticated work and move up the value chain.

Disruption and Opportunity

Market disruption is altering cost structures, pricing strategies and workforce dynamics. Legal departments are keeping more work in-house, while smaller firms are stepping up to handle larger projects. Firms that successfully integrate AI are poised to lead the industry. This is not just adaptation—it is a fundamental transformation of how law firms operate and deliver value.

AI’s Two-Level Impact

AI is transforming law firms on two levels:

1. Individual Augmentation: AI will be embedded in everyday tools—word processors, timekeeping systems and communication platforms—acting as a copilot for attorneys. This will streamline daily tasks and improve productivity.
2. Practice Level Transformation: Repetitive legal work will be automated and augmented at scale. From strategy development to evidence review and brief drafting, AI will optimize inefficient tasks, allowing attorneys to focus on high-value work. This opens the door to scalable growth, where revenue increases faster than costs.

Rethinking Legal Education and Evaluation

As AI becomes capable of generating accurate, refined prose instantly, the value of traditional skills may shift. Clients will increasingly expect lawyers to excel in strategic thinking and problem-solving.

AI will also change how lawyers are trained. With the ability to review thousands of documents in hours, firms can better meet client needs and improve how they mentor and develop talent. The successful attorney of the future will seamlessly integrate AI into every step of their workflow, using it to consume, summarize and expand on critical information.

Structural Challenges and the Path Forward

Despite these advancements, structural barriers remain. In the U.S., law firms are still largely owned by lawyers, with Rule 5.4 of the ABA’s Model Rules limiting non-lawyer ownership. While Arizona and Utah have made exceptions, broader reform has been slow.

This structure limits law firms’ ability to raise capital, invest in long-term technology and offer equity to non-lawyers. In contrast, global professional services firms and tech companies have more flexibility and funding to innovate.

However, AI may unlock efficiencies that were previously out of reach. A single attorney, empowered by AI, could do the work of dozens. Legal services could scale globally without increasing labor or overhead. These possibilities could redefine the legal landscape.

Looking Ahead

The legal profession stands at a pivotal crossroads. Embracing AI is not just about adopting new tools—it is about transforming and evolving the culture within law firms. Firms that adapt will not only enhance efficiency, but also redefine the value they deliver to clients.

This evolution requires openness to new business models, continuous learning, and a commitment to ethical innovation. The firms that thrive will be those that see AI not as a threat, but as a powerful ally in delivering smarter, faster, and more accessible legal services.

References

1. Thomson Reuters. Future of Professionals Report 2024. Published July 9, 2024. https://www.thomsonreuters.com/en-us/posts/technology/future-of-professionals-2024/
2. Bloomberg Law. How Is AI Changing the Legal Profession? Published May 23, 2024. https://pro.bloomberglaw.com/insights/technology/how-is-ai-changing-the-legal-profession/
3. Generative AI: A Guide for Corporate Legal Departments. Published June 26, 2023. https://www.deloitte.com/southeast-asia/en/services/legal/perspectives/generative-ai.html

For more information, contact Jeff Hild at [email protected] or 312.670.7444. Visit ORBA.com to learn more about our Law Firm Group.