How law firms are adapting to the age of AI

Not long ago, I had the privilege of partaking in the APAC Financial Times Legal Innovation Roundtable in Hong Kong. The venue and the faces were familiar; however, there was a stark shift in the conversation compared to previous years.

The change in tone around generative AI adoption was unmistakable, as was a shared conviction that the legal profession is rapidly transforming. Where exactly? Rather less clear.

The room agreed on the premise that the law firm of the future will look quite different from today. However, the picture itself remains obscure, with debate circling the practical unknowns: how firms will charge for their work, how they'll train their juniors, and how they'll engage with their data. The room was full of both innovators and leaders, who each have a distinct lens of current challenges and future hopes for the law firm of the future.

What are innovation officers worried about?

The relentless pace of change. Innovation leaders consistently highlighted the sheer speed of disruption as a major challenge. It’s difficult to stay ahead when what’s relevant today can quickly become obsolete tomorrow. This is coupled by the need to run “two-speed” adoption and enablement programs: accelerating AI uptake among early adopters while still supporting laggards and bringing them along on the journey.

The pivot to people. With enterprise-wide AI rollouts now table stakes, the harder obstacle has shifted from technology to behaviour. Disengaged cohorts and uneven uptake within cohorts have firms borrowing from behavioural science, standing up accelerated programs (think cohorts of twenty embedded in workflow design and pain-point discovery), and hiring digital coaches to sit shoulder-to-shoulder with partners. Adoption, it turns out, is also a talent retention play.

The bold experiments. One Australian firm has introduced "Super Saturday", a mandatory in-person day for Sydney partners, complete with a crash course in Legora and Claude, where each partner builds a digital twin of themselves for their teams to draw on. The same firm is now building digital twins of judges and clients. This is just one of many examples of firms thinking innovatively to maximise adoption and engagement with AI.

What are business leaders worried about?

The business model squeeze. Pressure is mounting from every direction to evolve swiftly. The economics of large junior cohorts are getting harder to justify, yet juniors are the ones leading AI adoption inside firms, generationally fluent and quickest to experiment and find new ways of embracing technological solutions to anachronistic methods.

However, this view was not consistent around the table, as some legal leaders argued that AI is actually best utilised by the most senior lawyers at their firm as they understand the content and are more easily able to identify an accurate and useful output.

This places leadership at an impasse: firms can’t afford to over-invest in junior cohorts, and they can’t afford to do without them. The need to find this balance is increasingly vital.

The client dilemma. Change velocity must be calibrated to a client base that runs the full spectrum of AI maturity, from outright prohibition to demanding AI on every matter. One pace does not fit all.

The transparency demand. AI-mature clients want more than cost savings; they want to see which tools were used, how they evolved through the matter, and what value was delivered. That's forcing firms to get creative on pricing. One firm shared how they're now running parallel pricing on matters, which includes quoting the traditional way alongside an AI-informed model. This endeavour has generated a rich dataset on value realisation and a sharper instinct for pricing future work.

Junior lawyer anxiety. The measured view from leadership is that despite significant investment in legal tech products such as Harvey & Legora, automation platforms, knowledge systems, and legal operations functions, the shape of legal service delivery hasn't fundamentally shifted yet. This creates a degree of uncertainty at the junior level: firms are investing heavily in technologies designed to improve efficiency, automate routine work, and reduce reliance on traditional leverage models, which is the very work that has historically underpinned junior training and development.

Encouragingly, juniors themselves are leaning in, experimenting with different AI tools and are open to new ways of learning and working. However, this enthusiasm sits alongside a deeper concern about how careers will evolve in a landscape where traditional pathways are less clearly defined.

The need to train the next generation of partners and legal leaders is critical for future success of the profession, but how that looks is still being determined. The traditional pyramid format is being disrupted, and new models are emerging, notably the diamond model, which reduces entry-level roles while growing the middle tier of specialists, technologists, and legal operations professionals.

The talent crunch. Firms are at a pivotal moment. The lawyers most fluent in technology are also those with the most career advancement options, and the competition is no longer limited to other firms. Technology companies are increasingly competing for this talent, making a compelling employee value proposition essential for retaining top performers. At the same time, the industry is still waiting for the J-curve to turn, but the urgency in these conversations is rising. Firms are rethinking how to shift toward value-based billing, while navigating a critical tension: meeting current client expectations while continuing to develop the next generation of lawyers.

What are the main trends shaping the legal industry?

Behavioural science takes centre stage. AI adoption has confirmed what change managers have always suspected: one-size-fits-all doesn't work, and the traditional time-based business model actively blocks innovation. Firms are leaning into persona building, which consists of structured diagnostics to map where individuals sit on their journey, examining what enables them and what holds them back, and then tailored pathways and Learning & Development from there. Considered and nuanced approach trumps blanket rollouts.

Leadership buy-in is non-negotiable. Adoption flows from the top. When boards and executives are visibly engaged, and partners are coached rather than simply informed, there is a significant impact on firm culture.

Governance has moved into the value conversation. Clients are increasingly sophisticated and now actively ask for AI as part of the value proposition. The challenge for firms: how to monetise it against rising headcount and technology costs.

Practice area nuances are sharpening. In high-volume, process-heavy areas, clients want AI-driven efficiency and are openly benchmarking firms against each other, forcing firms to remain competitive as a general price of entry. In expertise-led areas, the calculus flips: clients defer to the firm and are happy to pay for judgement and experience, with an expectation that AI is embedded in legal services in very different ways depending on the work.

From precision to "good enough." A new dynamic is emerging: one law firm leader noted that clients are increasingly calling to say, “ChatGPT told me X and produced a first draft of our contract. Can you just finalise it?” The reality, however, is that these drafts may only be 20% of where clients believe they are. Explaining the gaps takes time, adds cost, and can erode the perceived value of legal expertise. As a result, firms are having to rethink how they articulate value internally, helping partners better define what “value” means and why continued investment in knowledge systems is critical for future growth.

Billing models under pressure. Mixed reviews within the room — some clients like hourly rates depending on the task, and some do not. The common concern, however, is uncertainty. Fixed fees are landing well, helping to reduce friction and improve predictability. At the same time, pricing models are diversifying alongside increasing client sophistication, with growing openness to success fees and more creative structures. Digital assets are also becoming part of the value story. The constant is communication: clients need support in understanding the bigger picture and the wider risk management story.

Defining the next era of legal practice

In summary, it’s clear that the legal profession has stopped debating whether AI will reshape the industry and is now focused on how these changes will shape the law firm of the future. The challenge has shifted from technology to humans: firms are now drawing on behavioural science, building digital twins of partners (and judges), and grappling with how to train juniors, price their work, and retain their most tech-fluent talent amid competition from the tech companies. However, despite these challenges, the mood in the room was distinctly energised. Leading firms are no longer reacting to change but actively shaping it, co-authoring policy, experimenting boldly, and investing in the knowledge and human infrastructure that will define the next era of legal practice.

Are you looking for support for your firm’s journey toward the legal practice of the future? Learn more about how our AI-powered next-generation platform can support your firm both today and tomorrow.