Legal Technology Trends

Big news yesterday, ICYMI: an independent research report on the impact of AI in the legal industry found some really promising signs of early transformation and deeper adoption than a lot of other studies suggest. Among the findings: ➡️ High adoption: the 40 law firms and legal departments surveyed had an average usage rate of purchased licenses of 92%, with rapid license growth also reported. Many firms scaled up to hundreds or even thousands of licenses within months of pilot completion. One firm said that when they announced licenses would be expanded to junior associates, they literally cheered. ➡️ Strong usage: usage is trending upwards in almost all organizations surveyed, with some firms reporting waiting lists for licenses. ➡️ Fast value realization: Upon adoption of AI, measurable benefits were evident in three months - for some firms as quickly as one month. ➡️ Significant benefits: For in-house teams, adoption of AI gave rise to time-savings, the ability to serve the business faster, and cost-savings (through reduction of outside counsel spend). For law firms, benefits included time-savings (especially in non-billable workflows) but also the elimination of drudge work, improved lawyer engagement and retention, and improved relationships with clients. ➡️ Ability to do more: for large firms, they found they were able to handle work with AI that was previously unfeasible due to profitability or capacity constraints. Some legal departments reported that they were keeping more work in-house as a result of use of AI. Other interesting insights also emerged from the study: 💥 Adoption strategy: Power users (defined as users entering 30+ prompts per week) are key. Word of mouth testimony from power users was revealed to be the most effective method of spreading adoption across organizations. 💥 Attachment to the AI was high across surveyed firms. 100% of those surveyed said their lawyers would be upset or disappointed if it was taken away. 💥 Happier lawyers and workplaces: out of all benefits, reduction in time spend on non-billable work and greater workplace fulfillment were high on the list. 💥 The longer people use AI, the more fulfillment they experience from it. 💥 Early signs of business model change: Use of AI was seen to be a catalyst for change, opening up avenues of discussion between law firms and clients on topics such as pricing and work delivery modes. The study also showed where lawyers were getting the best usage out of AI: Law firms: 1. Drafting, 2. Summarization, 3. Document Review Legal departments: 1. Document review, 2. Summarization, 3. Drafting The survey was performed by independent research body RSGI Limited, and is linked in the comments. Oh... one additional thing: the survey was about Harvey. If that fact has changed the way you feel about all of the independent findings reported above, please ask yourself why. #legaltech #GenAI

One of the most interesting trends in legal right now is the growing crossover between AI companies and ALSPs. I think it’s a huge legal career opportunity. Legal AI companies are increasingly realizing the need to sell outcomes, not just their product. It’s one thing to buy software. Enabling your customers to use it well is another. Some legal AI companies are addressing this by acquiring or partnering with ALSPs – from managed service providers to flex talent platforms – to help implement their products and/or to combine it with talent who can use it to handle entire portfolios of work. The combo of AI + services isn’t just a legal industry trend. Even OpenAI recently launched a services arm. Companies need to buy impact -- and legal AI software companies may need a services arm to fully deliver that. The managed services value prop is expanding from cost-savings through offshoring lower complexity work to multiplying the efficiency of experienced lawyers paired with top-tier AI solutions to handle even complex work. On the flex counsel side of things, talent through platforms like Priori have been early adopters of AI. The flex talent model and the top-tier talent practicing this way are well-suited to help drive adoption and maximize headcount efficiency. I think all of this ultimately will mean a growing set of opportunities for legal professionals who want to work differently.

From Labor Arbitrage to Tech-Enabled Business Transformation: The Evolution of Managed Services In the early days of managed services, the value proposition was clear and simple: do the same work for less. Companies outsourced to cut costs—primarily through labor arbitrage. The model was transactional, delivery was often nearshore or offshore, and success was easily measured in cost savings. But that era is over. Today, leading managed services providers (MSPs) offer far more than cost reduction. They’ve become partners in tech-enabled business transformation—leveraging automation, agentic AI, advanced analytics, and deep domain expertise to improve outcomes, increase agility, and drive genuine business innovation. This shift didn’t happen overnight. It’s the result of both market demand and service provider evolution. What’s Driving the Change? 1. Enterprise Expectations Have Evolved Business leaders no longer see sourcing as just a procurement tactic. They expect partners to bring intelligence, technology, and insights—not just bodies. 2. Digital Maturity Among Providers Top MSPs have invested heavily in platforms, tools, and proprietary IP. Whether it’s AI-powered service desks or predictive analytics for IT operations, providers now come to the table with real tech capabilities. 3. Focus on Outcomes, Not Inputs The best deals today are built around business outcomes: reduced downtime, faster onboarding, better customer satisfaction—not just hours, tickets, or FTEs. 4. AI and Automation Are Table Stakes Generative and Agentic AI and intelligent automation have moved from experimentation to implementation. Providers that integrate these technologies into service delivery unlock real value. What This Means for Buyers As managed services evolve, sourcing strategy must evolve, too. That means: • Evaluating providers not just on price, but on platforms, collaborative innovation, and ability to co-create solutions. • Building contracts that focus on KPIs and tangible business outcomes—not just SLAs. • Looking at managed services as a lever for business transformation, not just efficiency. That’s the prime opportunity in front of every enterprise today.