Legal Industry Tech Spending Climbs 9.7% Amid Rising AI Adoption
Law firms increased technology spending by 9.7% in 2025, focusing on AI.
Why it matters: Rising client expectations and economic pressures are accelerating legal tech adoption, impacting profitability and operational models in law firms.
- Am Law 100 firms saw profits per lawyer increase 53.7% since 2019, reflecting greater efficiency and value delivery.
- Law firm technology spending grew 9.7% in 2025, prioritizing AI tools to streamline workflows and improve client service.
- 63% of mid-sized law firms now use generative AI tools like Microsoft Copilot, despite 81% of leaders citing AI reliability concerns.
- Thomson Reuters’ Raghu Ramanathan highlights adjustments in business models, with firms balancing technology adoption and new pricing strategies.
Legal firms are accelerating investments in technology to adapt to heightened client demands and operational pressures. According to Thomson Reuters, profit per lawyer at Am Law 100 firms rose 53.7% since 2019, indicating improved efficiency driven partly by technology upgrades.
Technology spending in law firms increased 9.7% in 2025. The main focus is on artificial intelligence tools that automate routine tasks and enhance client interaction, a shift highlighted in recent analysis by LawNext. Generative AI adoption, including tools like Microsoft Copilot, now reaches 63% of mid-sized firms.
Despite this adoption, 81% of legal leaders express concerns about AI reliability and ethical risks, reflecting a cautious approach as firms balance innovation with risk management.
Raghu Ramanathan, Chief Economist at Thomson Reuters, underscores that technology alone doesn't guarantee success. Firms are revisiting business models, combining tech-driven efficiency with alternative pricing strategies or partner-led, specialized practices to meet evolving client demands effectively.
This strategic evolution echoes broader industry trends where client expectations for transparency, value, and innovation are reshaping legal service delivery. Independent analysis, such as from Elevate, confirms the legal sector is at a critical inflection point demanding new operational approaches rather than incremental changes.
By the numbers:
- 53.7% — profit per lawyer increase at Am Law 100 firms since 2019
- 9.7% — law firm technology spending growth in 2025
- 63% — mid-sized law firms using generative AI tools
Yes, but: While technology spending and AI adoption are rising, significant concerns around AI reliability and ethical implications persist among law firm leaders, indicating cautious integration.
What's next: Law firms will continue balancing AI deployment with risk management and new pricing models, with further adoption expected as tools mature.