Daniel Farrar is the CEO of Assembly Software.
AI is no longer a futuristic concept for the legal industry—it is a present-day catalyst that is already empowering small and midsize law firms to scale their operations, expand their geographic reach and compete with larger firms. This shift is fueling an unprecedented wave of consolidation and innovation, creating a new class of “AI-powered law firms” that leverage technology to maintain competitive margins while rapidly expanding their capabilities.
Breaking Barriers: How AI Enables Small And Midsize Firms To Scale
Historically, small and midsize law firms have faced significant challenges growing beyond their local markets due to resource constraints and reliance on specialized expertise. Today, I have worked with an increasing number of firms that are using AI to help dismantle these barriers by automating routine tasks, enhancing legal research with predictive analytics and improving case management. These capabilities are allowing attorneys to work smarter and faster, saving significant time and reducing dependency on localized knowledge.
Data from my company’s customer base—roughly 75% small and midsize law firms—shows that “AI is creating unprecedented opportunities for growth and enabling firms to elevate their operations to a higher capacity.” Firms are now able to broaden their geographic footprint and diversify practice areas without the need for extensive localized teams.
This surge in productivity is driving a wave of mergers and acquisitions (M&As) as firms seek to accelerate growth and expand their market presence. According to LegalDive, “nearly two-thirds (64%) of business leaders plan to use M&A to bolster their AI capabilities within the next 12 months, with this figure rising to 70% over the next three years.”
Transforming Legal Service Delivery
AI is also revolutionizing how legal services are delivered. Dorna Moini, CEO of Gavel, forecasts that by the end of 2025, up to 90% of legal services will be provided through online platforms, driven by consumer demand and attorney adoption of technology. AI tools can streamline processes, reduce reliance on manual labor and increase transparency, making legal services more accessible and efficient. From my observations, this shift is supported by pressures from both supply and demand sides, pushing attorneys and clients toward digital legal products where the lawyer remains central to the process.
Practical AI Applications Driving Efficiency
Firms using AI report significant time savings—my company’s data shows that firms leveraging AI packages have saved the equivalent of 2.6 full-time employees per day. AI’s ability to quickly and accurately extract and summarize key document data can transform workflows, enabling attorneys to focus on higher-value tasks.
However, I’ve found that seamless integration of AI into existing case management systems is important to adoption. In my experience, firms benefit more from AI features powered by their own historical case data, which can enable immediate productivity improvements without the need for complex data migration or new system deployment. This approach can also help your firm maintain existing security governance and compliance standards, addressing common concerns about data privacy and protection.
Overcoming Common Concerns: Human Oversight And Job Security
Despite AI’s promise, many legal professionals fear job displacement and are uncertain about how AI can help them. A Forrester survey found that 36% of workers fear losing their jobs to automation or AI within the next decade. One way your firm can address these concerns is by reinforcing the “human-in-the-loop” principle—ensuring that AI assists rather than replaces attorneys, with humans maintaining oversight and final decision-making authority.
Investing in AI education and training is also important for building employee confidence and promoting AI as a skill enhancer that supports job resilience and future growth. For example, I’ve found that encouraging staff to trial AI tools in manageable, bite-sized steps can help ease adoption and dispel fears.
Actionable Considerations For Law Firms
If your firm is seeking to harness AI’s transformative power responsibly and effectively, I recommend taking the following steps:
• Adopt AI incrementally. Start with simple, high-impact tasks and integrate AI into existing workflows to minimize disruption.
• Maintain human oversight. Ensure that your human attorneys review all AI outputs to guarantee accuracy and ethical use.
• Prioritize data security. Understand vendor data policies, avoid sharing sensitive information on unsecured platforms and implement role-based access controls.
• Invest in training. Build AI literacy and promote a culture of continuous learning in your workforce to foster innovation and adaptability.
• Leverage AI-enabled case management. Use AI tools embedded in your current systems to maximize efficiency and maintain compliance.
• Monitor your vendor landscape. Choose stable, innovative AI providers and negotiate flexible contracts to adapt to market changes.
Looking Ahead
AI is no longer a distant promise but rather a present-day reality transforming the legal industry. Small and midsize firms that embrace AI strategically can unlock new opportunities for growth, innovation and competitive advantage. As the legal market evolves, I believe AI will remain at the forefront, enabling firms to expand their reach, enhance service delivery and thrive in an increasingly digital world.
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