Law firms are falling dangerously behind their clients on artificial intelligence adoption, according to a new report from legal tech vendor BigHand.
The findings echo a separate Deloitte Legal survey that revealed a substantial gap between legal departments and the law firms they instruct when it comes to AI use and expectations.
BigHand’s report, titled the Legal Workflow Leadership Report, focuses on the business operations side of legal practice and paints a troubling picture for firms resisting change.
While the report originates from a vendor with products to sell, its conclusions carry added weight given how closely they align with the independent findings from Deloitte Legal.
BigHand states directly that “this year’s findings reveal a growing gap in operational readiness for the AI age,” with most firms using AI in some capacity but few restructuring their workflows to support it.
The core problem identified is that firms are deploying AI tools without rethinking delegation models, roles, skill structures, or the underlying processes those tools are meant to improve.
BigHand found that “support team utilisation often remains unclear, and firms struggle to measure the true impact of AI on productivity, profitability and client service.”
The Deloitte Legal report identified a parallel issue, noting that AI demands a fundamental rethink of how legal services are priced and valued, yet many firms lack both the strategy and capability to act.
The commercial consequences are already materialising, with 95 percent of firms surveyed by BigHand reporting increased client attrition in the current environment.
Almost half of those firms say clients are questioning why fees have not fallen despite the widespread availability of AI tools that should be reducing the cost of legal work.
Forty-two percent of firms report clients are actively requesting alternative fee arrangements, a sign that the pressure from legal departments is shifting from expectation to direct demand.
BigHand concludes, in line with Deloitte Legal, that client expectations are rising, more legal work will be brought in-house, and in-house legal teams are reducing the number of panel counsel they retain.
The balance of power between law firms and their clients is shifting, with BigHand stating plainly that “the balance of power has shifted” in favour of corporate legal departments.
Stephen Embry, a lawyer and writer with over 30 years of experience in Biglaw, argues the message from both reports is unambiguous for firms that continue to resist meaningful change.
Firms that maintain what Embry describes as a “hide your head in the sand” culture on AI risk losing clients to more adaptive competitors and to expanded in-house legal teams.