By Daniel Farrar, CEO, Assembly.
Artificial intelligence is no longer just a tool for automating day-to-day tasks in the legal industry – it’s a transformative force reshaping how small and mid-size law firms operate, grow, and compete. In 2025, I see AI acting as a powerful accelerant for ‘Small Law’. We’ve already seen across Assembly’s customer base, roughly 75% of which comes from small and mid-size law firms, that AI is creating unprecedented opportunities for growth and enabling firms to elevate their operations to a higher capacity.
Small (and Smaller) Law Plays Big
AI is breaking down traditional barriers to growth and enabling small law firms to expand both geographically and in areas of practice expertise. While tools like SaaS platforms and virtual teleconferencing have already made it easier for firms to work with geographically diverse employees, AI is taking this a step further. AI’s predictive capabilities are revolutionizing the practice of law by making lawyers more productive and efficient.
AI is saving significant amounts of time, helping attorneys adapt to regional case law, and improving their ability to understand factual knowledge and context. Day-to-day task management is becoming easier, and firms are accomplishing more than ever before. This increased efficiency is enabling firms to scale without relying as heavily on localized or specialized attorneys and is fuelling a wave of expansion by firms to pick up new areas of practice or new geographic locations where they are underrepresented.
The legal industry is already seeing the effects of this transformation. According to Law360, as many as 5,000 US law firms are actively pursuing acquisitions to expand their footprint. While large law firms have already been active in M&A, I expect smaller firms to step up aggressively in 2025 to expand their regional footprints and augment or diversify their practice areas. AI is fueling these aspirations by providing the tools firms need to grow and thrive in a competitive market.
Talent Acquisition and the Development of In-House AI Leadership Roles
AI is now being used by approximately 80% of law firms in the US and firms are recognizing that the new crop of lawyers entering the workforce are better prepared to adapt to the new technologies necessary to even the playing field or gain a step on their competition.
The rise of Millennial and Gen Z legal professionals, often called next-gen lawyers, is reshaping the legal landscape. These tech-savvy individuals are keen to harness advanced technologies to boost productivity, streamline case management, and propel business growth.
A recent study highlighted that by 2025, Millennials will make up 75% of legal department employees, dominating the workforce. Law firms must stay agile and embrace legal tech innovations to attract and retain top talent. Firms that fail to adapt risk losing these forward-thinking professionals to competitors who prioritize technological advancement.
Additionally, as AI tools continue to evolve and gain traction in the legal industry, law firms recognize the need for specialized roles to guide the adoption and strategic use of these technologies. To effectively implement and manage AI, firms are creating dedicated positions such as Chief AI Officer, Director of AI Strategy, and Head of Legal Technology. These roles are crucial in helping firms navigate the complexities of selecting and applying AI tools, managing the adoption process, and ensuring proper governance to maximize AI’s potential.
AI is Driving the Small Law Economy
AI is now a driving force behind economic efficiency for smaller law firms and those that embrace AI are gaining a significant edge, while those that resist the change risk being left behind. Yes, AI is helping automate day-to-day tasks and enabling lawyers to work smarter and more effectively, but the outputs of AI are only truly starting to be visualized. We’re seeing that by using AI for workflow components such as document generation and drafting, research and legal review, contract review and risk assessment and timekeeping and billing. The Future of Professionals Report predicts that AI could free up 4 hours of a legal professional’s time per week. For U.S. lawyers alone, the savings could translate into 266 million hours of increased productivity – approximately $100,000 in new billable time per lawyer each year. We’ve also seen across the Neos platform that firms using our AI packages have reported the equivalent of 2.6 employees’ time savings per day on average.
Conclusion
AI isn’t some sleeping giant in the legal field – it’s already here, fuelling growth, innovation, and consolidation. For small firms willing to embrace the opportunities AI provides, the future is bright. The legal industry is evolving rapidly, and AI is at the heart of this transformation, enabling firms to diversify, expand, and thrive in ways that were previously unimaginable.
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[ This is an educational guest post written by Assembly for Artificial Lawyer. Thanks to Daniel Farrar for this. ]
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