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Report: Firms less scared of tech, more likely to adopt AI in 2024

More law firms will turn to AI in the coming years as the increased use of tech becomes key for talent retention and efficiency, according to a new report.

user iconLauren Croft 03 November 2023 Big Law
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Fifteen per cent of Australasian law firms plan to adopt artificial intelligence (AI) in the next 12 months, with 72 per cent of legal teams also set to expand, a new report from Dye & Durham and the Australasian Legal Practice Management Association has revealed.

The Changing Legal Landscape Industry Report surveyed 97 Australian law firms, 23 New Zealand law firms, and eight multinational firms operating across Australia, New Zealand and Singapore and predicted technology adoption would become a vital tool in helping law firms retain clients or attract new business. Twenty-nine per cent of those surveyed think AI tech would also be beneficial for their firms.

Dye & Durham Australia managing director Dennis Barnhart (pictured) said that this increased adoption would be driven by the rapid introduction and market penetration of new technology, coupled with increasing client demand and expectations for both delivery and pricing for legal services.


“Adopting technology is fast becoming a competitive edge in client acquisition and retention,” he said.

“Firms that are agile, nimble, and proactively embrace tech innovations are likely to see quick wins.’’

The survey was conducted between 13 July and 4 August 2023, and over two-thirds (71 per cent) of all survey respondents were from SME firms with two to 75 total employees. Nearly half (47 per cent) of respondents were from small firms of two to 25 employees, or were sole practitioners. Sole practitioners represented 8 per cent of the survey respondents, which is representative of a very small proportion of this market segment, according to the report.

Eighty-one per cent of these respondents credited technology for improving their work/life balance, with fear of change dropping from 31 per cent in 2022 to just 9 per cent in 2023. Barriers to technology adoption have also lessened over the past five years, with concerns about time and resources dropping from 61 per cent in 2018 to 33 per cent in 2023.

“Whilst the majority of respondents did indicate that technology improved their work/life balance, 4 per cent indicated that technology greatly interrupted their work/life balance. This was seemingly most common within the executive and general manager group,” the report noted.

“The greatest challenges for firms in adopting new technologies are time and resources cost (23 per cent) and lack of knowledge (16 per cent). We have tracked these barriers to technology adoption since 2018, and this year sees a widespread reduction across all barriers. In particular, since 2018, time and resources has decreased from 60 per cent, and fear of change has decreased from 31 per cent in 2022 to just 9 per cent in 2023. This certainly indicates that the attitude within firms towards technology has changed over the past four years as firms become more confident in using technology and leveraging its benefits.”

Around three-quarters of all respondents work at organisations that use document or practice management solutions, with more than half using e-signing, scanning and time-recording technology.

Electronic signing technology leads the pack as the most likely technology to be adopted in the next year (57 per cent), followed by practice management software (54 per cent), document management software (52 per cent), and precedent generation software (48 per cent).

The report found that 63 per cent of those surveyed believed technology facilitating precedent generation would be beneficial to their firms. In addition, it predicted that core technology platforms would remain “strongly adopted in the coming year”.

Respondents to the survey were more concerned about the impact of AI or large language models on Australasian legal professionals in general (47 per cent) rather than the impact on themselves (35 per cent).

“The use of technology as a value add-on for clients has declined from 2019 survey results; however, [it] has increased in use between 2022 and 2023 by 6 per cent. This trend is expected to continue, with 51 per cent of respondents indicating that they expect to have technology value-adds for clients within the next year. Furthermore, 68 per cent of respondents believe that technology advancements would be beneficial to clients,” the report stated.

“With the rapid introduction and market penetration of new technology coupled with increasing client demand and expectations for both delivery and pricing for legal services, plus an increasing level of comfort by firms to use AI over the coming years, we may see that technology adoption quickly becomes a competitive advantage to attract and retain clients in the future. Firms [that] are agile, nimble and proactive in this space may see quick wins.”