The year 2025 has, undoubtedly, been a year of change – marked not just by how much has shifted in the last 12 months, but also in realising just how much the landscape may still evolve. Such developments paint a fascinating picture for the coming year and beyond, writes Jerome Doraisamy.
As we reach the halfway point of this decade, it is extraordinary to think how much the business and practice of law has moved on from pre-pandemic times.
While the age of COVID-19 accelerated existing trends, facilitating the mainstreaming of flexible working arrangements, broader market factors (from inflation and the cost-of-living crisis to new employee expectations and demands) have also spurred shifts in how professional services entities manage their businesses, workforces, and clientele. This is all before one even gets to the extraordinary developments we’ve witnessed on the technology front.
To this end, the legal services marketplace in Australia looks vastly different compared to five years ago. By 2030, who knows how unrecognisable certain aspects of legal practice could appear?
Where to next for the mid-market?
Speaking a few months ago on an episode of Legal Firesides, HPX Group CEO and Hamilton Locke managing partner Nick Humphrey said he believes that the mid-market in law is what “will get shaken up the most” in Australia in the near future.
There’ll be a “proliferation” of small or boutique firms, with one or two partners: “They’ll be very specialised niche offerings, almost no back office at all, maybe a secretary and a laptop and off they go,” he suggested, and at the other end of the spectrum, “there’ll be a lot more acquisitions, a lot more global alliances” between larger law firms.
Humphrey’s supposition rings true when observing firm developments in the past year or so. We’ve witnessed a bounty of boutique firms being launched across the country since the start of the year, including numerous practices launched by former BigLaw partners, and at the big end of town, the mergers between Herbert Smith Freehills and Kramer Levin, Ashurst and Perkins Coie, and Allen & Overy and Shearman Sterling the prior year all speak to a trend towards more global behemoths (the recently announced decoupling of King & Wood Mallesons bucks this trend, of course).
Such an “hourglass effect”, as Humphrey put it, means that mid-market practices “need to figure out how they will attract and retain their talent”.
“When you’ve got the top end coming in offering lots of money, you’ll have private equity-backed law firms offering real equity, and then you’ll have the allure of just not having any of the politics and just being independent.
“Mid-market firms will be fighting at all levels,” he said.
“How do they differentiate? What’s their clear strategy, kind of around technology and AI, but what’s their talent strategy? How are they going to differentiate and retain talent, particularly when those sort of younger generations are very mobile and entrepreneurial?”
Humphrey is right to suggest that the mid-market is set to be shaken up. In 2026 and beyond, it will be fascinating to see how the mid-market responds to this hourglass effect. How will such firms, whose numbers will typically range from a few dozen to several hundred, look to differentiate with pricing and service offerings, use of new technologies, and worker experience?
Best practice amid the rise of new technologies
It is well established at this juncture that a lawyer’s use of technology is inextricable from future success, both in terms of client service delivery and vocational longevity. Practitioners nationwide have long been told about the breadth of time to be saved by use of emerging products, the capacity to foster deeper, more meaningful relationships with key stakeholders, and outpace those colleagues whose reticence prevents them from moving with the times.
Broadly speaking, and while there remain holdouts, it has been very encouraging to see practitioners embrace such new ways of working and push back on perhaps archaic perceptions of being a conservative profession that is stuck in its ways.
What is less inspiring, however, is the number of lawyers who have been referred to relevant legal regulators, or faced dressings-down in court, over reliance on materials generated by artificial intelligence, and – in at least one case – use of “non-existent” citations and quotes. One lawyer has faced sanctions for using GenAI to submit hallucinated materials.
In a recent speech, the Chief Justice of NSW, Andrew Bell – who has been particularly vocal in advocating for best practice in the age of AI – said that lawyers who are caught relying on hallucinations in their submissions “are at best incompetent and at worst, dishonest”.
“Either way, it presents fundamental difficulties for judges who rely on the competence and integrity of lawyers to assist them in the discharge of their judicial responsibilities,” Chief Justice Bell said.
Attorney-General Michelle Rowland said, at Lawyers Weekly’s Australian Law Forum, that “it is incumbent on those of us who seek to unlock the benefits of AI to confront these issues squarely so that Australians have confidence in AI, and confidence in our system using AI”.
The legal tech evolution is not frozen in time: speak to any legal tech vendor, and they will tell you how fast new technologies are evolving. That is, what one uses products and services for today may well shift in the very near future, and then again soon after that. To this end: it is absolutely essential that practitioners not only ensure they are upskilling on emerging tech and keeping abreast of developments, but that they are taking a prudent and diligent approach in using it.
Such a mindset, and practical approach, is fundamental: not just for the sake of one’s clients but also for one’s professional obligations.
Appreciating Gen Z amid generational differences
During the pandemic days, a stark divide between generations in legal workplaces was the willingness or otherwise of lawyers to attend the office. Those at the partner level told Lawyers Weekly, at the time, that they feared for the younger generations’ ability to learn by osmosis if in-person work was less frequent, by virtue of missing key “water cooler conversations”.
Ironically, the script seems to have flipped in recent times: older practitioners appear more adamant about working from home – perhaps because they now can, having not experienced such a luxury earlier on in their careers – whereas the next generation is keen to come in.
This is but one example of pervasive generational divides that Lawyers Weekly keeps hearing about – which may well worsen in a time of more generations in the workforce than ever before, but also given the rise of what could be termed the “self-aware employee”.
Workers from Generation Z have, in recent times, been painted with the broad brush of being lazy, entitled, or overly demanding. Leaders both inside and outside of law would have either experienced or witnessed this.
What may be a kinder or more appropriate interpretation of how much more forthcoming younger lawyers are is that they are more self-aware than their predecessors.
Having grown up in the digital age, Gen Z has more access to information and viewpoints (and is more adept with it) than any generation before it, has witnessed huge shifts in workplace dynamics and environments (such as the introduction of the Right to Disconnect laws), and has arrived in the legal profession at a time when optimal individual and workplace wellness is of considerable importance. To this end, it is perfectly understandable for them to expect, if not demand, clearer boundaries for work/life balance, and seek greater clarity on their vocational progression and prospects.
If one accepts that such attitudes are more about self-awareness than immaturity, or entitlement, or laziness, then one is better placed not only to better work with and accommodate the idiosyncratic needs of younger workers but also to evolve as a leader in a changing market.
(This is not to say, of course, that leaders do not have legitimate gripes with the attitudes of some of those coming through the ranks, nor does it mean that the older generation must cave on every point. It is simply to say that the disconnect between generations can be bridged if one comes from a place of empathy and understanding, rather than drawing lines in the sand.)
As such, the questions for senior practitioners moving forward will be: what kind of leader do you want to be? And what is the best way for you to get the most out of your workforce? In the face of marketplace shake-ups and a proliferation of constantly shifting technology, leading your teams in the right ways will be more important than ever before.
Looking ahead
Amid a myriad of trends to reflect upon and keep an eye out for in the new year, the abovementioned trio strike me as being particularly pertinent in shaping not only the direction of legal services Down Under for the rest of this decade but also in what the business of law will look like.
Speaking about his own firm on Legal Firesides, Humphrey mused that “agility’s been our friend”. For practitioners and business leaders across the profession, such a sentiment may well ring true this time next year.
Jerome Doraisamy is the managing editor of professional services (including Lawyers Weekly, HR Leader, Accountants Daily, and Accounting Times). He is also the author of The Wellness Doctrines book series, an admitted solicitor in New South Wales, and a board director of the Minds Count Foundation.
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