People, technology, and profits: The top investment priorities for law firms

As recently reported, Australian law firms are placing a stronger emphasis on accuracy and lawyer-verified outputs when using artificial intelligence.

It was also found that firms view pay, training, and technology as the top three investment priorities to increase profits.

Specifically, 53 per cent of firms ranked compensation among their top three investment priorities to increase profitability, with 38 per cent ranking it as the top focus.

Meanwhile, AU/NZ firms reinforce a larger emphasis on pay, with 44 per cent citing compensation as their number one priority, higher than the US/CA (39 per cent) and the UK and Ireland (32 per cent).

People investment turning into profits

Law firms are focused on people-centred investments, with compensation and professional development among the leading aspects of increasing profitability.

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Ranking at the top of the global investment priorities is compensation, while flexible work and employee wellbeing are also being widely appreciated.

Globally, 45 per cent of firms have invested in flexible work arrangements, while 42 per cent have implemented competitive salaries and 40 per cent have invested in training.

AU/NZ firms lead in flexible work arrangements, with 55 per cent already adopting them.

In the report, a partner at an Australian firm stressed the importance of putting the mental health of staff before focusing on anything else.

“Focus on your staff first. Their wellbeing is the top priority for creating a healthy and sustainable business. The profits will flow from that,” the spokesperson said.

Investments in mental health and wellbeing have been rolled out by 33 per cent of firms, indicating an increase in recognition of employee assistance as a critical aspect of a sustainable operation.

Agile Market Intelligence director Michael Johnson recognised the importance of work flexibility, alluding to Australia and New Zealand as being the pioneers of this notion.

“It’s encouraging to see firms following through on flexible work, particularly in AU/NZ, where adoption is leading globally,” Johnson said.

“The next step is ensuring that investments in technology and capability keep pace, so firms can fully realise the productivity and performance benefits of a more flexible workforce.”

Technology investment supports productivity

Technology and workflow automation are at the top investment priorities recognised by legal firms seeking to improve profitability.

However, the report highlighted a gap between the number of firms identifying technology as a top focus and those that have already introduced technology enhancements.

Just under two in five of firms believe that investing in technology can boost profitability, while 34 per cent have already rolled out technology and tool improvements.

Technology is cited by 39 per cent of firms as an investment priority, making it the third-highest global priority after compensation and professional development.

In Australia and New Zealand, 8 per cent of firms identified technology as their top investment focus, in comparison to 16 per cent in the USA and Canada and 10 per cent in the United Kingdom and Ireland.

Looking at how talent strategy and technology intersect across regions, Johnson highlighted the critical integration across pay, capability, and long-term efficiency.

“As competitive pay continues to play a key role in attracting and retaining talent, firms have an opportunity to further strengthen performance by investing in training and technology,” Johnson said.

“In AU/NZ, where pay is a clear priority, increasing focus on capability building and digital enablement can unlock additional gains in productivity and scalability.”