Innovation divide: Why small law needs its own playbook for AI adoption

I recently attended the inaugural Women + AI APAC Summit in Sydney, and what struck me most wasn’t the tech, but the divide it’s exposing: a growing innovation gap between BigLaw and smaller firms in how they are navigating AI adoption, implementation, and governance.

While AI tools are technically available to everyone, access is not the same as equity. Large firms benefit from deep internal resources – specialist knowledge teams, innovation leads, dedicated budget lines, and early or exclusive access to cutting-edge tools. Often, entire departments are set up to assess risk, implement strategy, and draft robust governance frameworks.

By contrast, small firms and solo practitioners often operate with constrained budgets, limited internal tech expertise and no vendor leverage. More critically, they must often retrofit AI policies and ethical frameworks after tools are already in use (if at all).

This creates two key fault lines in the legal sector:

1. A tech equity gap where BigLaw shapes the narrative and drives the uptake. Ironically, this means that the very firms that could benefit most from efficiency-driving tools are the least equipped to adopt them.
2. Systemic risks where ineffective or token guardrails may inadvertently expose legal practitioners to privacy leaks, biased decision making, ethical blind spots and breaches of professional duties.

For AI innovation to be meaningful and safe across the profession, we must acknowledge that resourcing matters and that small law needs a very different playbook to engage with AI ethically and effectively.

The advantage of small law: Agility over bureaucracy

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BigLaw’s scale does come with its own cost. New tech must pass through layers of red tape. Steering committee sign-offs, board reviews, stakeholder consensus, AI coaching for decision-makers – every step is process-heavy.

Small firms, in contrast, aren’t tied up by this bureaucratic machinery. They can move fast. They’re agile. Decisions are made by the people who are close to the work, close to the pain points, and therefore close to the solutions.

This speed and flexibility mean that small teams can trial a tool over lunch, pivot in a week, and refine in real time. This nimbleness is a genuine competitive edge, if paired with strategy.

The small law AI playbook: Practical, tactical, purposeful

So what does an AI playbook for small law actually look like? Here are some ideas.

1. Find your champions: Identify the AI-curious, tech-positive people in your team. Give them permission (and “innovation hours” away from their billable targets) to play, experiment and learn.

2. Define the problem you’re trying to solve: Be strategic, not distracted by the buzz. This means starting with your problem, not the tech. What’s the biggest friction point in your workflow? What’s draining your time? AI might help, or maybe a humble automation tool is the better fit. Be open to the answer.

3. Design low-stakes pilots: Run small experiments with clearly defined goals. Choose a narrow use case, define success metrics, and set failure boundaries.

4. Leverage free resources and make it a team effort: Attend webinars or online events. Ask vendors for free demos and bring your team together for lunch, learning and exploration. Build and embed a culture of learning and experimentation.

5. Choose vendors with care: Look for tools that are:

o Compatible with your current tech stack.

o Easy to use and love (yes, your team should love using the tool; otherwise, your ROI will be dead on arrival).

o Purpose-built by people who understand your legal practice area (or have consulted deeply with those who do).

o Willing to offer a trial period or flexible pricing for smaller firms.

6. Don’t just budget – future-proof: Consider not just the immediate implementation costs of the tool but your sustainability costs. What will it take to maintain, update, and troubleshoot? Who in your firm will carry that load?

While all this may sound overwhelming, the good news is you’re not too late; you’re just early enough. The tech is still glitchy and a bit wild. So, while BigLaw does the expensive, slow work of experimentation and refinement, small firms can use this time constructively by building AI fluency, cleaning up data, and setting the right team culture. So that when the tools are ready, you’ll be ready too.

Governance and risk: Move fast, but protect what matters

We’ve all heard of the risks of using new AI tools: data breaches, rogue results and compliance blind spots. And while the risks are real, they shouldn’t be paralysing.

Because the risk of doing nothing may be greater than the risk of experimenting. It just needs to be done with purpose and protection.

Start with:

• A clear risk appetite statement: Are you willing to trial bold new tools? Or is your firm more cautious? Define your comfort zone up front.
• Clarify your accountabilities: Who is responsible for vetting tools? For training your team? For protecting client data and spotting accountability gaps in AI output?
• Build lightweight but real compliance guardrails: Use them as scaffolding, not shackles. And revisit them as you scale. Make sure governance grows with your experiments.

Good governance is not the enemy of innovation. It’s the enabler of safe experimentation. But to make it work, small law needs its own roadmap – one that plays to its strengths, not its limitations.

The power of a different playbook

BigLaw is resourced but slow. Small law is agile but under-equipped. To bridge the innovation divide, small firms must follow a different playbook – one built on strategic pilots, cultural buy-in, vendor smarts, and risk-aware governance. Because this isn’t about catching up to BigLaw. It’s about charting a smarter, faster path forward.

Talya Faigenbaum is the director and principal of Nest Legal.