AI is not transforming law firms: leadership decisions are
Leander Naicken, director at Morae, outlines the key leadership decisions that will determine which law firms thrive as AI becomes increasingly embedded in the legal sector
AI dominates discussions about the future of legal practice, yet technology itself is not what determines which firms succeed.
According to the Thomson Reuters Future of Professionals Report 2025, 80% of law firm professionals expect AI to fundamentally change how their firms conduct business over the next five years. Despite this, only 22% report that their firms have a visible AI strategy.
That gap is telling. Technology does not transform organisations. Leadership does.
The firms that will lead the next decade will not simply adopt AI faster. They will make better leadership decisions about governance, information, operating models, talent and strategy. AI is exposing long-standing weaknesses while creating an opportunity to rethink how law firms operate.
Governance before adoption
AI should never be implemented without clear governance.
Firms need policies that define acceptable use, confidentiality, accountability and human oversight. Clients continue to place their trust in lawyers, not algorithms.
Leaders should ask:
- Who remains accountable for AI-assisted legal work?
- Which tasks require mandatory human review?
- How do we ensure professional obligations are maintained?
These are leadership decisions, not technology decisions.
Information governance before AI
Many firms ask whether they are AI-ready. A better question is whether their information is governance-ready.
If one of your largest clients asked exactly where their confidential information is stored today, could you answer immediately? For many firms, the answer is no.
The challenge is not AI. It is decades of unmanaged information: legacy matter files, departed partner records, duplicate precedents, shared drives, email repositories, OneDrive folders and physical archives.
Most document management systems (DMS’) govern only part of the firm’s information landscape. The greater risk often exists within unmanaged or ‘dark’ data spread across multiple repositories.
AI simply exposes these weaknesses. Without trusted information, firms cannot expect trustworthy AI outputs.
Rethink the operating model
Technology also challenges how legal work is delivered.
One global firm demonstrated this through its approach to large-scale e-discovery. Rather than investing heavily in software and assigning highly paid legal professionals to document review, it partnered with specialist providers designed for that work. The outcome was not simply lower cost. It improved turnaround times, protected partner capacity for higher-value advisory work, maintained quality and strengthened profitability while delivering greater value to clients.
The lesson is broader than outsourcing. Leadership means understanding where your lawyers create the greatest value and designing an operating model that supports both profitability and client outcomes.
Develop exceptional lawyers before AI experts
The most important leadership responsibility is developing the next generation of lawyers.
GenAI can draft, research and summarise within seconds. These capabilities improve efficiency but introduce a significant risk.
If junior lawyers become dependent on AI before developing strong legal reasoning, they may lose the ability to recognise flawed analysis or inaccurate legal conclusions.
The danger is not that AI occasionally gets it wrong. The danger is producing lawyers who no longer possess the technical legal capability to identify when technology is wrong.
Technology will continue to evolve, making AI literacy an ongoing professional requirement. Legal judgement, however, is built through rigorous legal training, supervision, mentoring and experience.
This is supported by the LexisNexis Generative AI Report 2025, which found that 66% of lawyers would use AI more if they received additional training. The priority, however, is ensuring that training develops legal judgement alongside AI capability.
Lead differently
Within a few years, almost every law firm will have access to powerful AI. Technology will no longer be the differentiator. Leadership will.
The firms that outperform their competitors will use AI to make better business decisions, improve operational performance, understand profitability, strengthen client relationships and identify opportunities earlier.
Dynamic leadership means aligning technology with people, business processes and strategy. It requires leaders who understand both the opportunities and the responsibilities created by AI.
Legal transformation is therefore much broader than technology.
It is about transforming leadership, developing exceptional lawyers, strengthening governance, improving business processes and delivering greater value to clients.
Leadership will define the future
Every firm will soon have access to increasingly sophisticated AI. Not all of them will develop the leadership capability to translate that technology into sustainable competitive advantage.
The firms that succeed will not simply implement AI. They will make deliberate decisions about governance, information, operating models, talent and strategy.
This is an exciting moment for the legal profession.
We are not merely adopting new technology. We are redefining how law firms lead, how lawyers develop, how legal services are delivered and how value is created.
AI is changing the tools of legal practice. Leadership will determine its future.
