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Only 5% of mid-size firms have a ‘comprehensive’ level of AI maturity, report says
The vast majority of small and mid-size firms aren’t implementing AI and other emerging tech as much as they could be, new research has revealed.
Lauren Croft
Actionstep has released its second annual 2025 Australian Midsize Law Firm Priorities Report, which reveals a number of key insights into the mid-size legal sector across the country.
The research, conducted in partnership with Agile Market Intelligence, surveyed 400 legal professionals from mid-size law firms with 20 to 250 employees. The study included a variety of practice areas, roles, and generations and explored what success looks like in mid-size firms, said Actionstep global president David Hepburn.
“As law firms adapt to changing client expectations and grapple with the fast pace of technology advancements, our research highlights the importance of understanding what truly drives success – whether it’s leveraging the right talent, optimising processes, or utilising technology in ways that align with the firm’s goals,” he said.
“Through this report, we aim to provide actionable insights that help firms achieve those outcomes in 2025 and beyond and hope the findings inspire new ideas and strategies. By exploring the report, firms can take advantage of its insights to benchmark performance, refine strategies, and prepare for the challenges and opportunities ahead.”
In terms of top priorities for mid-size firms, digital transformation and technology was ranked as a number one priority by 55 per cent of respondents, with improving client satisfaction being number one for 71 per cent.
However, according to the report, only one in 20 mid-size firms (5 per cent) said they had achieved a “comprehensive artificial intelligence maturity level”, with the majority recognising that there were weaknesses in their firms’ digital capabilities.
While 66 per cent of respondents indicated some AI usage, the vast majority have yet to embed these tools deeply into their workflows, with data privacy (66 per cent), ease of use (62 per cent) and integration issues (45 per cent) posing key barriers to AI adoption. Larger mid-size firms were also revealed to be embracing next-gen technologies at a faster rate than smaller or boutique mid-size firms.
The most common core challenge for mid-size firms is currently that employees are too time-poor to properly drive exceptional client experience, with 74 per cent of respondents confirming that workload and time limitations are a primary challenge. Only 41 per cent responded positively when rating their firm’s digital client experience, including client portals and automated communications – and 59 per cent said there were weaknesses in their digital tools.
Despite this, mid-size firms aren’t yet looking at how automation tools can help – with only 38 per cent identifying automation tools as “a core factor in improving their efficiency” and only 6 per cent planning for automation tools to be top priority moving forward.
“The data points to significant time pressures impacting client service, yet the adoption of tools that could alleviate these issues is notably low. By continuing to de-prioritise automation, firms risk missing a crucial avenue for operational improvement and may ultimately find themselves falling behind in delivering the timely, efficient service clients expect,” the report said.
Additionally, just 12 per cent of mid-size boutique law firms are prioritising technology to improve client experiences, with 24 per cent of full-service firms and 22 per cent of multi-practice firms prioritising technology to enhance the client experience or streamline client interactions.
“Despite strong attention on client satisfaction and talent retention, mid-size law firms appear less inclined to leverage technology specifically for client expansion,” the report said.
“This suggests that, while firms recognise the value of technology in general, they may be unaware of the impact technology has on delivering exceptional client service or there is a belief among law firm professionals that the perceived value of client service and individual expertise go hand in hand.”
To meet client service aspirations, mid-size firms should be investing in technology in smarter ways, with one respondent recommending “smoother integration of software and practice management systems to catch up with the capabilities of the legal environment and digital age” and another stating their firm needed to “place more importance on adopting cutting-edge legal technologies and automation tools to streamline workflows and improve collaborative efficiencies across our teams, ensuring exceptional client service outcomes”.
Lauren Croft
Lauren is a journalist at Lawyers Weekly and graduated with a Bachelor of Journalism from Macleay College. Prior to joining Lawyers Weekly, she worked as a trade journalist for media and travel industry publications and Travel Weekly. Originally born in England, Lauren enjoys trying new bars and restaurants, attending music festivals and travelling. She is also a keen snowboarder and pre-pandemic, spent a season living in a French ski resort.
