Clio’s 2025 Legal Trends for Mid-Sized Law Firms report has revealed that more mid-sized firms are integrating AI than ever, as well as leveraging more billing strategies, charging higher rates, and embracing fixed fees to meet client demand for predictable pricing.

The rapid adoption of AI was a key trend in the report, with 93 per cent of mid-sized and sole practitioners now incorporating AI into their operations – over half (51 per cent) of them adopting it widely or universally. Not only are mid-sized firms significantly more likely to have embraced AI than smaller firms, but their adoption is also more comprehensive. While 72 per cent of smaller firms are using AI in some capacity, only 10 per cent have adopted it extensively, highlighting a significant gap in technology utilisation.

Legal professionals at mid-sized firms identify the top benefits of AI as enhancing efficiency (43 per cent), improving work quality (38 per cent), and managing caseloads more effectively (37 per cent). Popular AI tools include AI-powered legal research (66 per cent), generic non-legal AI tools (65 per cent), and document automation (60 per cent), which are proving instrumental in enhancing productivity and client engagement.

Looking ahead, more than 80 per cent of legal professionals anticipate AI usage will continue to grow over the next 12 months. Mid-sized firms with more than 150 employees are also more likely to believe that AI tools can help them grow their business, according to the report.

VIEW ALL

“The widespread adoption of AI is reshaping the legal industry, offering opportunities for firms to increase efficiency, enhance client engagement, and scale operations. But with these advancements come challenges – and adopting AI strategically will be crucial for mid-sized firms that intend to thrive in this rapidly evolving landscape,” the report said.

“Among mid-sized firms, in particular, AI has become the norm. If your mid-sized law firm has not yet adopted AI, you may already be finding yourself outpaced by AI-enabled legal service providers. In other words, there’s never been a more crucial time for mid-sized firms to adopt AI.”

For the first time in the report, the research also broke down hourly rates by firm size, revealing differences in how mid-sized and smaller firms price their services. A massive 99 per cent of mid-sized firms use multiple billing rates for their lawyers, compared to 85 per cent of smaller firms. On average, mid-sized firms apply eight different hourly rates for lawyers and nine for other legal professionals, while smaller firms rely on just three.

Mid-sized firms are also charging higher rates with greater variability, with a $400 gap between their highest and lowest hourly rates – far exceeding the $250 gap seen in smaller firms. This signals a more sophisticated, revenue-driven approach to billing that could reshape industry pricing standards, according to Joshua Lenon, a lawyer in residence at Clio.

“Mid-sized law firms are taking a more strategic approach to pricing – leveraging multiple rates to align with client needs and maximise profitability,” he said.

“Firms that rely on a one-size-fits-all model risk undervaluing their services and missing key revenue opportunities.”

Mid-sized firms were also revealed to be moving away from traditional hourly billing models, increasingly offering fixed fees and subscription-based pricing structures. According to the report, 64 per cent of mid-sized firms now offer flat fees, and 27 per cent said they were adopting subscription models. Additionally, 82 per cent of firms that offer fixed fees apply them to entire matters, while 41 per cent use them for specific activities within a matter.

Mid-sized firms, according to the report, are also making continual investments in software, dedicating 2 per cent of their expenses to technology – nearly double the industry estimate in the US. Popular solutions include cloud-based storage, video conferencing, e-signatures, online payments, accounting software, and cloud-based practice management software. However, despite this commitment to modern tools, only 38 per cent of mid-sized firms are utilising legal practice management software, significantly trailing behind the 71 per cent adoption rate seen among smaller firms.

This gap highlights a disconnect, added Lenon.

“Mid-sized firms are making big tech investments, but not always in the right places,” he said.

“They’re spending big on software, yet only 38 per cent use legal practice management software – the backbone of an efficient firm. The takeaway is clear: technology alone doesn’t drive innovation. It’s how you integrate it that matters.”