Deloitte’s latest global survey of more than 100 senior legal leaders shows that the legal profession has passed the AI experimentation stage. The conversation is no longer “Should we use AI?” but “How do we get real value from it?” The report is aimed largely at corporate legal departments, but its findings have major implications for private law firms.
The most striking statistic is the speed of adoption. In Deloitte’s 2024 survey, 76% of organisations had not adopted AI. By 2026, only 2% reported no AI adoption, while 61% were actively deploying AI across legal work. AI has moved from pilot projects into everyday legal practice.
Investment is increasing rapidly. Nearly 80% of legal departments increased their AI budgets, with an average year-on-year increase of 67%. However, Deloitte warns that many organisations are spending too much on software licences and infrastructure, while underinvesting in staff training, knowledge management and redesigning legal processes. Simply buying AI tools will not deliver the expected return on investment.
For law firms, this is an important lesson. Many firms are experimenting with ChatGPT, Copilot or specialist legal AI products, but few have formal policies, structured training or clear workflows. Firms that combine technology with staff development and process improvement are likely to gain the greatest competitive advantage.
The report predicts that around 28% of legal work could be automated within the next two to three years. This does not mean lawyers disappear. Instead, routine drafting, document review, legal research, summarisation and contract analysis will increasingly be handled by AI, allowing lawyers to spend more time advising clients, negotiating, appearing in court and solving complex legal problems.
One of the biggest changes will be the type of work clients expect from law firms. Corporate legal departments increasingly want:
- Faster turnaround times
- Lower legal costs
- Better risk analysis
- More strategic advice rather than administrative work
Deloitte found that 66% of legal departments want to bring more work in-house, supported by AI. This means law firms will face stronger competition, not only from other firms but from clients using AI themselves.
Pricing is another area likely to change dramatically. Eighty-five percent of respondents believe AI will significantly change how legal services are priced. Deloitte predicts that reliance on traditional hourly billing could fall from 72% today to 44% within two to three years, with clients increasingly expecting fixed fees, value pricing and outcome-based billing.
This could become a competitive differentiator. Clients will increasingly question why they should pay for ten hours of work if AI enables the same result in two hours. Firms that embrace transparent pricing and demonstrate how AI improves quality rather than simply reducing costs are likely to strengthen client relationships.
The report also highlights significant workforce changes. Rather than employing fewer lawyers, most organisations expect different lawyers. Future legal teams will need stronger AI literacy, technology skills and adaptability. New roles such as legal engineers, knowledge engineers and AI-enabled legal operations specialists will become increasingly common. Surprisingly, 84% of organisations have not yet redesigned their jobs or career paths to reflect these changes, suggesting many firms are still unprepared.
Another emerging trend is agentic AI, AI systems capable of carrying out multi-step legal tasks with minimal human intervention. Already, 61% of legal departments are piloting or experimenting with agentic AI, suggesting the next wave of legal technology will go far beyond simple chatbots and document drafting.
Perhaps Deloitte’s strongest message is that successful AI adoption is about transformation, not technology. The leading organisations invest equally in governance, data quality, staff capability, knowledge management and process redesign. AI is treated as a business transformation programme rather than another IT purchase.
What this means for law firms
The report reinforces a reality that is already becoming evident locally. South African firms should not assume AI is a trend affecting only large international practices. Corporate clients in South Africa are reading the same reports, adopting the same technologies and beginning to expect the same efficiencies.
The firms that will succeed over the next five years are unlikely to be those with the most expensive AI software. They will be those that train their people, redesign their workflows, establish sensible governance, rethink pricing and demonstrate measurable improvements in speed, quality and client service. Deloitte’s conclusion is simple: AI is no longer optional. The competitive advantage now belongs to firms that learn how to use it strategically rather than merely experimenting with it.
Link to the full report:
https://www.deloitte.com/nl/en/services/legal/research/ai-imperative-reshaping-of-the-legal-industry.html
