Australian law firms are increasingly looking to artificial intelligence to lift productivity and profitability, but new research suggests adoption in Australia is trailing other markets, potentially widening performance differences across the profession.
The findings come from LEAP Legal Software’s Profitability in Law: Global Report 2026, based on a survey of 700 legal professionals across Australia, New Zealand, the UK, Ireland, the US and Canada. The survey included 219 respondents in Australia and New Zealand and was conducted between 10 and 28 November 2025.
According to the study, 16% of Australian respondents use legal-specific AI daily or as part of core workflows, compared with 49% globally. More than half (57%) of global respondents reported regular use of integrated AI solutions, compared with 37% in Australia.
Trust also emerged as a barrier locally. The report found 32% of Australian respondents reported low or no trust in AI integration, which the study said was the highest of any region surveyed.
Despite this caution, respondents identified practical applications for AI in legal work. Document review and analysis was cited as a key AI use case by 54% of Australian respondents, while 49% said AI-driven drafting and document generation would improve profitability. One Australian firm cited in the research reported saving 10–15 hours per week through AI tools.
The report also points to commercial pressures affecting law firm operations. In Australia, 66% of respondents identified client pricing expectations as a major constraint on revenue growth, which the study said was the highest for any region. Separately, 65% said profitability is now a high or top priority in business decision-making.
“The Australian legal sector is entering a phase where profitability will depend less on how much work firms win and more on how efficiently that work is delivered,” said Tina Shergold, Head of LEAP Australia and New Zealand, in the report.
Technology fragmentation was identified as another operational challenge, with 68% of Australian respondents saying they use three or more platforms as part of their digital workflows. The report suggests using multiple systems can slow processes and increase training demands, limiting the benefits of technology investments.
The research also highlighted workforce and knowledge-management risks. It found 33% of Australian respondents reported having no documented processes in place when staff leave, a factor the report linked to potential gaps in training, consistency and service delivery.
The report concludes that, while many firms remain optimistic about growth, outcomes will increasingly depend on execution—particularly how firms manage productivity, technology integration and knowledge capture amid pricing pressure and operational complexity.
Research Methodology
The Profitability in Law: Global Report 2026 draws on a quantitative survey of 700 legal professionals across Australia, New Zealand, the United States, Canada, the United Kingdom and Ireland. Fieldwork was conducted between 10-28 November 2025. Participants included firm leaders, partners, senior practitioners and operational decision-makers representing a range of firm sizes and practice areas. The study examined how firms are managing profitability across four core areas: strategy and revenue, people and retention, technology and operations, and AI adoption. Fieldwork was analysed in January 2026 to identify both global trends and market-level differences in how firms are responding to profitability pressures.
You can read the full report here.
