Software Advice's 2026 Legal Software Buying Trends: 84% of Legal Pros Say Tech-Savvy Lawyers Will Lead

The takeaway: AI is no longer optional in law—it’s the new competitive edge. Firms that combine ethical AI adoption with strong digital skills will thrive in a rapidly evolving legal landscape.

AI is transforming the legal industry and introducing new paradigms. From rethinking billing models to upgrading digital skills, the new tech status quo is challenging long-standing structures and redefining established practices.

Why you should read on: Software Advice's 2026 Legal Software Buying Trends report, based on interviews with 396 legal professionals in the U.S., reveals how firms are navigating this shift. We also share the strategies you need to lead this transformation and set yourself up for success.

First things first: As legal technology adoption accelerates, our findings highlight that choosing the right legal case management software must go hand in hand with strong data security practices, AI governance, and workflow optimization.

Tech skills win: 84% say lawyers fluent in AI will thrive

Why this matters: The rise of artificial intelligence (AI) has brought a seismic shift to the way the legal industry operates. From time tracking to document drafting and contract review, tasks that were once entirely manual can now be assisted by AI prompts.

This evolution explains why 84% of legal professionals believe that lawyers proficient in AI tools will be more successful over the next five years.

To thrive in this new landscape, lawyers must combine traditional legal reasoning with technological fluency and a strong focus on ethical considerations.

As law firms integrate AI into their operations, new skill requirements are emerging. Respondents identified data analytics and management (44%) as one of the most critical areas if AI usage becomes commonplace.

This shift is driven by the rise of legal analytics, which enables lawyers to analyze large volumes of court data to predict case outcomes based on prior rulings and optimize litigation strategies.

AI isn’t foolproof: Success needs sharp judgment and ethics.

Anyone can use AI, but few can verify and refine its outputs. Ethical judgment and interpretation—cited by 43%—are vital to avoid errors and protect the confidentiality and integrity of legal processes.

Recent cases have shown lawyers citing fake precedents created by generative AI (GenAI) in motions, resulting in judicial sanctions [1]. This underscores the urgent need for adaptation and ethical oversight in the use of AI, especially GenAI. Double checking outputs and sources before documents are submitted is mandatory when using these technologies.

Other mentioned skills confirm that core human competencies remain essential, such as legal reasoning and advocacy (43%). After all, machines cannot replace the human ability to interpret nuances, apply law creatively, and argue with strategy and conviction in court.

Hiring for law firms could get harder as AI becomes central

Our findings reveal that legal pros expect legal tech to reshape firms—and 33% worry about hiring and keeping top talent.

This perception is even stronger among professionals already using AI:

The push for digital skills means law firms must find tech-savvy lawyers while continuously upskilling their teams. Even if demand for these professionals isn’t high now, it will be soon, driving fierce competition for talent. 

What’s the workaround? The recommended strategy rests mostly on these pillars:

It’s no coincidence that a perception about the need for digitally skilled lawyers exists. As we’ll see next, AI adoption is already widespread in law firms—reshaping legal work and setting new expectations for professional expertise.

AI is everywhere in legal tech—so why aren’t all firms using it?

According to our findings, 83% of law firms report that their software already includes AI features, and more than two in three actively use them.

Why does this matter? Attorneys work an average of 43 hours a week and spend 16 of those hours on administrative tasks—nearly 37% of their time not practicing law. No wonder 80% say they spend too much time on admin work.

Some activities that could easily be automated are still performed manually, such as document drafting; 44% of respondents said this task is typically done manually at their firm.

Here’s where AI-powered legal software makes the difference:

• 37% say it increases efficiency

• 35% report improved accuracy

• 34% highlight enhanced legal research

And, 93% of attorneys using legal AI tech believe it improves the quality and accuracy of legal advice. 

So what’s the holdup? Despite these advantages, about 15% of firms that have access to AI features don't use them. Another 13% don't have these features at all. The biggest barrier appears to be trust.

When we look at what firms with AI-enabled software identify as their main challenge, data privacy and security concerns was one factor that stood out, cited by 34% of respondents.

Why law firms can't ignore this

• Law firms are vulnerable: The legal industry is a prime target for cybercriminals because law firms manage highly sensitive and confidential data.

• Recent breach exposed 54,000 client records: A recent breach at a law firm exposed information on more than 54,000 clients, including Social Security numbers, home addresses, medical histories, and health insurance details [3][4].

• Data leaks erode trust and reputation: The above example illustrates the extent of the damage such incidents can cause. Not just to clients, but to the firms themselves. In an industry built on strict compliance and regulation, a data breach is more than a legal headache. It erodes client trust and undermines the reputation that law firms depend on, making security a critical priority for every practice.

• Free AI tools risk client confidentiality: Another concern: many AI tools use data shared on their platforms to train models, especially free tiers, which can compromise client confidentiality. That is why it is crucial to rely on premium solutions built specifically for the legal sector.

Implementation costs are also a major challenge: Here’s how to reduce the impact

Beyond security and ethical concerns, implementation costs (31%) also emerged as a barrier of AI for law firms.

A Gartner report, ‘Key General Counsel Actions to Improve Legal Technology ROI’ [5], notes that many legal departments face challenges with technology adoption, resulting in low success rates. The results show that only 33% of system implementations met their original timeline, and only 34% met their original budget.

Implementation costs can vary widely depending on several factors. For example, training expenses can also add up, as attorneys, paralegals, and staff need time and resources to learn new workflows, which may include vendor-led sessions or internal programs.

Other common cost drivers include:

• Initial setup

• Data migration

• Integrations

• Operational changes

• Additional customizations

• Extended timelines

What’s the solution? A structured approach can help law firms control expenses and ensure a smooth rollout. Here are six practical tips:

1. Start with a clear implementation plan Define goals, timelines, and responsibilities before you begin. A detailed plan reduces delays and cost overruns. Include:

• Key milestones and deadlines

• Assigned roles for internal teams and vendor support

• Budget estimates for software, training, and potential integrations

2. Involve stakeholders early 

Engage attorneys, paralegals, and IT staff from the start. Cross-departmental input helps identify workflow needs and avoids costly rework later.

3. Assess infrastructure and integrations 

Check if your current systems can support AI features. Plan for integrations with case management, legal billing, and document management systems to avoid surprise costs.

4. Prioritize training 

Budget for user training. Lack of adoption often stems from poor onboarding, which can delay your return on investment (ROI). 

5. Monitor and measure progress 

Track KPIs like user adoption, time saved, and error reduction. Continuous monitoring helps justify costs and identify areas for improvement.

6. Negotiate vendor support 

Ask vendors about implementation assistance, data migration, and post-launch support. Evaluate their support levels beforehand and negotiate appropriate SLA terms in the contract.

Despite widespread concern about legal tech or services, 97% of firms report stable or growing client bases

Our study shows that the vast majority of respondents (97%) view emerging technologies or new service models as a source of competition for law firms. AI platforms (65%) were cited as the main source of competition, followed by online legal service platforms (60%) and legal tech startups (48%).

The takeaway: Legal tech isn’t stealing clients—97% report that their client base has remained stable or grown over the past 12 months.

In fact, according to Gartner’s ‘9 Regulatory and Legal Implications of Generative AI’ report [6], GenAI is expected to reduce the cost of legal services, making the legal system more accessible. This increased accessibility could drive higher demand for legal services and expand the client base.

In this context, misunderstanding how legal tech works can lead to hesitation and missed opportunities for gaining efficiency. That’s why understanding its capabilities is essential for selecting the right software solution. 

AI use cases for the legal industry: 

• Contract management

  • Automates drafting by suggesting clauses based on templates

  • Reviews contracts and flags deviations from standard terms

  • Ensures compliance throughout the contract lifecycle

• Legal research

  • Summarizes legal texts and court decisions for quick review

  • Helps professionals extract key insights without manually sifting through documents

  • Uses analytics to spot trends and guide case strategies

• Compliance management 

  • Monitors compliance and sends alerts flagging deviations

  • Automates privacy impact assessments (PIAs) and related evaluations

• Case intake and triage

  • Automates client intake via chatbots or virtual assistants

  • Speeds up initial consultations and improves response times

  • Analyzes historical data to identify enforcement trends

• Routine legal tasks

  • Handles admin tasks like e-billing, invoicing, and inquiries

  • AI chatbots answer FAQs, reducing staff workload and improving client engagement

In short: Law firms should see these tools as a complement, not a competitor—especially as AI and automation become essential for staying competitive and meeting evolving client expectations.

AI speeds billing shift, boosting attorney efficiency

Although the hourly billing model is still the most common (55%), our study indicates a shift away from this format. Forty percent have already adopted value-based pricing as their primary approach, and 44% have introduced this alternative billing method for some services or clients.

Why firms are rethinking billing models:

• Improved work-life balance (58%)

• Competitive pressures (56%)

• Client demand (51%)

Only 25% of law firms cite industry trends as a reason for this shift, showing that decisions are more influenced by operational realities and client expectations than by simply following the majority.

Why this matters: In this evolving scenario, legal technology becomes essential for firms transitioning to a new model to maintain efficiency and quality in their deliverables. 

Brook Selassie and Hung LeHong, both Gartner VP Analysts, explain in a report called ‘AI Shockwaves Are the Real Disruptors That Emerge in the Postproductivity Era’ [7] that GenAI makes legal research faster and cheaper. Plus, by leveraging AI-driven efficiencies, firms can adopt models such as flat fees, subscriptions, or outcome-based pricing—creating long-term value and positioning themselves ahead of an industry-wide shift.

Legal tech gap: Firms want client intake, but use billing tools

We investigated which legal software tools firms rely on most, and the results reveal clear priorities—along with a noticeable gap between what firms need and what they actually have.

Billing and invoicing software leads current usage, followed closely by electronic signature, and accounting. These tools seem to dominate because they tackle financial workflows, documentation, and compliance—areas where automation delivers immediate efficiency gains.

But when asked which tools are most critical to their operations, firms shifted focus a bit: client intake (89%), billing and invoicing (87%), and legal calendaring/docketing (87%) ranked highest. 

These functions go beyond back-office efficiency. They directly influence client onboarding, deadline management, and revenue generation, which are essential for long-term performance and client satisfaction.

Why it matters: 32% struggle to attract clients, yet just 31% use AI chatbots—tools that could simplify first contact and improve engagement.

This suggests firms are prioritizing internal productivity over external experience, potentially missing opportunities to strengthen client relationships through automation. That's why it’s important that firms audit the tools currently in use and evaluate whether they support both operational efficiency and client engagement.

Legal software adoption is driven by security concerns, not cost-cutting

When law firms invest in technology, their decisions are rarely about saving money. In fact, only 28% of firms said switching to a less expensive product influenced their purchase. Instead, the driving force is risk management.

In the past 12 months, security concerns were the top trigger for legal software purchases (49%), followed closely by the need for better integration with existing systems (48%). 

This is not surprising in an industry that handles highly sensitive client data. Firms are prioritizing platforms that protect confidentiality and connect seamlessly with their existing workflows

The takeaway: AI is seen as efficient, not secure—just 22% see data protection as its benefit.

Next steps

AI is reshaping law—success depends on clear goals, trusted tools, and strong governance.

The legal industry is undergoing a transformation as law firms and legal professionals integrate AI technologies into their operations. The rise of the tech-savvy lawyer, the inclusion of digital skills within the workforce, and AI-driven features influencing billing models all require strategic system investment and proactive management.

Buyers who can identify their automation needs and align their chosen tools with strong AI governance are well positioned for success and a smooth adoption process.

Final recommendations when selecting your tool:

1. Define requirements: Set clear goals and identify essential features, including data protection standards, compliance needs, and integration with existing case management systems. Involve IT and senior partners to avoid isolated decisions.

2. Seek expert insights and peer reviews: Rely on trusted legal tech sources and verified reviews rather than marketing materials or generic AI search results. Industry-specific recommendations help ensure tools meet regulatory and confidentiality requirements.

3. Keep your shortlist actually short: Limit it to 3–5 vendors and aim to finalize within three months. Extended timelines often lead to decision fatigue and poor outcomes. Prioritize vendors with proven experience in legal workflows.

4. Negotiate contract terms: Focus on clauses that guarantee client data security, ethical AI use (no training on client data), and integration with your existing tech stack. Review compliance and confidentiality guarantees in detail.

5. Execute a robust implementation plan: Include steps for migrating sensitive case data securely, training attorneys and staff, and testing integrations with billing, calendaring, and document management systems. A structured rollout minimizes downtime and protects client trust.