Legal AI Adoption, Growth, and Innovation: Key Insights for Small Law Firms in Europe

Key Insights

• Staff salaries, office expenses, and technology remain the main cost drivers, with many firms prioritizing automation to increase efficiency and control operational costs.
• Less than half of lawyers’ time is typically billable, underscoring the need to streamline workflows and delegate non-billable tasks.
• AI and LegalTech adoption are accelerating, with 61% of respondents already using AI tools and most planning to further invest in technology over the next three years.
• Attracting and retaining clients remains a top challenge for 70% of firms, pushing practices to strengthen trust, communication, and service quality using both traditional and digital tools.

Profitability and Cost Management

Managing costs while maximizing profitability is a constant balancing act. Our report reveals that staff salaries, office expenses, and technology are the primary cost drivers for law firms in Europe. Two out of five law firm respondents are turning to automation and improved workflows to manage these expenditures effectively.

A critical finding is that for many lawyers, less than half of their time is currently billable. This highlights a significant opportunity to boost revenue. Respondents suggest that automating administrative tasks, delegating non-billable work to support staff, and implementing better workflow management tools are key strategies to increase billable hours.

What percentage of your time is billable?

What strategies do you consider to maximise billable time?

"For solo practitioners and small firms, profitability isn’t just about billing more hours. It’s about working smarter. Firms that adopt automation and specialized workflows consistently outperform their competitors because they reduce administrative burden and free up time for high value client work.”


Alicia Feito Pujades, Associate Director, Sales, Wolters Kluwer Legal Software

Billing models are also evolving. While many firms still rely on fixed fees and hourly rates, half of the respondents now use a mix of fixed and retainer models. This shift indicates a move towards more flexible and value-oriented pricing structures that align better with client needs.

Which pricing models are you currently using?

The Rise of AI and LegalTech in Law Firms

Technology is no longer an option but a necessity for growth. The report shows that investment in technology is the top priority for firms, with AI and LegalTech adoption gaining considerable momentum. Currently, 61% of respondents use AI tools, and another 12% plan to adopt them soon. The primary drivers are the pursuit of greater efficiency and enhanced legal research capabilities.

Which AI tools are you using?

While most recognize the benefits of AI, such as increased productivity and profitability, barriers to adoption remain. A lack of familiarity with AI, insufficient training, and data privacy concerns are the main obstacles cited by non-users.

Despite these hurdles, the trend is clear: technology investment is set to grow. Four out of five firms plan to invest in tech tools, and 86% expect their legal technology spending to increase over the next three years. The most effective LegalTech tools, according to respondents, are those for legal research, document management, and case management.

Which LegalTech tools are you using?

"GenAI will significantly reduce the time required for tasks such as legal research, document drafting, and contract review, allowing lawyers to focus more on strategic thinking and client interaction."


Ruud Helmes, Director of Product Management, Kleos, Wolters Kluwer Legal Software

Strengthening Client Relationships Today

In a competitive market, attracting and retaining clients is a major challenge for 70% of law firms. The primary difficulties stem from changing client expectations and increased competition. To succeed, firms must focus on building strong, long-term relationships.

The most effective strategies for maintaining client loyalty are rooted in fundamentals: building trust through transparent communication, providing excellent customer service, and ensuring consistent quality in legal work. Technology also plays a supportive role. Web conferencing tools and other technologies that enhance firm operations and client work are seen as highly effective for improving client relationships.

Which technologies or strategies are you implementing to improve the relationship with your clients?

Unlock Deeper Insights

The legal industry is at a pivotal moment. To build resilient and profitable practices, it is essential to understand the current challenges and opportunities. Our comprehensive 2026 Benchmark report delivers actionable country insights and detailed data analysis, enabling you to navigate this evolving landscape with confidence and support your firm's strategic planning.

Download the free, full report in your language to explore all the insights and prepare your firm for the future. To better understand your local legal landscape, select the report for your country below.