Among the predictions: Artificial intelligence is poised to further reshape the legal landscape in 2025. There will also be major shifts in law firms, legal departments and legal tech vendors.
Read on for more on those two and six other bold predictions about legal tech in 2025 from experts in the industry.
Law Firm Mergers Will Increase … Because of AI
Law firm consolidations remained relatively stable in 2024, but there could be a boom in 2025.
Daniel Farrar, CEO of the legal software company Assembly Software, predicts that the pace of market consolidation will rise in 2025 and that it will be driven primarily by more law firms adopting AI.
Farrar said there has been an acceleration in the number and timing of firm consolidation deals driven directly by the rise of AI in the legal field. As firms embrace AI, he said, it allows them to take on work at a higher capacity, enabling them to go on acquisition sprees to cover new geographic locations where they are underrepresented or to pick up new areas of practice.
Supporting this theory is data suggesting most legal professionals use AI to some extent to save time and increase efficiency.
Smaller firms that are not reaping the benefits of AI will see fewer growth opportunities and ultimately get "swallowed up," Farrar forecasts.
"I see AI as giving law firms, really of any size, an unprecedented opportunity to diversify in both geographies and areas of practice and grow their firms," Farrar told Law360 Pulse.
Farrar also expects smaller and Mid-Law firms to be more proactive in consolidations as they seek to expand their regional footprints and grow practice areas. As many as 5,000 U.S. law firms are on the hunt to make acquisitions and expand their footprint, he said.
Corporate Entities Will Buy U.S. Law Firms
In addition to consolidation, some experts expect changes in the nature of U.S. law firm ownership in 2025.
Christian Geyer, CEO of data mining company Actfore, predicts a first wave of corporate entities acquiring profitable law firms in 2025 in regions where it is allowed. This will transform those law firms into corporate income streams or investment vehicles.
Geyer attributes his prediction in part to states, such as Arizona, that have eliminated the rule prohibiting nonlawyer ownership of law firms.
"As hourly rates in the legal profession continue to rise, the industry's eagerness for greater efficiency makes it a prime target for investment and an attractive opportunity for corporate entities to acquire profitable law firms," Geyer told Law360 Pulse.
Brendan Gutierrez McDonnell, a partner with K&L Gates LLP, expects state bar associations to look carefully at these reforms and to ease American Bar Association Rule 5.4, which essentially bans nonlawyers from owning law firms.
"The driving force will be allowing corporate entities to use AI and generative AI to offer critical legal solutions to help better provide access to justice to the underserved members of our communities," McDonnell told Law360 Pulse.
Modern software will play a role as corporate buyers seek law firms that want to become more efficient and more profitable in a price-competitive environment.
For example, law firms typically conduct manual document reviews to maximize billable hours for staff. This is good for law firm revenue, but it's not very efficient.
"In the new legal world order, the motivation and ultimate embrace of advanced technologies emerges, reducing reliance on labor-intensive processes and driving greater efficiency," Geyer said. "Thus, the legal industry — and especially clients footing the bills — stands to benefit significantly."
90% of Legal Services Will Be Delivered Online
There's a growing hunger for more online attorney services. For years, consumers have said they are increasingly comfortable working with an attorney remotely.
Dorna Moini, CEO of the legal automation platform Gavel, predicts that 90% of legal services will be delivered online in 2025.
"There is pressure coming from both the supply and the demand side pushing both attorneys and their clients to online legal services and online legal products where the attorney is at the heart of the process," Moini told Law360 Pulse.
Driving this push might be the slow discarding of the billable hour. Reasons for different billing models include attorneys' desire to use gains in efficiency that new technology is enabling to be more profitable. In additions, consumers seem to want more transparency.
"We've seen that 77% of legal needs are not met with a lawyer, but most consumers still want the lawyer involved in the process," Moini said.
Micro-Acquisitions in Legal AI as Other Legal Tech Vendors Shut Down
Experts say that amid the rise of AI in the legal field, there will be a dramatic decrease in the number of legal AI vendors, with the reduction coming through consolidation or closure.
The legal AI space is rapidly evolving as dozens of new startups emerge. ChatGPT, the generative AI tool from OpenAI, is already 2 years old, and it might be difficult for new players to gain a foothold in the space.
Scott Stevenson, CEO of the legal AI company Spellbook, predicts that several legal AI startups that were founded late in the AI race will throw in the towel in 2025.
"I think we will see 20-plus micro-acquisitions and mergers, mostly at fire-sale prices, as a herd of late entrants realize they may be too late to get a foothold in the generative AI and legal market," Stevenson told Law360 Pulse.
Stevenson adds that his company is exploring and plans to make micro-acquisitions of such startups in 2025.
Blake Rooney, the chief information officer for Husch Blackwell LLP, expects AI-based tools to boost attorney productivity and reshape the legal tech market.
"As this transformation unfolds, we'll see consolidation in the legal tech market, with only the products improving the fastest thriving," Rooney told Law360 Pulse. "Success will hinge on AI systems that grasp the natural flow of legal work, not just isolated tasks."
To survive in 2025, experts say, legal AI vendors must build tools tailored for lawyers and their use cases because it might be challenging to compete with more general AI tools.
"Many low-effort legal chat assistants will be toast," Stevenson said. "There are too many products in that category."
Law Firms Will Gain a Technological Edge Over Legal Tech Vendors
Could AI become the great equalizer that enables law firms to beat legal tech vendors at their own game?
In the great build vs. buy debate, legal tech vendors have convinced law firms to buy their products because it is often easier and faster than the alternative of developing them internally.
But in 2025, those tables could turn. Myka L. Hopgood, the chief knowledge management and innovation officer at Dykema Gossett PLLC, predicts that law firms will finally gain a technology edge in 2025 with solutions they build themselves.
"This will force legal tech companies to not only up their own game, but to cut costs as well," Hopgood told Law360 Pulse. "It will be driven by law firms leveraging AI along with better processes."
Contract Life Cycle Management Administrators Will Be in Demand
The contract life cycle management, or CLM, landscape evolved in 2024 with several vendors adding generative AI features to their platforms to help users write and edit contracts.
As these systems become more ubiquitous in legal operations and strategic planning, organizations are begging to hire CLM administrators to optimize workflows, enhance data management and drive innovation. This is similar to organizations hiring an admin for customer relationship management tools such as Salesforce.
Eric Laughlin, CEO of the CLM platform Agiloft, predicts that since CLM admins play a critical role in this increasingly important area, they'll "become worth their weight in gold."
"Businesses will fiercely compete to recruit and retain that indispensable talent, making 2025 the year of the CLM admin," Laughlin told Law360 Pulse. "As organizations are relying more on AI to streamline contracting processes, CLM admins will move from being seen as operational support to becoming key drivers of business outcomes — impacting everything from risk management to revenue."
But there's a catch: There won't be enough skilled CLM operators to meet the demand, forecasters say. Laughlin said companies will fight over CLM admins in 2025.
"The competition for top talent will be fierce, and those who can attract and retain these rare experts will gain a significant strategic advantage," Laughlin said.
Law Firms Will Embrace AI as a Colleague
In 2025, some law firms might cease to see AI as just a tool and start to view it more as an actual colleague.
Michael Ulin, chief technology officer and co-founder of Paxton AI, foresees legal professionals collaborating daily with AI colleagues embedded seamlessly in their firms' workflows.
Each AI colleague will have their own digital identity, distinct personality and specialized practice niche, he predicts.
"These AI co-workers won't just run silent tasks in the background," Ulin told Law360 Pulse. "They'll attend team meetings, identify issues, propose projects and even engage in client outreach and updates."
AI colleagues will also invade law firm mentorship cohorts and work with human colleagues, Ulin predicts. He said this will help young associates learn from seasoned partners and trusted AI counterparts.
At the same time, AI tools in law firms could become highly personalized. Experts say that could include having an agentic AI solution designed to handle tasks for specific practice areas.
"Agentic AI" refers to AI agents that automatically complete tasks with less human supervision.
"These assistants will know your style, anticipate your intent, and personalize interactions for how you like to work — with full reasoning capabilities across text, image, audio and video," Sean Fitzpatrick, CEO of LexisNexis North America, UK and Ireland, said in a statement.
Tumult Will Accompany the Race to Keep Up
On a final note, some predict 2025 could be a tumultuous year for lawyers and the technologies they use.
"In 2025, even with a new U.S. administration that vows to ease regulations and enforcement on AI, the legal tech landscape will be an increasingly chaotic battleground where data privacy reigns supreme, AI systems proliferate uncontrollably, nations compete for technological supremacy, and lawyers scramble to keep up with an overwhelming tangle of privacy, security and AI regulations," Rachel Reid, a partner and head of artificial intelligence at Eversheds Sutherland, told Law360 Pulse.
This so-called "race to not be left behind" will force tech vendors to push AI-enhanced products onto customers, according to Reid.
As this happens, legal professionals should rigorously evaluate each AI product and use case.
Law360 is owned by LexisNexis Legal & Professional, a RELX Group company.
-Additional Reporting by Aebra Coe, Matt Perez and Tracey Read. Editing by Amy French.
For a reprint of this article, please contact reprints@law360.com.
