Mid-sized law firms expand AI usage & flexible pricing

Clio has unveiled its 2025 Legal Trends for Mid-Sized Law Firms report, highlighting a significant increase in artificial intelligence (AI) adoption among these firms.

The report identifies that AI adoption among mid-sized law firms has risen dramatically over the past year, with 93% now incorporating AI into their operations. This rise indicates that over half of these firms are using AI extensively.

AI is being implemented due to its ability to save time, improve efficiency, and increase the quality of legal work. According to legal professionals within mid-sized firms, the primary benefits of AI include enhancing efficiency (43%), improving work quality (38%), and effectively managing caseloads (37%). Popular AI tools in use include AI-powered legal research (66%), generic non-legal AI tools (65%), and document automation (60%).

Despite significant investment in technology, with mid-sized firms spending double the industry average on software, only 38% are utilising legal practice management software. This is a stark contrast to the 71% adoption rate for this software among smaller firms. "Mid-sized firms are making big tech investments, but not always in the right places," said Joshua Lenon, Lawyer in Residence at Clio. "They're spending big on software, yet only 38% use legal practice management software—the backbone of an efficient firm. The takeaway is clear: Technology alone doesn't drive innovation. It's how you integrate it that matters."

In relation to pricing strategies, the report reveals that mid-sized firms are employing a more flexible approach than smaller firms. Ninety-nine per cent of mid-sized firms use multiple billing rates for their lawyers as opposed to 85% of smaller firms. Mid-sized firms apply eight different hourly rates for lawyers and nine for other legal professionals, providing them with the flexibility to align services with client needs and maximise revenue. The report highlights a $400 gap between the highest and lowest hourly rates charged by mid-sized firms, compared to a $250 gap among smaller firms, indicating a more tailored, profit-driven approach to billing.

Joshua Lenon commented on this trend, saying, "Mid-sized law firms are taking a more strategic approach to pricing – leveraging multiple rates to align with client needs and maximise profitability. Firms that rely on a one-size-fits-all model risk undervaluing their services and missing key revenue opportunities."

The shift towards predictable pricing models is another key finding of the report, with mid-sized firms increasingly offering fixed fees and subscription models. Sixty-four per cent of these firms now provide flat fees while 27% have adopted subscription-based pricing. This change highlights a move away from traditional hourly billing, accommodating the growing client demand for transparency and predictability. Eighty-two per cent of firms offering fixed fees apply them to entire matters, and 41% to specific activities within a matter.

As firms strive to meet evolving client expectations, the report suggests that adopting fixed and subscription-based pricing positions them as client-focused and adaptable to market changes.

The 2025 report was compiled from anonymised data from tens of thousands of legal professionals to present a comprehensive overview of current industry trends and predictions for the future. It serves as a key tool for legal professionals making informed decisions in a changing industry landscape.