Midsized Law Firms Increasingly See AI and Interconnected Technology as Critical for Future Success, New Survey Finds

An overwhelming 87% of professionals in midsized law firms view investing in cutting-edge technology as critical for their firm’s future, with expectations for AI’s value growing significantly, according to the 2025 US Midsize Law Firm Priorities Report, released today by law practice management company Actionstep.

The report, which surveyed 264 U.S. law firm professionals from firms with 50-250 employees, reveals that while 30% of respondents currently see high value in AI, 54% expect AI to deliver even higher value in the future.

Technological Fragmentation

But the report highlights a significant pain point for midsized law firms, finding that the average professional uses 6.6 different tools to manage a single client matter. This fragmentation creates numerous operational inefficiencies and data management problems that affect both client service and internal workflows.

Nearly half (45%) of respondents cite maintaining multiple records of client and matter information as a major challenge, while 44% report inefficient time management resulting from juggling disconnected systems.

The consequences of this technological fragmentation extend beyond mere inconvenience. Perhaps most concerning, 73% of law firm professionals report that their current technology is not set up to support the way they actually work, and 83% lack confidence that client or matter information is up-to-date and accurate when they access it. This represents a significant risk for firms whose business depends on the accuracy and timeliness of client information.

The report also reveals that disconnected tools significantly impact non-billable time. Entering data in multiple systems (40%) was most frequently reported as the non-billable task that law firm professionals spend the most time on. Other time-consuming non-billable tasks include billing and collections (37%), marketing and business development (36%), time tracking (34%), and document updates and version control (34%). This trend has been increasing over the years, suggesting that the problem is growing rather than being resolved.

Given these challenges, it is not surprising that nearly all respondents (99.6%) see benefits in using a single platform to manage their practice, matters and clients instead of switching between different tools. The advantages of such integration are multifaceted and impact every aspect of firm operations, the report suggests.

The primary benefit of a single platform, respondents believe, is improved efficiency (47%), followed by increased confidence in data accuracy (42%), improved work quality (41%), and centralized visibility into business performance (37%).

Additional benefits include faster staff training (36%), reduced costs (35%), and higher client satisfaction (34%). These advantages directly address many of the pain points identified by respondents regarding disconnected tools.

AI Adoption and Preferences

Like other recent surveys, the report offers insights into how midsized law firms are engaging with AI technologies. Law firm professionals report experimenting with AI in several key areas including legal research (36%), document drafting (33%), and workflow and task automation (33%).

Insofar as these areas represent some of the more time-consuming aspects of legal work, these findings suggest that firms are deploying AI where it can have the greatest immediate impact.

When it comes to implementing AI, the report reveals strong preferences about how these technologies should be introduced. Six in ten (61%) respondents prefer AI capabilities to be integrated into tools they already use rather than deployed as standalone solutions.

This preference for integration over separate AI tools is particularly pronounced among younger legal professionals, suggesting that seamless integration will be increasingly important for talent attraction and retention.

The report also reveals generational differences in AI adoption preferences that firms should consider when planning their technology strategies. Younger generations show a stronger preference for having AI capabilities added to their existing toolsets, which has implications for how firms should approach AI implementation to maximize adoption.

Technology Investment Priorities

Looking ahead, the report identifies several specific areas where midsized firms see opportunity for technology investment in the coming year. Legal accounting applications top the list at 39%, followed by time tracking (35%), matter management (31%), billing systems (29%), and online payments (28%). These priorities suggest that firms are focused on improving their financial operations and client-facing payment systems.

The investment priorities align with identified gaps in firms’ current technology implementation. For example, the report finds — shockingly, I might add — that only 28% of midsized law firms have implemented legal accounting applications, and only 20% say their firm has invested in time-tracking technology.

That said, firms appear to be highly motivated to spend more on technology, with 59% of firms saying they are “very motivated” to invest in technology in 2025, believing that both clients (46%) and employees would benefit “a lot” from additional technology investments.

Tech’s Role in Client Service

Of course, while technology adoption is crucial, it must support broader business objectives. For mid-sized law firms, improving client satisfaction (43%) and managing business costs (41%) are the top business priorities for driving revenue in 2025, followed by diversifying or adding new practice or service offerings (39%), recruiting and retaining talent (38%), and digital transformation and technology (31%).

The report draws a clear connection between technology investments and client relationships. A notable 88% of law firm professionals agree that technology can improve client relationships. When asked about past technology investments, improving team and client collaboration (38%) and producing consistent quality work (37%) were most frequently cited as motivators for firms to invest in technology in the past year.

Furthermore, 99% of law firm professionals say clients would benefit at least somewhat from additional technology investments, with almost half (46%) saying clients would benefit “a lot.”

Tech’s Benefits to Employees

The report also explores how technology investments benefit law firm employees. Almost all (99.6%) law firm professionals say they would personally benefit from additional technology investments. Interestingly, there are differences in perceived benefits between smaller and larger firms in the midsized range, with 46% of professionals at firms with 150-250 employees saying they would benefit “a lot” compared to only 26% at firms with 50-150 employees.

The desire for automation is particularly strong. Almost all (99.6%) law firm professionals say they would personally benefit from using additional automation for their work. The top benefits cited include being able to spend more time on higher-value work and fewer administrative tasks (41%), knowing what tasks need to be completed next (40%), improving work-life balance (40%), and providing better service to clients (39%).

There are notable differences in automation preferences between legal staff and administrative support roles. Legal staff are more likely to want automation to know what tasks need to be completed next (44% compared to 38% of administrative support roles) and provide better service to clients (43% compared to 37% of administrative support roles).

In contrast, administrative support roles are more likely to want automation to spend more time on higher-value work and fewer administrative tasks (43% compared to 38% of legal staff) and to improve work-life balance (43% compared to 35% of legal staff).

Strategic Implications

As midsized law firms navigate an increasingly competitive landscape, those that strategically invest in integrated technology solutions and thoughtfully implement AI capabilities will likely gain significant advantages, the report suggests. That means that firms should focus on reducing administrative burdens through automation, consolidating disconnected tools into integrated platforms, ensuring technology supports both internal efficiency and client-facing improvements, and implementing AI in ways that enhance existing workflows rather than disrupting them.

The Actionstep analysis concludes that technology adoption isn’t just about making internal processes smoother — it is also critical to enhancing the client experience. The overwhelming consensus that clients would benefit from additional technology investments reinforces the necessity of client-centric solutions. Firms see a strong connection between technology and client satisfaction, but must ensure they’re offering solutions that make working with their firm easier for clients.

“In a landscape where large firms have deep resources, midsize firms must strategically apply technology across all areas of their business to level the playing field,” the report recommends. “The key? Using legal tech not just for efficiency, but to enhance client service, firm profitability, and overall business operations.”