The legal landscape is evolving rapidly, and small to medium-sized law firms (SMEs) are under increasing pressure to adapt. Clients expect more efficiency, faster turnarounds, and greater value, all while firms grapple with operational costs and the need to remain competitive. With Alternative Fee Arrangements (AFAs), such as flat fees, now offered by 64% of US mid-sized firms, the challenge is to deliver work more efficiently in order to preserve profit margins.
Technology is often touted as the panacea, but for SMEs without dedicated tech teams or hefty budgets, navigating the legal tech world can feel overwhelming. These firms often find themselves caught between the rising tide of client expectations, which increasingly demand tech-enabled efficiencies, and the constraints of limited internal resources, such as budget and specialised IT staff.
The Legal Tech & AI ‘Wave’
Recent data indicates a significant shift in how law firms view and use technology. Overall, a substantial 90% of US law firms plan to maintain or increase their technology budgets, signalling that tech investment is no longer a discretionary spend but a fundamental component of sustainability and growth.
The surge in Artificial Intelligence (AI) adoption is particularly noteworthy. General AI usage among US lawyers has seen a dramatic leap, jumping from 19% to 79% in just one year. Drilling down, 93% of US mid-sized firms now report using AI in some capacity, with over half (51%) having adopted it widely or universally across their practices.
Smaller firms are also engaging with AI, with 72% in the US using it in some capacity. However, only 10% of these smaller firms have adopted AI widely or universally, a stark contrast to their mid-sized counterparts. This disparity suggests that while smaller firms are exploring AI, often through readily available generic tools, they may lack the resources or expertise for deeper, strategic integration into core processes.
Beyond general adoption rates, certain types of legal technology are becoming increasingly prevalent in SME law firms. AI-powered document drafting tools are gaining significant traction, particularly in mid-sized firms, where 60% of those using AI utilise it for this purpose. Automating document creation can substantially reduce errors, ensure consistency, and free up valuable lawyer time for more complex tasks.
Additionally, there is a clear momentum towards workflow automation as firms actively seek efficiency improvements. Technologies that streamline critical processes such as client intake, case management, and billing are becoming indispensable. Legal workflow software provides structure to these tasks, offering visibility into responsibilities, consistency in execution, and the identification of bottlenecks.
The Hurdles to Successful Technology Adoption
Despite the clear benefits and increasing adoption rates, SME law firms, particularly those without dedicated technical staff, face significant barriers to effectively leveraging legal technology.
The legal tech market is flooded with a vast array of solutions, making it difficult for firms to navigate. Evaluating the multitude of options, understanding their true ROI, differentiating between features, and choosing reliable vendors is a daunting and time-consuming task without expert guidance. Even once a technology is selected, for it to be effective, it must work harmoniously with a firm's existing systems. A lack of seamless integration can create data silos, duplicate effort, and ultimately cause more problems than it solves. Managing these complex integration challenges without dedicated IT expertise is a significant hurdle.
Additionally, without specialised innovation teams, legal professionals—already juggling numerous responsibilities including client work and firm management—find themselves burdened with the complex tasks of selecting, implementing, and troubleshooting technology. In the UK, for instance, the absence of an innovation department means lawyers often have to take on the responsibility of training themselves to use new tools.
How Legal Engineering Support Can Help
For SMEs grappling with these challenges, particularly those without in-house tech leadership, a specialised form of support known as "legal engineering" can be a game-changer. A Legal Engineer is a professional who designs and develops digital solutions specifically for use by legal professionals. Their work involves a range of activities, including automating legal processes, creating intelligent document templates, configuring sophisticated systems like Contract Lifecycle Management (CLM), and increasingly, working with and refining AI-based tools for optimal use by lawyers.
They effectively bridge the often-wide gap between legal practice and technological capabilities, acting as "solutions architects" for the legal domain. The core of their role is to meticulously analyse legal operational areas, identify data requirements for efficient processing, and then implement practical, often digital, solutions to eliminate avoidable administrative burdens and streamline workflows.
Practical Steps to Embrace Legal Engineering Support
Before seeking external assistance, it's beneficial for the firm to conduct an internal review. Try to pinpoint the most significant operational challenges. Is it the time taken for document creation, inefficiencies in client intake, difficulties with billing and collections, challenges in tracking case progress, or consistently missing deadlines? Where are the bottlenecks, the most repetitive tasks, or the areas consuming excessive lawyer or staff time?
This initial reflection, however imperfect, will help in articulating the firm's needs to a potential legal engineering partner. While this internal reflection is valuable, it's important to recognise that firms lacking tech expertise might struggle to diagnose root causes accurately or translate operational pains into specific technical requirements. A skilled legal engineer will often assist with this diagnostic phase as part of an initial consultation, making the prospect of engagement less daunting.
It is also important to define clear objectives. What does the firm hope to achieve with technology? Is the goal to reduce administrative time by a specific percentage, improve client response times, reduce errors in document drafting, or enable the offering of a new type of legal service? Having clear, measurable objectives makes it easier to evaluate potential solutions, guide the legal engineer’s work, and ultimately measure the success of the engagement.
With these requirements and objectives established, or at least somewhat considered, firms should look to engage a consultancy providing legal engineering support. NodeMasters is one such consultancy, with decades of combined experience in legal technology. They provide "legal engineering on demand" services that allow law firms to engage them on a flexible and agile basis that best meets their requirements. With clients including Winheller, Prinz & Partner, BCLP, Clearlake Law, and Sernetz Schäfer, they can work with a firm’s existing technologies or support them in selecting suitable new platforms.
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Statistics obtained from: 2025 Legal Trends for Mid-Sized Law Firms Report & 2025 Legal Industry Trends Report – Small and Mid-Sized Law Firms in US & Canada
