In my earlier article, Breaking From the Herd: Properly Selecting AI, I questioned whether legal organisations were choosing AI through critical evaluation or simply following their peers. The next question is potentially more consequential: where is the herd heading, and who might be left behind?
In the legal AI realm, hyperscalers have become prominent names in a very short period of time, with major law firms and corporate legal departments among their growing customer base. Their visibility and rapid ascent can make it seem like adopting one of these popular platforms is the price of admission to the modern legal market.
But does this trend point towards a widening divide between large legal organisations and smaller firms, or could AI redistribute legal work in ways that challenge both?
The Real Cost of Keeping Up
The risk of polarisation deserves attention. Larger organisations can fund more than licences. They can dedicate people to knowledge management, integration, training and governance, all of which matter for maintaining competitive advantage as work gets done differently.
For smaller firms, the challenge may be finding the time and expertise to implement AI while continuing to serve clients. Even with a technology budget in place, the cost and time needed to adopt AI can take a toll. An impressive platform can become an expensive experiment without clear requirements and suitable workflows.
This could create a compounding advantage or disadvantage for legal teams. Organisations that implement a well-built experience will refine processes and demonstrate results, while those that struggle may face growing pressure on turnaround times and client expectations.
A more subtle danger arises when familiar platform names begin to serve as a proxy for capability, giving a false sense of security because of a brand name. If procurement rewards the popularity of an AI provider before examining the service and whether it meets the needs of their team, smaller firms could lose opportunities despite having equally effective approaches or expertise.
Size Does Not Settle the Outcome
Yet a market divided neatly into “large winners” and “small losers” is far from inevitable.
The flipside is that smaller practices may also face fewer internal barriers to AI adoption, with closer client relationships and more focused technology requirements driving successful implementation. A specialist firm that applies AI effectively could outperform a larger competitor whose colossal rollout has barely changed daily working habits. A targeted plan and a good provider partner that can guide adoption can help boutique and mid-sized firms gain a competitive advantage with AI that cookie-cutter options can’t offer.
If organisations of any size can survive the growing chasm around AI use, the next sensible question is how to combine technology and expertise to improve the service our clients actually need.
What Happens When the Client Can Do More?
Recent feedback from corporate legal departments may give a clue.
Thomson Reuters’ 2026 State of the UK Legal Market research describes corporate teams moving ahead of external law firm advisers with the use of GenAI, with more than half of UK corporate legal respondents already using GenAI tools compared to about a third of law firm respondents. The study illustrates the rising expectation for firms to improve efficiency and quality to keep pace. It also suggests that clients are becoming more demanding, technologically capable buyers.
With this disruptive shift, my expectation is that there will be a redistribution of spending, although its scale remains uncertain. Some budget could move into technology, legal operations and internal capability. Some could flow towards specialist advisers and managed services. Routine external work may face greater price pressure, while judgement, negotiation and complex disputes retain their value (if not increase).
This does not necessarily mean total legal expenditure will fall. AI may help teams address previously unmet demand, while verification, implementation and oversight carry costs. More self-sufficiency also does not remove the need for independent advice, specialist expertise, additional capacity or insurance!
For large firms, there is an uncomfortable possibility: the same technology that improves their productivity could help clients buy fewer of their hours. Smaller specialists, meanwhile, might gain access to work that clients previously bundled into broader instructions.
Follow the Work
While AI is creating a divide between those who have incorporated it and those who haven’t, all legal teams still have an opportunity to stand out if they proceed wisely. Buying into a big platform isn’t a ticket to success, but falling behind more technologically savvy peers won’t pay off either.
The legal team of the future needs to embrace AI, but the way they go about doing so is just as important as the technology itself. Every firm should ask which services clients actually need, as well as what those services should cost and how AI changes its contribution. Organisations also need to research platform and provider options to ensure they are adopting what fits their business and that they have the support they need instead of trusting that the use of AI giants will guarantee revenue.
Following the herd may secure a familiar technology, but understanding where the work is going will be far more valuable.
Andy Edler
Author
Share article:
Andy is VP of Legal Services for TCDI in the UK. He is responsible for the management and development of existing client relationships and the growth of TCDI’s footprint in the legal and corporate market throughout Europe. With over 20 years of experience, Andy has helped major organisations transform operations, minimise cost, improve efficiency, and enhance customer experience with market leading technology and services.