A revolution on four fronts: How client demands, AI, private equity and talent are reshaping the London legal market

Industry leaders and top legal experts gathered at the London offices of A&O Shearman for the annual Sandpiper London Legal Market Conference to dissect the critical forces reshaping the legal profession. The spirited panel discussions where Marcella Rich, Senior Vice President, EMEA at Williams Lea by RRD joined top law firm leaders, industry experts, and law firm clients revealed a legal market at an inflection point. Navigating the demands of sophisticated clients, the disruptive potential of generative AI and AI agents, the strategic influence of private equity, and a transformed approach to talent and the workplace are among the powerful forces shifting long-standing legal practices and business models.

Here are the top four takeaways from the event:

AI is not just an efficiency play, it’s driving a business model revolution

The conversation around AI has fundamentally shifted from a question of if to how fast it will transform law firms. Law firm leaders described the current moment as an “industrial revolution for the knowledge economy” that will change the very structure of law firms. Even though the focus on the efficiency gains of automating routine tasks is still crucial, AI can now create entirely new forms of value and legal service offerings.

The consensus among the law firm leaders and experts on the panel is that AI is already delivering remarkable efficiency gains, which are already transforming business support functions, freeing up valuable time for lawyers to focus on forging client relationships and higher-value work. Giving a powerful example of this, Marcella Rich explained how Williams Lea is currently using AI to revolutionize the intake and triage process for a global management consultancy client, as well as working with a number of law firms to achieve the same, “We receive hundreds of job requests every day. By using a mixture of AI and expert agents, we have reduced our SLA for work allocation from 30 minutes down to 15, with the triage and estimation of work coming down from around 7 minutes to 90 seconds. We can bring the job in, understand what the person’s asking for, and work out the next best place to send it to. That’s made a huge difference.”

However, the potential of AI, especially with the rise of AI agents, now lies in creating entirely new forms of value, beyond these impressive metrics. As one firm’s chief innovation officer pointed out that, to only focus on efficiency would be to “understate the potential of generative AI for our practices,” because the real opportunity is in leveraging it for “new capabilities… and entirely new offerings that you couldn’t do before.”

A partner and global head of AI advisory practice at a major law firm described how AI has given rise to a new collaborative advisory model, where firms are moving beyond providing legal advice to actively co-designing technology solutions with their clients:

“We have a handful of engagements where our role is to scope a tech solution for an area of the client’s business… showing the art of the possible in our software… that involves sitting down and workshopping with the client on a whole host of things… and then coming up with solutions and agreeing a blueprint.” He also highlighted AI agents as the next major disruptive force as they can be trusted to “act autonomously and do things” on behalf of lawyers, such as directly interacting with clients on complex merger control matters.

This collaborative approach was strongly validated from the client side. A panel speaker representing a global pharmaceutical company shared her experience of partnering with a law firm on a forward-thinking, experimental project. They explained they are exploring how to use technology to tackle a challenge that would be impossible to solve manually “even if we hired 40 people to do it.” They emphasized the value of this partnership, noting that while the outcome is not guaranteed, the law firm benefits as well: “If they experiment with us, they might end up with something that they can use with other clients.”

Private equity is no longer just a client, but a key strategic force

Private equity’s influence on the legal market has become too significant to ignore. Having long shaped the high stakes deal environment and driven partner compensation and mobility; private equity (PE) firms are now increasingly looking to invest directly in law firms themselves. This is not a hypothetical scenario; as one managing partner noted, “There’s no doubt private equity firms are all over law. There’s no surprise about that, because if you just look at the margins in the sector, that’s attractive [to them], and the free cash flow that is generated by law firms is attractive.”

Panelists stressed that seeking private equity investment should not be a goal in itself, rather “an answer to a strategic need.” For firms with ambitious growth, technology, or consolidation plans, PE offers access to capital that the traditional partnership model cannot provide. One senior advisor predicted that as more law firms embrace this, “the difference between the performance of those that have PE investment will outstrip those that don’t.” While the partnership structure presents cultural challenges for a corporate-minded investor, the changing demographics within law firms may make the model more attractive. A managing partner on the panel pointed out that with a large percentage of non-equity partners in the profession, many are “sitting there saying to themselves, this model could be very attractive to me.”

The post-pandemic workplace demands a human-centric talent strategy

The “Lawyer’s Long COVID”—a period of intense remote work followed by economic turbulence and a disrupted deals market—has left a lasting mark on the profession. A key challenge is a generation of lawyers who are less connected to their firms and have different expectations for their careers. In response, leaders are recognizing that building a successful talent strategy is no longer about mandates but about creating a culture and an environment where people want to be in the office.

As one partner aptly put it, “the best technique is to make people feel like they’re missing out if they don’t come in.” This means focusing on fostering a genuine sense of belonging and inclusion and prioritizing the well-being of the whole person. A crucial insight was the need to start with partners themselves. A chief people officer shared their firm’s innovative approach: “We’ve tried to focus on the partner. Because it’s overwhelming for them. If the partner has a sense of belonging, then they can help start supporting everybody else.” By equipping leaders with the resources to manage their own well-being, firms can create a positive ripple effect that enhances engagement, retention, and ultimately, the client experience.

What clients want: A trusted advisor relationship built on new value models and security

In a market saturated with technical expertise, the ability to act as a true, trusted partner has become the ultimate differentiator. Panelists from major global investment banks and corporations agreed that they are looking for law firms that move beyond reactive legal advice to become proactive, strategic advisors. This requires a deep, holistic understanding of the client’s business, risk appetite, and long-term goals. This, in turn, is forcing a reckoning with the billable hour model, with one director at a global bank revealing their ambitious plan to “move to a full-fledged value-based alternative fee arrangement model for the whole book of work” aiming to not see “any invoices for billable hours anymore” by 2026.

Underpinning this entire relationship is the non-negotiable issue of cybersecurity, which was highlighted as a top-level risk that can destroy client trust. The consensus was that firms must be relentlessly prepared. One managing partner described the importance of rigorous readiness exercises: “We have a business continuity exercise once or twice a year… It’s fantastic in terms of putting our people on the spot and getting them used to the type of skills and the way that they would need to respond, the teams that they need to have in place… the playbooks that they’ve turned to.” To drive a culture of vigilance, another leader shared that their firm links cyber awareness to compensation, noting that making it a “behavioral thing” and a matter of “individual responsibility” is critical.

These converging forces—technological disruption, new ownership models, evolving talent demands, and a redefined client partnership—confirm that the legal market has reached a significant turning pint. For law firm leaders, successfully navigating this new landscape requires a strategic playbook centered on innovation, agility, and a deeper-than-ever commitment to client value.

To learn more about the critical shifts impacting law firms, download our exclusive survey, The Technology Revolution in Legal Support: Redefining roles and enhancing value in modern law operations.