Disruption, client demands, shifting dynamics: Navigating the legal industry’s new reality

Law firms are confronting an unprecedented convergence of rapid technological change, rising client demands, and increasing operational challenges that require immediate attention. At Sandpiper Partners’ recent COO/CFO/C-Level Roundtable, sponsored by Williams Lea by RRD, top law firm executives, corporate legal department leaders, and industry experts gathered to address the pressing issues reshaping the industry.

The thought-provoking discussions revealed three key themes that have the potential to define the legal landscape in the coming decade: The impact of artificial intelligence (AI), the evolution of client relationships and pricing models, and the critical need for comprehensive change management to drive the transformation needed to meet this moment.

AI: The great disruptor

AI represents more than just upgrading to new technologies. It’s causing a fundamental reimagining of how legal work gets done.

At present, AI tools have uneven capabilities and can’t replace complete workflows. They excel at specific tasks or sub-tasks, but struggle with the complexity that legal work demands. One panelist, the co-founder of a leading GenAI legal platform shared his perspective, “The tools aren’t good enough to do what an associate does from start to finish on almost any task, because the long tail of these tasks is hard. They can do 80% of certain tasks, then 20% of another task, then 5% of another task.” However, he remained optimistic about AI’s trajectory.

This sobering assessment resonated with the rest of the panelists, who emphasized that successful AI implementation required strategic, process-focused adoption. As one client panelist noted, “We’re thinking about the end-to-end process here, but we’re not just going to open up and say, ‘Yes, have at it. Let’s just throw all our legal work through there.’”

The AI revolution is also revitalizing knowledge management as a core law firm function. The two functions, AI and knowledge management, are intrinsically tied together, as they both address critical challenges in how firms organize and manage information. “This is a journey to understand context and data,” said one law firm panelist. “What happened with the emergence of GenAI is that it made us laser-focused on context.”

More significantly, the panelists agreed that AI adoption wasn’t just about technology; it was also about culture. One panelist pointed out, “People don’t know nearly enough about AI, its features… Prompt injection, for instance, is a real security risk.” It’s clear that firms must invest in comprehensive AI literacy, not just for their lawyers but for all employees who interact with these systems.

Change management: Making transformation stick

Perhaps the most critical theme emerging from the roundtable was the recognition that firmwide transformation requires sophisticated change management capabilities.

Mike Raposa, Williams Lea’s CRO, highlighted a fundamental challenge law firms have with driving change and pointed out a data point from the recent Williams Lea-sponsored Sandpiper Partners law firm survey. “38% of law firms reported that partner resistance to change and adoption to new processes affected their firm strategy,” he said. “Even if something is the most effective, most efficient thing, if you have people that are not really invested in it, they’re not going to buy into it.”

This resistance stems from the unique structure of law firm partnerships, where traditional hierarchical change management approaches often fail. However, one law firm panelist shared their innovative approach, “We’ve created a ‘change office,’ and their job is to assess [change] from a prioritization perspective, figure out the impact of the change… we’re literally trying to map that out quarter by quarter.”

Systematic methods of change management represent a new level of sophistication in how law firms approach transformation. Another law firm panelist emphasized the need for continuous change, adaptation, and improvement. “We’re trying to inculcate a culture of continuous change,” they said. “Do we have the right people in the right seats who have the right level of learning agility?”

Client-centric transformation: Redefining value and pricing

As with every aspect of the industry, the relationship between law firms and their clients is also undergoing fundamental transformation, driven by economic pressures, emerging tech capabilities, and evolving client demands.

As one leading law firm chairperson predicted “the billable hour is going to yield to the fixed fee,” because of AI efficiency gains, and this perspective reflects a broader industry shift toward value-based pricing. This shift is being accelerated by growing demands for predictability and transparency.

Meanwhile, a panelist from a global insurance firm shared the client perspective. “Alternative fee arrangements (AFAs) are preferrable. If you are a panel firm with us, we will have panel rates, but that doesn’t mean we are not interested in also hearing about AFAs that might be specific to a particular matter.”

Both clients and their law firm panelists, however, agreed on the growing importance of using data to strengthen client relationships. The more performance data you provide, demonstrating clear efficiency gains and measurable value, the stronger your business case becomes, regardless of the pricing structure or fee arrangement.

The roundtable discussions revealed an industry in transition, where traditional workflows and competitive differentiators are being redefined. To successfully navigate this transformation, law firms should embrace AI strategically, focusing on process improvement rather than adopting technology for its own sake; build strong, genuine partnerships with clients; and invest in sophisticated change management capabilities that recognize firm culture is as important as tech adoption.

As one panelist concluded, “I do think working in the legal industry is about to become fun.”

Discover how law firm leaders are strengthening their operations to meet the demands of evolving legal landscape. Download our 2025 trends and opportunities in business services report, The technology revolution in legal support: Redefining roles and enhancing value in modern operations.