The legal industry is on the brink of a transformative era. As we approach 2026, small and mid-sized law firms face both unprecedented opportunities and challenges driven by rapid technological advancements – most notably, the maturation of AI. A recent webinar hosted by Law.com, featuring experts from CARET Legal, Mitratech, and Integris, explored what firms can expect in the coming year and how they can prepare for success.
Here are the 8 critical insights your firm needs to navigate the future.
1. AI Adoption and Building Trust
One of the most pressing questions for law firms is whether to invest in AI or stick with traditional automation. Alyssa Anzur from Mitratech emphasized the importance of understanding the desired output:
- Deterministic tasks (where every parameter is controlled) are better suited for automation
- Non-deterministic tasks (open-ended outputs like summaries or first drafts) are ideal for generative AI
Before jumping into AI, firms should clearly define their goals, desired outcomes, and workflows.
Greg Cooke of Integris highlighted that trust in AI starts with structure and the need for governance to reduce risks like AI hallucinations (i.e. incorrect or misleading results that are created). His recommendations include:
- Implementing human-in-the-loop policies to ensure every piece of content is reviewed by an attorney
- Using enterprise AI tools (ex: Microsoft Copilot) built around closed, restricted environments and connected to verified legal databases
- Training staff to recognize and validate AI outputs
- Creating an AI acceptable use policy to set clear boundaries
Trust in AI starts with structure and accountability, and choosing tools built around secure, restricted environments is key.
2. Will AI Impact Jobs?
CARET Legal’s CEO, Jay Kuhlman, addressed one of the most common concerns: job displacement.
- AI is an augmentation tool, not a replacement. It enhances workflows rather than eliminating roles
- Attorneys will spend less time on routine tasks and more on high-value judgment work
- AI acts as a workflow engine, automating repetitive processes like matter updates, case summaries, and client communications, freeing lawyers to focus on strategy and client service
The takeaway? AI will reshape roles, but it won’t erase them – it will empower legal professionals to deliver greater value.
3. Choosing Secure Technology Partners
Selecting the right technology partner is critical. Alyssa Anzur recommends firms look for vendors who:
- Have a proven track record of working with similar firms
- Provide transparency and analytics, such as dashboards for usage, adoption rates, and workflow efficiency
- Offer centralized control for administrators to manage templates, prompts, and permissions
- Include auditability and clear data governance policies
But technology alone isn’t enough. Greg Cooke warns that cyber threats are evolving rapidly, with AI-powered phishing, social engineering, ransomware, and supply chain attacks on the rise. To stay protected, firms should:
- Adopt zero-trust security models and multi-factor authentication
- Vet vendors rigorously for compliance and security certifications
Data-driven insights and strong security practices combined with the right vendor partnership are essential for successful adoption and long-term resilience.
4. Driving ROI Through Effective Change Management
Technology adoption alone doesn’t guarantee success – behavioral change is the real driver of ROI. Jay Kuhlman emphasizes that firms should measure impact using meaningful metrics such as:
- Efficiency Gains: Time saved through AI-enabled workflows
- Client Experience: Faster response times and shorter matter cycles
- Financial Performance: Improved realization rates and profit per matter
- Security Maturity: Readiness for incidents and compliance standards
However, achieving these results requires more than tracking numbers; it demands a cultural shift. Resistance to change, especially among senior partners, is common. Alyssa Anzur recommends starting with internal advocates and showcasing quick wins, like saving hours on document creation. Vendors and consultants can play a critical role in guiding firms through this transition, ensuring that technology adoption translates into measurable business outcomes.
5. The Future Proof Lawyer: AI Skills and Operational Efficiency
As AI streamlines operations, the skills required to succeed will change. Jay Kuhlman identified three essential skills for future legal professionals:
- Prompt Engineering: knowing how to ask the right questions
- Workflow Literacy: understanding how work moves across matters
- Data Fluency: treating data as a strategic asset
Alyssa Anzur explained that AI is revolutionizing operational efficiency in two major ways:
- Reducing Low-Value Tasks: AI and automation eliminate repetitive, time-consuming processes that free attorneys to focus on strategic work and client relationships.
- Accelerating Time-to-Value: AI-enabled platforms provide turnkey templates and smart recommendations, helping firms implement workflows quickly and boost adoption.
In short, AI acts as a collaborator, streamlining operations while improving accuracy and speed.
6. Cloud vs. On-Prem: The Modernization Dilemma
Greg Cooke advised firms to adopt a hybrid approach, moving email, file storage, and collaboration tools to the cloud while hardening legacy systems. Cloud platforms offer better security and enable advanced AI capabilities, making them essential for long-term competitiveness.
Jay Kuhlman emphasized that moving to the cloud is not just about transferring data – it’s about transforming outcomes. Based on CARET’s experience migrating hundreds of firms from on-premise systems to a modern cloud-based legal operating system, here’s what firms gain:
- More accurate billing
- Fewer write-downs
- Real-time matter visibility and collaboration
- Improved client satisfaction
- Stronger security posture
This transition is a journey, not a flip of a switch. Firms should prioritize and stage their migration thoughtfully to maximize benefits and minimize disruption.
7. Collaboration Between Firms, Clients, and ALSPs
Jay Kuhlman emphasized that collaboration is now mission-critical for competitiveness. Law firms, clients, and ALSPs (alternative legal services provider) can no longer operate in silos. Instead, they must leverage:
- Shared Workspaces and Workflows: Integrated platforms enable real-time visibility into case status, documents, and decisions
- AI-Driven Connectivity: Technology helps unlock the value chain by connecting firms, clients, and ALSPs seamlessly
- Long-Term Value: Jay noted CARET customers stay an average of 14.5 years because of continuous investment in “connective tissue” that drives collaboration and efficiency.
Bottom line: Firms that embrace connected systems and collaborative workflows will deliver greater value and stay ahead.
8. The Future of Billing: Preparing for Hybrid Pricing Models
AI will shrink routine hours but increase high-value judgment work. Jay Kuhlman predicts a shift toward hybrid pricing models, combining traditional hourly billing with fixed fees and recurring subscription models. Firms must track profitability and performance accurately at the matter level to stay competitive.
Final Thoughts
2026 will be a year defined by rapid, necessary change for small and mid-sized law firms. Success will depend on strategic technology adoption, robust cybersecurity, and a culture of continuous learning. Firms that embrace AI thoughtfully, modernize their infrastructure, and invest in skills development will not only survive but thrive in this exciting new era of law.
