The Brief:
Law firms used to compete on expertise, rates and talent. Now the battleground is tech.
The firms building software will lead. The ones that don’t will be left behind.
Competition among law firms has always moved in lockstep. You hired the best, raised rates, and built a reputation that kept clients coming back.
That model is under pressure.
The Big 8’s playbook
Australia's top firms are playing it safe, leaning tightly on rate rises and cost discipline. From a partner’s viewpoint, it’s the smartest move. Profits are up, and so the model is working — at least for now.
But rate rises can only go so far before clients push back. And as bread-and-butter work gets automated, cost discipline alone won't protect margins.
That’s why major firms are taking bolder bets.
The full suite
UK and US firms have been quietly building a second business alongside their traditional legal practice.
Take the now A&O Shearman. Its predecessor firm built aosphere back in 2002.
It’s an online legal analysis offering to over 700 blue-chip clients across critical compliance topics such as financial derivatives, shareholder disclosure, and data privacy. The model worked so well that A&O eventually sold a majority stake to a private equity firm, fetching £200m (A$380).
Now, the freshly minted A&O Shearman is developing agentic AI tools with Harvey covering antitrust, cybersecurity, fund formation and loan review. It’s a move to sell the tool back to clients — and even other law firms — under a subscription or usage-based model. A&O Shearman will retain a slice of the revenue.
These agents are the first concrete legal-use cases of agentic AI within a multinational law firm.
And it’s not the only mover.
Taylor Wessing built Outpace, a service platform for early tech companies.
Kennedys builds Kennedys IQ for insurance clients to manage claims.
DLA Piper partnered with Exari to offer contract generation software.
Cooley built Vanilla, a software compliance platform for funds.
Law firms are slowly building their SaaS arsenal to compete. And Aussie firms are eyeing a similar strategic play.
Independent law firm Corrs Chambers Westgarth built out a suite of client-facing tools, including CorrsEdge — a platform that lets start-ups and entrepreneurs build bespoke legal documents using automation and tap lawyers for virtual support.
Gilbert + Tobin, APAC’s most innovative law firm, ran an AI Bounty in 2023 with a $20,000 cash prize for the best internal AI idea. The response filled a pipeline of prototypes.
"Once we can find a way to make the technology, we will pull them off the list and have a go at them”, said G+T CEO Sam Nickless.
These are early moves. But the direction is clear — Australian law firms will need to capitalise on software instead of timesheets to be number one.