AI is becoming a profitability question for Australian law firms
Australian law firms are confident about their future, but LEAP Legal Software’s Profitability in Law: Global Report 2026 shows pricing pressure, administrative workload and uneven AI adoption are changing how firms think about growth.
TechEdge AI spoke with Carly Stebbing, Head of Employment Law at LEAP Legal Software, about how AI is changing the legal industry, where Australian firms are falling behind, and what it will take for firms to use AI safely and effectively.
Q: What is the current state of the Australian legal sector?
Australian firms are confident, but they are also under pressure. The research found 92 per cent of Australian legal professionals believe their firms have moderate to high potential to improve profitability, and half say that potential has improved in the past year.
However, 66 per cent cite client pricing pressure as the biggest barrier to revenue growth. That tells us firms are not just thinking about how to win more work. They are thinking about how to deliver that work more efficiently.
Q: Is AI becoming a profitability tool for law firms, rather than just a productivity tool?
Yes, because productivity and profitability are now closely connected. If lawyers are spending too much time on administration or repetitive tasks, that affects the commercial performance of the firm.
The research found 54 per cent of Australian respondents believe document review and analysis is the best AI profitability use case. Almost half, 49 per cent, believe drafting and document generation would increase profitability. That shows firms are looking at AI in very practical terms.
Q: Why are Australian firms behind other markets on legal AI adoption?
The interest is there, but the adoption is not yet as embedded as it is elsewhere. Only 16 per cent of Australian respondents use legal-specific AI daily or as part of a core workflow, which was the lowest result globally.
Globally, 57 per cent of respondents report regular use of integrated AI solutions. In Australia, that number is 37 per cent. So Australian firms can see the opportunity, but many have not yet moved from interest to everyday use.
Q: Is trust now the biggest barrier to AI adoption in the legal sector?
Trust is definitely one of the biggest issues. The research found 32 per cent of Australian respondents have low or no trust in legal technology providers to integrate AI responsibly, while only 20 per cent report high trust.
That caution makes sense. Legal work depends on accuracy, confidentiality and professional judgement. The issue is not whether firms should use AI. It is whether they are using the right AI, in the right environment, with the right safeguards around it.
Q: Where is AI most likely to make a measurable difference for Australian firms?
The strongest areas are document review and analysis, legal research and case law analysis, and drafting and document generation.
Half of Australian respondents believe legal research and case law analysis is the best AI deployment use case for firms. Document review and analysis is also strong, with 54 per cent identifying it as the best AI profitability use case and 47 per cent already using AI for it.
These are areas where legal-specific AI can support lawyers without replacing the need for legal judgement.
Q: What separates the firms that will benefit from AI from those that risk falling behind?
The firms that benefit will be the ones that use AI properly and safely, rather than treating it as a shortcut.
Australian firms are dealing with pricing pressure, administrative workload and fragmented systems. The research found 66 per cent spend one to two hours daily on admin, while 68 per cent use three or more platforms daily.
Firms that integrate AI into their workflows responsibly will be better placed to improve efficiency. Firms that wait too long, or rely on tools that are not designed for legal work, risk missing the productivity gains AI is already starting to deliver elsewhere.
About Carly Stebbing:
Carly Stebbing is Head of Employment Law at LEAP Legal Software and an award-winning employment lawyer and legal innovator with more than 20 years’ experience advising Australia’s largest employers, senior executives, and employees.
At LEAP, Carly leads the development of a technology-driven employment law platform for lawyers. Previously, she founded Resolution123, one of Australia’s first tech-enabled legal platforms, which was later acquired by Longton Blackwell, where she served as Partner and Head of Employment Law.
Carly serves on the Law Society of NSW Employment Law Committee and is a recognised thought leader on employment law, legal innovation, and the future of legal practice. Her accolades include recognition in Doyle’s Guide, Lawyers Weekly Women in Law Innovator of the Year, and WLANSW Change Champion of the Year. She is also a regular media and podcast contributor on workplace law and legal technology.
About LEAP Legal Software:
LEAP Legal Software
LEAP Legal Software is a cloud-based legal practice management platform supporting over 71,000 legal professionals worldwide. With more than 30 years of innovation, LEAP integrates matter management, legal accounting, document automation and AI-driven tools to help law firms operate more efficiently and profitably.
Australian-owned and headquartered in Sydney, LEAP delivers practice-area-specific solutions across Property, Estates, Personal Injury, Criminal Law, Litigation and Family Law, combining deep local expertise with the experience of a global legal technology organisation.
