How GenAI and tech change are improving productivity and reshaping the law firm workforce

Chargeable hours up as productivity push continues

Productivity and profitable growth remain the biggest challenges for law firms, and PwC’s Law Firms’ Survey 2024 reveals a continued push by firms for greater productivity from their fee earners over the last 12 months. With the emphasis on commercial performance, chargeable hours increased across the fee earner grades - excluding partners - for most of the Top 100 law firms, and there was also a rise in utilisation of between 1% and 5% across most grades. 

However, this relentless pressure on chargeable hours and utilisation to drive productivity and profitable growth isn’t sustainable in the long term, leading to lawyer burnout and people leaving the sector in pursuit of better work/life balance. 

Workforce cost challenges are also increasing, with greater global competition for talent forcing salaries up, and the impact of changes such as the increase in employer’s National Insurance Contributions from 13.8% to 15% from April 2025, which was announced in the government’s Autumn Budget. 

Technology increasingly provides a huge opportunity to better address these workforce cost and productivity challenges.

The growing GenAI impact on productivity, pricing and people

Most law firms are still at the experimental stage of GenAI usage, in a narrow range of practices and functions, but the potential impact of the technology on current law firm pricing, business models and ways of working should not be underestimated. A third of Top 100 firms in this year’s Law Firms’ Survey believe at least 16% of existing chargeable work could be automated through the use of GenAI tools, while 83% of Top 10 firms believe they will be able to use increased productivity gains from GenAI to do more work for the same clients. 

At this scale, disruption to current law firm operating models and pricing would be unprecedented. It will force law firms to change how they measure value beyond ‘time and materials’ chargeable hours and utilisation. It will necessitate a complete rethink of recruitment strategy, training and skills and the shape of the fee earner pyramid.

There are indications from the survey that some law firms are already starting to pre-empt where efficiencies can be found in some grades due to greater use of automation and GenAI. The Top 10 firms, for example, are the ones investing the most heavily in GenAI and they have already seen a 9% reduction in legal executives and paralegals in the past year.  

But it’s not just about the technology. The right skills will be crucial to maximising the benefits of emerging tech and GenAI. Across all sectors, almost two-thirds (64%) of UK CEOs say that AI will require most of their workforce to develop news skills in the next three years according to PwC’s 27th Annual CEO Survey.

Law firms should also expect increased competition and cost for lawyers with specialist tech skills, with PwC’s GenAI jobs barometer study showing a +27% wage premium for lawyers with AI skills in the UK, and +49% in the US.

The need for a more diverse culture 

IT transformation is a top priority for more than half of the Top 100 law firms over the next two years, particularly around cloud modernisation and migration, data strategy, and customer relationship management (CRM). These technology-focused priorities highlight the need for law firms to recruit newer executive roles such as Chief Transformation Officer, Chief Operating Officer and Chief Data Officer. But these roles also need to be empowered and incentivised - possibly by being made equity partners - to drive change and challenge entrenched attitudes to technology investment and change at senior levels of law firms.

Greater diversity in law firms’ workforce is also key to fostering a broader range of ideas and experience. There are positive signs of continuing progress on diversity in this year’s Law Firms’ Survey, with female representation at full equity partner level continuing to trend upwards for the Top 50 firms, rising to just under 30% for the Top 10 firms, and there were similar rises for ethnic minority representation. 

Firms highlighted social mobility, disability and sexual orientation as other key areas of focus for improving workforce diversity. But diversity is also about overcoming traditional sector insularity and bringing in - and listening to - outside expertise from sectors such as financial services.

The changing skills and capabilities needed

Amid this disruption and change, law firms need to be laser focused on the talent and skills, across all grades and parts of the firm, needed for sustainable growth.

Lawyers will need to quickly get up to speed on the ‘non-lawyer’ aspects of running a firm, and 79% of the Top 100 firms are already actively pursuing commercial training for partners and fee earners. But it’s broader than purely commercial acumen and leading firms are already starting to invest in development programmes to foster traits in transformative leadership and leading through change.

Business development is also increasingly important to unlocking growth. A global study by DCM Insights of nearly 3,000 partners across 40 professional services firms about how they approach business development reveals so-called ‘activator’ traits of top performing rainmakers. 

These behaviours include committing to business development as a critical and proactive part of the job, spending time identifying and engaging with prospective clients on key trends and issues, building their network and seeking out opportunities to introduce clients to partners from other practice areas in the firm who could provide value. The study found that moving from weak to strong ‘activator’ skills results in revenue generation increase of up to 32%. 

Law firms will also need to review and refine their business support services, and the shape and size of their operating models. Increasing use of shared services centres, managed services and offshoring or near-shoring will be essential to reducing costs while maintaining productivity levels.

The future fit law firm workforce

How can law firms rethink traditional employee value propositions and how they balance the necessary push on productivity and performance while retaining a culture where people don’t burn out and leave? There is no easy answer, but automation and GenAI offer opportunities to achieve a better balance for people. Firms will also need to look at developing wellbeing strategies to ensure employees have enough time for recovery and care between the traditional peaks and troughs of the legal workload. 

Ultimately, tackling these fundamental productivity and growth challenges in the legal sector requires investment in a deeper workforce transformation exercise to reflect the greater use of tech and ensure the shape of the workforce meets the future strategy of the firm.By building stronger risk management capabilities, thinking about broader resilience across the technology infrastructure and supply chain and investing more in cyber preparedness, law firms can adapt and respond more effectively to whatever disruption and challenges lie ahead, protecting their reputation and client data with confidence.