This week, I’m thinking about how law firms innovate. Attorneys’ individual practices are evolving quickly, while the way firms are run is changing at far slower pace.

Over the last decade, legal tech has improved the craft of law: Smarter research, faster drafting, better collaboration. But the engine driving the business forward—time capture, realization, pricing, staffing, profitability, CRM, management—still runs on processes designed for another era.

Law firms have modernized in the opposite direction of most industries. Banks and large enterprises began with operations, introducing new technologies to core systems like data infrastructure. Only later did they reinvent the customer experience, often pushed to do so by nascent fintech competitors. Law firms did the reverse. We digitized the practice of law while leaving the business of law largely untouched. The financial spine of the law firm still resembles the 1980s: Fragmented data, manual workflows, and systems built for compliance rather than insight.

What’s new is outside pressure. Until recently, legal wasn’t treated as a true vertical by major enterprise software or venture capital. That has changed in the last few years with Casetext’s acquisition and companies like Ironclad, Legora, and Harvey reaching unicorn status at a speed the legal industry had never seen before.

Capital is now flowing into the sector at an unprecedented level, and with it, new expectations for how contemporary technologies can bring the business model of a law firm closer to other modern enterprises. But modernizing the back-office operations at a law firm is more challenging than integrating AI tools into the practice law because of the unique structures of law firms, starting with the Partner themselves.

1 - The unique creature called “Partner”

Transforming law firm operations is not only about governance; it is about identity. Law firm Partners are true five-tool players: practitioners, salespeople, relationship managers, customer-service leads, and internal operators. Few roles in the economy
demand excellence across so many dimensions.

That concentration of responsibility shapes behavior. Partners optimize for what they can personally control: The client, the matter, the next deadline. The firm becomes a federation of brilliant micro-businesses. Silos are not a failure of culture; they are a feature of the model.

Even when firms hire seasoned COOs or innovation leaders, decisions ultimately return to groups of Partners with different incentives and time horizons. Consensus governs where other industries rely on command.

2 - Why digital transformation touched the front office first

Partners live where clients live

Customer success defines a Partner’s value, so why are they not equipped with the world’s best software for that mission? A Partner’s reputation rests on their personal Rolodex, and much of their day is spent ensuring clients receive quality output and timely support.

Increasingly, Partners are under pressure from clients to “augment” their services with AI, typically shorthand for delivering work more quickly and at lower cost. This pressure is likely the driving force behind the rapid adoption of practice of law tools such as Harvey, which promise a direct and tangible impact on the client experience. Legal research, drafting, and correspondence have become prime targets for AI adoption, with more than half of legal professionals reporting active use in 2025.

The business side lags far behind

Only 14% of the same group report using AI to analyze firm data and matters. Even less automated software saw low penetration only two years prior, with just 11% of firms reporting use of CRM systems in an American Bar Association survey. While platforms like Salesforce, Microsoft Dynamics, and SAP became the central nervous system of enterprise firms in other industries, law firms have been slow to leverage analogous tools for tracking relationships and forecasting revenue.

What explains the divergence? Simply put, tools that demonstrated visible and immediate value to clients saw fast adoption, while tools that promised to raise the collective value of the firm saw slow adoption.

3 - Why the back office is harder to change

Front-office value is personal, while back-office value is collective

When a Partner uses AI to draft an email or research an issue, the benefit is immediate and obvious. Adoption feels practical and low risk because it directly improves the work Partners already do every day.

Business tools are different. Standardizing client engagement, analyzing firm data, or implementing a CRM sits further from a Partner’s daily workflow and requires firm-wide coordination. Unlike a bank, where leadership can mandate change, law firms must build consensus—so momentum slows as stakeholders multiply.

Core systems are political, not just technical

Replacing a drafting tool is a workflow decision. Replacing timekeeping or billing can feel constitutional. These systems shape compensation, credit, and power, so any change touches many interests at once.

Stories of firms taking half a decade to leave legacy platforms capture a real dynamic:

• For vendors, inertia looks like a fortress—and a resource sink.

• For Partners, it becomes accepted daily friction, crowded out by other priorities.

Which means change may need to come from the outside.

4 - AI as a bridge

That friction creates an opening for AI. By linking data across matters and Partners, AI can reveal overlapping clients, cross-practice opportunities, and true profitability in real time. This doesn’t weaken the Partner; it strengthens the firm around them.

The goal is not to replace the five-tool Partner, but to add a sixth tool: visibility and efficiency. Law firms already possess something extraordinarily valuable and underutilized—data and expertise. AI’s role is to turn that latent asset into collective intelligence.

How long can legal expertise alone carry legacy infrastructure? Other industries separated production from management, whereas law consolidated them in the persona of the Partner. From that fusion, firms were able to provide exceptional client service but lost key levers to drive operational change.

AI reduces the informational asymmetries between Partners, elevating the resources and opportunities of the firm as a whole above an individual attorney. For Partners, this by no means diminishes the importance of client relationships; rather, it highlights business opportunities that might otherwise be missed, making collaboration easier and more obvious.

That means modernization is likely to begin with better data about the business partners already run.

Legal bytes

Here are the latest updates in legal tech and AI:

Anthropic’s legal plugin shakes up the market - Anthropic released a legal-focused plugin for its Claude Cowork AI, sparking sharp reactions in legal software markets and prompting declines in shares of legacy players as analysts debate what this means for incumbents and legal tech competition (Law.com).

FTC outlines AI enforcement strategy - The US Federal Trade Commission released a memo outlining its strategic approach to antitrust enforcement in the AI space: Taking a slightly more hands-of approach to product innovation while rigorously enforcing false advertising rules (Reuters).

Harvey names its first Chief Product Officer - Harvey, one of the leading legal AI startups, appointed Anique Drumright as its CPO to accelerate product development and deepen adoption across firms of all sizes (Business Insider).

Curious about how automated timekeeping can make you a six-tool Partner?

PointOne’s automated time tracking tool frees up time to dedicate to customer service while providing attorneys with key insights into their business, helping attorneys master all of their various roles.

Book a demo to see how PointOne can save administrative time and stop revenue leakage at your firm.

Until next week,

Katon