{"id":12731,"date":"2026-10-29T11:28:31","date_gmt":"2026-10-29T00:28:31","guid":{"rendered":"https:\/\/insight.thomsonreuters.com.au\/legal\/?p=12731"},"modified":"2026-10-29T11:28:32","modified_gmt":"2026-10-29T00:28:32","slug":"your-firm-has-an-ai-strategy-now-comes-the-hard-part","status":"publish","type":"post","link":"https:\/\/insight.thomsonreuters.com.au\/legal\/posts\/your-firm-has-an-ai-strategy-now-comes-the-hard-part","title":{"rendered":"Your firm has an AI strategy: Now comes the hard part"},"content":{"rendered":"\n<p class=\"wp-block-paragraph\">Closing the AI execution gap is now essential to protecting clients, talent, and long-term firm value.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\" style=\"font-size:16px\">Highlights<\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Law firms with a clear AI strategy report significantly higher satisfaction, yet many still can&#8217;t execute on it.<\/li>\n\n\n\n<li>Shadow AI, strained client relationships, and mid-career talent flight are already costing firms that fall behind on AI execution.<\/li>\n\n\n\n<li>Provisioning trusted AI tools, setting outcome-driven goals, and committing to change management separate firms pulling ahead from those stuck experimenting.<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Having an AI strategy is no longer the differentiator. The\u00a0<a href=\"https:\/\/insight.thomsonreuters.com.au\/legal\/resources\/resource\/future-of-professionals-report-2026-thomson-reuters\"><u>2026 Future of Professionals Legal report<\/u><\/a>, drawing on 736+ law firm professionals across 46 countries, makes this clear: firms with an AI strategy are twice as likely to see AI-driven revenue growth. Most firms already have a strategy. The real question is whether they can execute it, and what it costs when they cannot.<\/p>\n\n\n\n<div class=\"wp-block-columns is-layout-flex wp-container-core-columns-is-layout-8f761849 wp-block-columns-is-layout-flex\">\n<div class=\"wp-block-column is-layout-flow wp-block-column-is-layout-flow\">\n<h2 class=\"wp-block-heading\" style=\"font-size:16px\">Table of contents<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"#strategy-execution-gap\" data-type=\"internal\" data-id=\"#strategy-execution-gap\">The strategy-execution gap is costing firms right now<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"#three-costs\" data-type=\"internal\" data-id=\"#three-costs\">Three costs your firm may not be measuring<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"#executing-differently\" data-type=\"internal\" data-id=\"#executing-differently\">What firms that are executing differently have in common<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"#what-legal-leaders-are-asking\" data-type=\"internal\" data-id=\"#what-legal-leaders-are-asking\">What legal leaders are asking about AI execution<\/a><\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><a href=\"#next-step\" data-type=\"internal\" data-id=\"#next-step\">The next step is not another strategy session<\/a><\/p>\n<\/div>\n<\/div>\n\n\n\n<h2 id=\"strategy-execution-gap\" class=\"wp-block-heading has-text-color has-link-color wp-elements-1\" style=\"color:#d64000\">The strategy-execution gap is costing firms right now<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">More than a third of professionals (35%) say their organisation has an AI strategy, but day-to-day practice does not match it. The technology exists. The plans exist. The gap is in turning both into consistent, measurable results.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">That gap is no longer theoretical. It is immediate and accumulating, showing up in three areas leaders can no longer treat separately. Understanding\u00a0how AI is transforming the legal profession\u00a0means looking squarely at the cost of falling short on execution.<\/p>\n\n\n\n<h2 id=\"three-costs\" class=\"wp-block-heading has-text-color has-link-color wp-elements-2\" style=\"color:#d64000\">Three costs your firm may not be measuring<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The 2026 report identifies three areas where the execution gap is generating real exposure, each tracing to the same root: the distance between what professionals must deliver and the tools firms are actually providing.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>1. Shadow AI and the risk of uncontrolled adoption<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">When firms move too slowly, professionals find workarounds. The report found 34% use AI tools their organisation has not sanctioned. Among those who say their firm moves too slowly, that figure climbs to 41%.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Writing a policy without providing trusted tools pushes the behavior underground. The data points to a clear alternative: provision, not prohibition. When asked what they need to use AI safely, professionals identified three non-negotiables:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Safeguarding confidential data (96%)<\/li>\n\n\n\n<li>Providing verifiable content (94%)<\/li>\n\n\n\n<li>Displaying reasoning they can defend (90%)<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Benchmarking and evaluating AI solutions in legal work\u00a0is now a core operational skill for firm leaders, not just a procurement exercise.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>2. Client relationships already under pressure<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Client expectations have shifted faster than most firms anticipated. The report found 78% of corporate clients say AI-enabled quality is essential or very important, yet only 6% believe most providers are delivering on that expectation.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">What corporate clients now expect from their law firms\u00a0has moved beyond \u201cAre you using AI?\u201d Clients want proof of measurable outcomes: faster turnaround, higher quality, greater capacity. Critically, 32% say they will reconsider their firm relationships within the next 12 months if clear AI-enabled value is not demonstrated.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><strong>3. Talent flight among your most critical people<\/strong><\/h3>\n\n\n\n<p class=\"wp-block-paragraph\">Leadership most often underestimates this one. The risk centers on mid-career lawyers: the people running matters, holding client relationships, and training the next cohort.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Among professionals experiencing an AI value gap:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>24% are considering leaving within the next two years<\/li>\n\n\n\n<li>13% are considering leaving within the next 12 months<\/li>\n\n\n\n<li>The average cost to replace one of those professionals is approximately $232,000<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">Why professional-grade AI shapes hiring decisions\u00a0is no longer a soft benefit. The report found 62% say access to professional-grade AI factors directly into whether they accept a new role.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">Together, these three costs share a common thread: firms closing the execution gap are pulling ahead. The question is what separates them from those still experimenting.<\/p>\n\n\n\n<h2 id=\"executing-differently\" class=\"wp-block-heading has-text-color has-link-color wp-elements-3\" style=\"color:#d64000\">What firms that are executing differently have in common<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">Firms are diverging on how they approach AI, and those differences are compounding. The report identifies three orientations toward AI:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Elevate (52%):<\/strong>&nbsp;Keep the human experience central while AI handles the groundwork<\/li>\n\n\n\n<li><strong>Scale (31%):<\/strong>&nbsp;Do more work with the same headcount without proportional hiring<\/li>\n\n\n\n<li><strong>Reimagine (7%):<\/strong>&nbsp;Build AI-native business models from the ground up<\/li>\n<\/ul>\n\n\n\n<p class=\"wp-block-paragraph\">These are not mutually exclusive. The firms pulling ahead often pursue all three simultaneously. What sets them apart is how deliberately they execute. Three differentiators separate firms getting real value from those stuck in perpetual experimentation:<\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><strong>Clear, outcome-driven goals:<\/strong>&nbsp;AI is tied to measurable results, not scattered pilots<\/li>\n\n\n\n<li><strong>Intentional change management:<\/strong>&nbsp;Professionals understand the why behind adoption, not just the how<\/li>\n\n\n\n<li><strong>Willingness to disrupt the business model:<\/strong>\u00a0Moving beyond incremental optimisation into new service delivery models<\/li>\n<\/ol>\n\n\n\n<p class=\"wp-block-paragraph\">Assessing how your firm is prepared for AI integration\u00a0is the honest starting point. For firms ready to act,\u00a0<a href=\"https:\/\/www.thomsonreuters.com.au\/en-au\/products\/cocounsel-legal.html\"><u>CoCounsel Legal<\/u><\/a>\u00a0is built for professional legal work: verifiable outputs grounded in authoritative legal content, with the reasoning transparency professionals and clients require.<\/p>\n\n\n\n<h2 id=\"what-legal-leaders-are-asking\" class=\"wp-block-heading has-text-color has-link-color wp-elements-4\" style=\"color:#d64000\">What legal leaders are asking about AI execution<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">The 2026 Future of Professionals webinar drew\u00a0pointed questions from firm leaders\u00a0on what the findings mean day-to-day. Here are the most common, answered from the panel discussion.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>Has having an AI strategy become table stakes?<\/strong>&nbsp;Yes. A named AI strategy is now the baseline, not the differentiator. Firms with a defined strategy report significantly higher AI satisfaction compared to just 29% where no strategy exists. Execution is what separates leaders from laggards.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>What does \u201cprovision, not prohibition\u201d mean in practice?<\/strong>&nbsp;This phrase came directly from the webinar panel. Policy alone moves shadow AI underground. The answer is to give professionals secure, purpose-built tools that meet their needs so they have no reason to reach for risky alternatives.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>How soon are client relationships at risk?<\/strong>&nbsp;The panel flagged this as the most urgent finding: 32% of clients will reconsider firm relationships within 12 months if clear AI-enabled value is not demonstrated. Panelist Steve Petrie noted that RFPs are shifting from \u201cAre you using AI?\u201d to \u201cHow is AI adding measurable value?\u201d Only 15% of firms are actively measuring AI ROI today, creating a credibility gap when those questions arrive.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\"><strong>How is AI changing talent development for junior lawyers?<\/strong> The data shows 71% say early-career roles need more structured peer support, and 48% worry judgment is being weakened as AI absorbs entry-level work. Panelist Laura Safdie reframed it: junior lawyers can now start from the firm\u2019s best historical expertise rather than a blank page, then pair that foundation with structured judgment-building alongside senior practitioners.<\/p>\n\n\n\n<p class=\"wp-block-paragraph\">These exchanges reflect how law firm leaders are thinking about AI in 2026. Firms are being asked to execute, not just plan.<\/p>\n\n\n\n<h2 id=\"next-step\" class=\"wp-block-heading has-text-color has-link-color wp-elements-5\" style=\"color:#d64000\">The next step is not another strategy session<\/h2>\n\n\n\n<p class=\"wp-block-paragraph\">AI strategy matters, but execution is now where firms create measurable advantage. Leaders who close the gap between ambition and adoption will be better positioned to protect client relationships, retain key talent, and turn AI investment into durable business value.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Firms with an AI strategy are twice as likely to see AI-driven revenue growth. The cost of falling short: shadow AI, client pressure, and lost talent.<\/p>\n","protected":false},"author":80,"featured_media":12769,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[1564,1937,1964,602,1448,609,629],"tags":[2009,2071,311,1967],"insight_job_role":[604,1573,1457,614,1363],"insight_practice_area":[],"class_list":["entry","author-legal-insight-au","has-excerpt","post-12731","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business-transformation","category-generative-ai","category-generative-ai-2","category-innovation-and-technology","category-leadership-strategy","category-legal-technology","category-strategy-and-business-development","tag-agentic-ai","tag-cocounsel-legal","tag-law-firm-strategy","tag-legal-ai","insight_job_role-knowledge-manager","insight_job_role-lawyer","insight_job_role-managing-partner","insight_job_role-partner","insight_job_role-principal","hentry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Your firm has an AI strategy: Now comes the hard part - TR - Legal Insight Australia<\/title>\n<meta name=\"description\" content=\"32% of corporate clients plan to reconsider their firm within 12 months without clear AI value. 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