Big Law Firms and Generative AI Spending
Big Law firms are accelerating their investment in generative artificial intelligence, with spending expected to surge in the coming months and years. Estimates suggest firms currently spend between $50 and $350 per attorney each month on AI tools, adding roughly 30% more to the cost of existing legal technology platforms.
This means firms may already be allocating up to 0.5% of their revenue on AI, though precise figures remain difficult to pin down. While that number might seem modest considering AI’s potential impact on legal operations, many firms are still in the early stages of adoption.
Early Adoption and Rising Costs
Many firms remain in trial phases, testing various AI products with limited licenses or discounted arrangements offered by technology providers in exchange for promotional partnerships. These introductory deals are expected to end soon, potentially doubling or more the costs when firms move to full deployments.
Some firms are advancing faster. For example, Harvey, a notable legal AI provider, recently announced partnerships with several major firms including Latham & Watkins and Willkie Farr & Gallagher. Harvey now serves 42% of the Am Law 100 and reports over $100 million in annual recurring revenue, signaling growing demand.
Budgeting for AI: Current and Future Trends
One chief innovation officer at a top 50 firm indicated that while AI-related expenses are still manageable, they anticipate significant cost increases in 2026 and 2027 as trial periods end and adoption expands. At present, some AI tools have proved valuable enough that firms are willing to invest in them, even as they seek savings by renegotiating traditional software contracts.
A recent survey by a major financial institution showed that Big Law firms currently spend a mere 0.11% of their revenue on generative AI. However, all surveyed firms expect this to rise substantially next year. The low figure may not account for increased fees in existing legal research tools integrating AI features.
Scaling Up to Support AI Investment
Leaders like Ira Coleman, head of McDermott Will & Emery, have highlighted the financial commitments needed for AI. In a recent discussion, he mentioned the firm’s merger partly aimed to achieve the scale required to invest around $30 million annually in AI—equivalent to about 1.3% of their revenue—far above current averages reported by other firms.
Managing AI Product Proliferation
Firms face decisions about how many AI products to license. Since nearly every legal tech vendor now offers AI-enhanced tools, many firms plan to consolidate around a single general-purpose AI platform supplemented by a few specialized tools for specific practice areas or departments.
Legal technology consultants expect that once trials conclude, firms will streamline their AI toolsets rather than maintain multiple subscriptions. This approach aims to control costs while still benefiting from AI capabilities.
What’s Next for Big Law and AI Spending?
The legal AI market is heating up, with vendors racing to capture firm budgets. The key question for firms is when AI expenses will become a substantial line item in their budgets—and how they will balance cost with the operational advantages AI promises.
For legal professionals looking to stay informed on AI developments and training, resources such as Complete AI Training offer courses and insights tailored to the legal sector.
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