Canadian law firms move faster on AI than global peers

Global research from LEAP Legal Software finds Canadian law firms lead in adopting emerging technologies, showcasing strong confidence in the impact of legal-specific AI solutions and tools

TORONTO, March 23, 2026 /CNW/ - Law firms worldwide increasingly see artificial intelligence as central to improving productivity and profitability, but uneven adoption of the technology risks creating a growing performance divide across the profession, as suggested by new global research from LEAP Legal Software. The findings suggest firms that integrate AI effectively may gain a structural productivity advantage, while slower adopters risk falling behind on efficiency and margins.

LEAP Legal Software's Profitability in Law: Global Report 2026, based on a survey of 700 legal professionals across Australia, New Zealand, the United States, Canada, the United Kingdom and Ireland, shows that while firms remain confident about their growth prospects, structural pressures are reshaping how profitability is achieved.

In Canada, 45% of respondents report that their firms had high potential for profitability, and 68% state that their firm's profitability had gone up in the last 12 months. At the same time, over two-thirds (70%) of Canadian respondents report that profitability is currently a high or top priority in business decision-making, signalling a profession increasingly focused on operational performance rather than expansion alone.

However, the research shows that for Canadian firms the biggest barriers to turning that ambition into results include revenue blockers, like pricing pressures (43%), lack of AI tools to identify opportunities or automate outreach (50%), and limited CRM or client management systems (42%), and efficiency blockers, like too much administrative work (43%), limited AI for document review or research (38%), and too many systems (37%).

"Canada's legal sector is entering a productivity phase," said Malcolm Muthulingum, Chief Executive Officer, LEAP Legal Software Canada. "Firms are ready for change, and they're confident about their potential for growth--but in order to scale efficiently they must evaluate and optimize their technology stacks."

AI emerging as a defining profitability lever

Forty-two percent of Canadian legal professionals lose more than two billable hours per day, according to the report's findings. With firms facing mounting pressure to improve productivity, Canadian legal professionals are finding major time savings by leaning on AI. In fact, 75% of respondents state that they save a moderate to significant amount of time thanks to AI, boosting firm efficiency.

Against this backdrop, AI is emerging as one of the profession's most significant efficiency tools, with 23% of Canadians saying it saves their firm a significant amount of time (the highest globally), and 43% reporting that legal-specific AI is delivering the greatest impact. What's clear from the responses is that Canadian legal professionals are interested in implementing legally compliant, governed AI.

However, adoption remains uneven across markets, practice areas and firm sizes, suggesting that the benefits of AI may not be distributed equally across the profession.

"Canadian legal professionals are already seeing the benefits that come from adopting AI, and pairing it with their legal expertise," said Malcolm Muthulingum, Chief Executive Officer, LEAP Legal Software Canada. "What's critical now, is for the firms that have not yet considered implementing AI into their practices to seriously evaluate their options, as failing to incorporate this technology better positions their competitors to protect margins, manage workload, and deliver consistent service."

Pricing pressure and capacity constraints shaping growth

While legal professionals remain optimistic about the revenue potential of their firms, the research indicates that structural constraints are shaping how growth will be achieved. Pricing pressure continues to limit firms' ability to increase fees, while capacity challenges are affecting their ability to scale work effectively.

Around half of Canadian legal professionals say their firms are challenged by staff turnover (48%) and burnout (52%), and roughly the same amount (50%) say their firms struggle with knowledge retention.

Workforce stability and knowledge continuity remain critical

Investment in people continues to be central to firm strategy, with respondents globally identifying competitive salaries as a top investment. However, retention pressures remain present across the profession, with workload intensity and burnout continuing to influence workforce stability.

The research also highlights risks linked to knowledge continuity. Forty percent of Canadian respondents report limited or no documented processes in place when staff leave, creating potential gaps in training, consistency and service delivery.

In a profession built on expertise, undocumented workflows can quietly undermine operational resilience and financial performance.

Technology integration shaping operational efficiency

Administrative workload remains one of the clearest constraints on profitability. Many legal professionals (32%) report spending between two and five hours per day on administrative tasks, with 10% spending more than five, reinforcing the importance of workflow optimization and system efficiency.

Legal professionals increasingly identify automation of repetitive workflows, document management and legal research tools as the technology investments most likely to improve productivity. Seventy-one percent of Canadian respondents use over three different platforms each day, with 40% listing consolidating into one platform as the best investment their firm could make to improve profitability.

At the same time, platform fragmentation continues to affect workflows, with many professionals working in multiple disconnected systems on a daily basis. This fragmentation can dilute the intended benefits of technology investments by slowing processes and increasing training demands.

Confidence remains strong, but execution will define outcomes

Taken together, the findings suggest the legal sector is entering a phase where profitability will depend less on demand alone and more on how effectively firms manage productivity, technology and knowledge.

Firms that fail to address these operational gaps risk seeing strong client demand translate into weaker financial performance.

Research Methodology
The Profitability in Law: Global Report 2026 draws on a quantitative survey of 700 legal professionals across Australia, New Zealand, the United States, Canada, the United Kingdom and Ireland. Fieldwork was conducted between 10-28 November 2025. Participants included firm leaders, partners, senior practitioners and operational decision-makers representing a range of firm sizes and practice areas. The study examined how firms are managing profitability across four core areas: strategy and revenue, people and retention, technology and operations, and AI adoption. Fieldwork was analyzed in December 2025 to identify both global trends and market-level differences in how firms are responding to profitability pressures.

About LEAP
LEAP combines case management, document automation, legal accounting, billing, and AI into a single solution. Designed to maximize law firm efficiency, LEAP's award-winning technology helps legal professionals enhance organization, accelerate document creation, reduce manual work, and improve client services. Learn more at leaplegalsoftware.ca.

SOURCE LEAP Legal Software Canada

Media Contact: Michelle Spezowka, Director of Marketing, LEAP Legal Software Canada, 647-395-4611, [email protected]