The past year has been eventful for the legal industry, with revolutionary technologies, shifting client expectations, and rapid regulatory changes taking up a significant portion of the spotlight. 

But with the year already halfway through, the pace of change has shown no signs of slowing down.

Here, we have explored ten key legal trends shaping the legal landscape in 2025, reflecting on what it means for legal teams across the world.

These are the top ten legal trends for 2025:

#1 Artificial Intelligence (AI) continues on a bullish trend

"I think Artificial Intelligence (AI) will eventually be a true gift to legal teams by freeing up more time for lawyers to be creative rather than just doing lower level types of reviews that can be automated.”
~ Genevieve Kelly, General Counsel at Goodwin Procter LLP
Blending Legal Expertise and Business Acumen

The legal industry has a reputation for being resistant to change. However, the last few years have seen a dramatic shift in stance across the sector, especially with technology and generative AI.

Studies by the Thomas Reuters Institute reveal great support for generative AI, with 81% of legal professionals believing that AI is compatible with legal work.

Indeed, generative AI tools are capable of streamlining numerous high-volume, mundane tasks like contract creation, document review, and case analysis, allowing legal teams to save costs and apply more focus on strategic areas of their responsibilities.

Also read: Top 5 Free AI Tools for In-House Legal Teams

On a global scale, generative AI in the legal market is growing at a CAGR of 31.6%, and researchers expect it to hit a market size of $781.55 million by 2032.

This signals a wake-up call for law firms and organizations reluctant to innovate with AI, as they risk losing their competitive edge and trailing in the dust.

Also read: How Generative AI is Transforming the Legal Tech Landscape

#2 Hybrid work schedules in law firms and corporate legal departments

In 2020, organizations and law firms across the world initiated work-from-home policies as a coping mechanism in the face of a pandemic-induced lockdown. In 2025, and the lockdown is now in the distant past. However, it has significantly changed the face of modern employment, even among legal professionals.

More law firms are moving away from traditional, fully in-person work environments, implementing hybrid work schedules for their legal teams. A report by Empsight and the Association of Corporate Counsel (ACC) revealed that 63% of legal professionals are currently working on a hybrid arrangement, blending onsite appearance and remote work every week.

The concept of hybrid work is embraced more among the teeming young legal professionals, with nearly half (44%) saying they’re willing to leave their current employer for one that offers better flexibility.

“There are a number of candidates who are saying if there are no remote working arrangements, they’re just not interested in the opportunity.”
~ Heather Fine, Partner at Major, Lindsey & Africa
In-house hiring market is incredibly active, particularly for mid-level roles

#3 More funds for legal tech

Organizations are becoming more money-conscious in the face of increasingly volatile business conditions. This has resulted in a steady decline in outside counsel financing as companies bring more work in-house to save costs.

To make up for lost access to external specialties, organizations are focusing more on long-term investments in technology and in-house talent development.

In the first half of 2024, funding for legal technology companies reached approximately $2.422 billion, nearly matching the $2.443 billion raised during the same period in 2023. This stability shows a robust interest in legal tech despite economic uncertainties.

According to Gartner, 66% of legal leaders have expressed plans to accelerate their investments in legal technology, signaling a positive future for technology in the legal field.

#4 The rise of legal ops

“Legal Operations are to lawyers what agents are to artists. They let lawyers focus on their art and provide the support they need to get the best results possible.”
~ Nicolas Leroux, CEO of Kalexius

57% of law firm and 45% of in-house legal professionals legal professionals say they currently have a legal operations function established in their organization.

This is driven by the increasing adoption of technology in legal departments and the mounting pressure on in-house legal teams to manage resources while strategically contributing to business objectives.

Despite widespread budget cuts affecting many legal departments, legal ops teams appear to be bucking this trend. A remarkable 81% of legal ops professionals anticipate budget increases in the next financing cycle, having had a similar financial vote of confidence in 2023.

This also extends to team size, with 94% of legal ops teams predicting further expansion in the next two years.

Also read: Top Skills Every Legal Ops Professional Must Have

#5 Cybersecurity is a growing concern for legal professionals

As law firms and corporate legal departments continue to embrace digital transformation, cybersecurity is an increasingly crucial concern for the legal sector.

2023 was an eye-opener, with the number of cyberattacks hitting a record high. In 2025, ransomware groups are expected to ramp up their sophistication even further.

In light of this, more law firms are tightening their cybersecurity measures. A study by US Legal Support shows that 78% of law firms have established cybersecurity policies. This reflects a growing commitment by legal professionals to maintain the security and integrity of legal data in the face of evolving cyber threats.

Also read: Writing a Company Cybersecurity Policy: Best Practices + Free Template

#6 Mainstreaming Alternative Legal Service Providers (ALSPs)

Alternative Legal Service Providers (ALSPs) refer to teams of experts that deliver legal services outside the traditional law firm structure. They can exist as independent entities or a subsidiary of an existing company offering services that complement law firms and corporate legal departments. This includes contract management, legal process automation, litigation support, and more.

ALSPs have gained prominence in recent years due to their ability to offer cost-effective, efficient, and technology-driven solutions for various legal needs. This is driven by globalization, technological progress, and increased focus on positive client experience.

According to Thomson Reuters, the ALSP market has been on a consistent rise in the last decade, growing by 145%  since its first report in 2015.

Law firms and in-house legal departments are exploring more ways to collaborate with ALSPs in a bid to maximize cost efficiency and improve outcomes. As stated in the Thomson Reuters report, 26% of large law firms anticipate increased spending on ALSPs compared to 3% that expect a decrease. In corporate legal departments, 21% say they plan to increase their spending on ALSPs, while only 8% anticipate a reduction.

#7 Alternative Fee Agreements (AFA) and the slow decline of billable hours in legal services

An Alternative Fee Arrangement (AFA) is a value-based pricing framework for legal services where clients make payments using non-hourly methods like flat fees, tokens, or performance-based rates. This means legal professionals no longer have to charge clients solely based on the number of hours spent on a service.

A study by Litera reveals a 60% increase in the use of AFAs among legal firms, with 64% of its survey respondents favoring the removal of the conventional billable hour system.

Billable hours have long dominated the legal profession, but it has increasingly come under scrutiny for promoting inefficiency and unpredictability in legal costs.

This increased adoption of AFAs is driven by changing client service expectations, the need for cost predictability, and the shift toward value-driven (rather than time-driven) services.

"Clients are becoming more sophisticated and want to talk about value instead of just hours. The billable hour isn’t going away completely, at least not anytime soon. However, alternative ways of more accurately capturing the value of what’s being delivered to clients is going to change."
~ Barry Solomon, VP, M&A Integration at Litera

#8 Social recruiting is becoming the new norm

The legal sector is experiencing significant demand for skilled professionals, with many firms struggling to fill roles amid high turnover rates. Associate attrition currently sits at 18%, prompting firms to explore more opportunities to attract and retain talent.

With 60% of the world’s population spread across various social networks, social media is fast climbing the ladder as one of the most promising channels for job search and recruitment. 

Careerarc reports that 57% of Human Resource (HR) executives spend up to 6 hours per week executing and maintaining social media talent acquisition strategies.

This approach is particularly beneficial for legal headhunters in large and small firms as it allows them to tap into a wider pool of talents, including passive job seekers who may not be searching actively for a new role but could be interested in the right opportunity.

#9 New demands for in-house counsel

In-house legal departments were historically tasked with one primary responsibility: providing legal advice.

However, recent reports show this is rapidly changing as more businesses hold legal teams accountable in areas outside their legal remit, requiring them to make contributions that drive business outcomes.

A report by Thomson Reuters revealed that 83% of General Counsel (GC) either sit among their company’s board or have a voice with the board, playing crucial roles in strategic initiatives.

In a different report, Deloitte revealed that 62% of legal departments report to their company management and are frequently consulted about decisions that impact business.

75% of corporate legal departments say they expect to expand their responsibilities to include risk management and ESG (Environmental, Social, and Governance) strategy in the next five years.

All these illustrate the evolving roles of in-house counsel, who are increasingly expected to contribute to strategic decision-making and drive business outcomes beyond their traditional legal advisory function.

#10 Stronger emphasis on compliance and risk management

Regulatory compliance now ranks as a top strategic priority for legal departments across the world. Reports show that more in-house professionals believe the constantly changing regulatory landscape will continue to pose risks in the coming years.

22% of corporate legal departments highlighted complying with regulatory developments as their topmost priority—a significant shift from just four years ago when it was only the fifth-most crucial objective among legal departments.

This is driven by the constantly evolving regulatory landscape amid emerging technologies, cybersecurity concerns, and ESG obligations.

64% of compliance professionals in law firms and other organizations expect stricter enforcement actions in 2024, especially for newer regulations like the EU's sustainability disclosure requirements and the Network and Information Security (NIS2) Directive.

This stresses the need for legal professionals to proactively adapt their strategies, deepen their expertise in regulatory matters, and collaborate with business units to manage risk and anticipate regulatory changes effectively.

How SpotDraft is helping legal teams to innovate

SpotDraft is at the forefront of legal tech, transforming how legal teams operate through its ecosystem of innovative, AI-powered solutions.

At its core, SpotDraft offers a robust Contract Lifecycle Management (CLM) platform designed to simplify end-to-end contract management for legal teams. With SpotDraft, you can:

#1 Accelerate contract drafting

You can leverage its robust customizable templates to create contracts quickly and at scale. SpotDraft  also enables you to turn business documents into contract templates in less than 5 minutes using its AI solution.

#2 Automate approval workflows

You can skip the painful wait times and ramp up contract TATs by automating approval processes for specific contracts. SpotDraft lets you set triggers that push contracts to the next stage once they meet established criteria.

Also read: How to Set Up an Efficient Contract Approval Process (+Template & Examples)

#3 Store contracts securely

You can consolidate all your legal documents in one secure location. SpotDraft enhances accessibility by including robust filters and access control mechanisms to ensure the right person can access the right document at any time.

Also read: Contract Storage: Tips to Store Your Contracts Effectively

#4 Extract insights

You can dive deep into contract data to access important insights about contract performance and ways to optimize for better results using SpotDraft’s robust contract analytics functionality.

Also read: Rethinking In-House Legal OKRs, KPIs, and Goals

Want to check out its complete collection of features and even get a personalized demo? Click here to begin.

Law industry trends: bottom line

The legal landscape has been through significant transformations in the last few years. Yet, as technology continues to advance, we're almost certain there's more to come.

To stay competitive in this current ecosystem, you must cultivate a habit of adaptation, innovation, upskilling, and collaboration.

Ultimately, we hope that the legal trends discussed in this guide have armed you with sufficient insights into what's on the horizon and how to prepare for the next wave of change.

Click here for a personalized demo of SpotDraft.