New data shows 93 percent of mid-sized law firms now use AI, up from just 19 percent last year
Mid-sized law firms are adopting artificial intelligence at an unmatched rate, according to Clio’s latest report, as AI adoption among firms with 20 or more employees jumped from 19 to 93 percent in one year.
More than half of mid-sized firms now report using AI either widely or universally, the software company’s 2025 Legal Trends for Mid-Sized Law Firms report shows. In contrast, 72 percent of smaller firms say they use AI in some capacity, but only one in 10 has adopted it extensively.
This shift was consistent across the mid-sized category, with no specific size subgroup within the segment driving the increase.
“It was pretty uniform, to be honest,” says Joshua Lenon, the lawyer in residence at Clio.
He says one key reason for this rapid adoption is that mid-sized firms are structurally well-positioned to implement AI.
Unlike smaller firms that often rely on just a few employees, he says that mid-sized firms have a big enough headcount to support non-billable roles – such as bookkeepers and client intake specialists – that already streamline processes within the firm.
“Having these people on board is a form of automation in and of itself.”
With their human infrastructure in place, Lenon says mid-sized firms can layer AI on top – using tools like AI-enabled bookkeeping or chatbots for client intake.
Lenon says that the legal profession, long considered resistant to change, is warming up to AI faster than expected. In a previous survey, Clio asked lawyers whether AI was hard to use. Only eight percent said yes.
“That’s a shockingly low number for a very technophobic industry,” Lenon says.
“We still have lawyers who print out emails, [yet] they look at ChatGPT and say: ‘Yeah, I can use that. That’s easy.’”
The report also found changes in billing practices, particularly in mid-sized firms, which tend to use a wider range of fee structures than small firms. Almost all mid-sized firms (99 percent) report using multiple billing rates for their lawyers, compared to 85 percent of smaller firms.
On average, mid-sized firms apply eight different hourly rates for lawyers and other legal professionals. Small firms, on average, use three, the report shows.
Lenon says that while small firms show a bell-curve distribution of billing rates, mid-sized firms exhibit a steadily rising slope with no clear peak.
“We broke that down by percentiles, and what we found is that well over 30 percent of mid-sized law firms’ hourly rates are up in that 75th and above the 95th percentile. So, it starts at around $750 and just keeps going up.”
He adds that as more tasks become automatable, firms are beginning to reconsider how they charge clients. The report analyzed around seven million time entries and found that no task is fully automatable, but none are immune to automation either, Lenon says.
He adds that this opens the door to hybrid billing, where firms charge flat fees for high-automation tasks and keep hourly rates for work that requires human oversight.
Mid-sized firms appear particularly open to this shift. They were more likely to report offering flat fees than smaller firms, but Lenon says there is a disconnect between what firms say and what they do.
“There is what the firms are telling us and then what they're doing. What we're seeing is they're still heavily invested in hourly billing… but there is definitively willingness for change,” he says.
The report says that despite their enthusiasm for AI and commitment to modern tools, mid-sized firms are missing a critical piece: a centralized practice management system.
“Only 38 percent of mid-sized firms are utilizing legal practice management software, significantly trailing behind the 71 percent adoption rate seen among smaller firms.”
Lenon says that mid-sized firms are investing in legal tech – document storage, AI tools, and accounting systems – but often fail to integrate them into a cohesive platform.
He adds that data remains fragmented and underutilized without a central hub, like a cloud-based practice management solution. That limits AI's ability to automate tasks across systems.
“They’re buying the pieces but ignoring the puzzle,” he says.
