AI set to define law firm profitability as adoption gaps widen across New Zealand sector

Auckland, New Zealand - 23 March 2026 - Law firms in New Zealand are increasingly seeing 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 fromLEAP Legal Software.

 The survey of 700 legal professionals globally including 219 in Australia and New Zealand, shows that while firms remain confident about their growth prospects, structural pressures are reshaping how profitability is achieved.

In New Zealand, 94% of legal professionals believe their firms have moderate to high potential to improve profitability, with 61% saying that potential has increased over the past year. At the same time, 76% report that profitability is now 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 pricing pressure, administrative workload and uneven AI implementation are shaping firms' ability to convert that ambition into results.

 "New Zealand law firms recognise that profitability is increasingly tied to productivity," said Tina Shergold, Head of LEAP Australia & New Zealand.

 "As pricing pressure and workload demands increase, firms are focusing more closely on how efficiently work is delivered and how technology can support that process."

AI emerging as a defining profitability lever

The findings show firms face mounting pressure to improve productivity, with 39% of New Zealand based respondents identifying client pricing expectations as a major constraint on revenue growth, substantially lower than the global average of 51%. At the same time, many legal professionals report spending significant portions of their day on administrative tasks, limiting the time available for billable or strategic work.

Against this backdrop, AI is emerging as one of the profession's most significant efficiency tools. The majority (69%) of New Zealand based respondents report regular use of integrated AI solutions, and 78% say the technology is already saving their firm moderate to significant time.

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.

"AI is not replacing legal expertise, but it is changing how efficiently that expertise can be applied," Shergold said. "We are now seeing broad adoption of AI tools across the profession in New Zealand, particularly for tasks like document drafting, research and workflow automation. The firms that integrate these capabilities most effectively will be better positioned to manage workload, improve efficiency and protect profitability."

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.

Thirty-three percent of New Zealand based respondents report difficulty delegating or leveraging their teams, suggesting that productivity improvements may depend as much on workflow design as on market demand.

"Many firms are balancing strong demand for legal services with increasing pressure on pricing," Shergold said. "Improving productivity is becoming the most practical way to protect margins."

Workforce stability and knowledge continuity remain critical

Investment in people continues to be central to firm strategy, with 43% of New Zealand based respondents identifying competitive salaries as a top investment compared to 58% globally. Fortunately, New Zealand based firms are not facing the same level of staff turnover due to burnout, while this remains a moderate concern for 59% of firms, actual turnover remains low.

The research also highlights risks linked to knowledge continuity. Fourty-five percent of New Zealand 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.

"Knowledge continuity is an underestimated profitability issue," Shergold said. "When expertise sits with individuals rather than systems, firms risk losing efficiency every time someone moves on."

Technology integration shaping operational efficiency

Administrative workload remains one of the clearest constraints on profitability. Significantly more legal professionals based in New Zealand report spending between two and five hours per day on administrative tasks (63%) compared to a global average of 41%, reinforcing the importance of workflow optimisation 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. Thirty-nine percent of New Zealand based respondents list automation of repetitive workflows and tasks in their top-three technology investments to increase firm profitability, indicating a possible shift toward operational efficiency as a core driver of financial performance.

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

"Reducing administrative workload is one of the fastest ways firms can improve profitability," Shergold said. 

"Automation and integrated platforms help remove repetitive work and allow lawyers to spend more time on billable activity."

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.

"New Zealand firms are entering this period from a position of strength," Shergold concludes.

"The challenge now is turning that confidence into practical productivity gains by improving workflows, strengthening knowledge management and making better use of technology."

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

ENDS

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 analysed in January 2026 to identify both global trends and market-level differences in how firms are responding to profitability pressures.

About LEAP Legal Software
LEAP Legal Software is a cloud-based legal practice management platform supporting over 71,000 legal professionals worldwide. With more than 30 years of innovation, LEAP integrates matter management, legal accounting, document automation and AI-driven tools to help law firms operate more efficiently and profitably.

Australian-owned and headquartered in Sydney, LEAP delivers practice-area-specific solutions across Property, Estates, Personal Injury, Criminal Law, Litigation and Family Law, combining deep local expertise with the experience of a global legal technology organisation.

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