The state of legal tech

Most lawyers say they’re satisfied with their tech. But behind the numbers lies a very different story. New research from over 2,000 Australian and UK lawyers reveals the hidden costs of complacency, and what it takes to future-proof your law firm.

Landmark data commissioned by Clio, has uncovered a disturbing pattern of data lock-in affecting Australian law firms. According to The State of Legal Tech 2026 report, a significant number of lawyers surveyed confirmed they were charged excessive fees, facing long delays, and struggling to access their own documents when attempting to switch providers or negotiate better contracts.

On the surface, satisfaction seems high—91 per cent of Australian lawyers surveyed report they’re content with their systems. Yet, beneath that satisfaction lies inefficiency: 60 per cent of lawyers surveyed lose more than 44 working days each year to outdated technology. While four in five believe legal software supports firm growth, the outcomes are uneven:

• One in eight lawyers surveyed report little or no improvement.
• Up to 8 per cent of lawyers surveyed say their tools have actually hindered growth.

So, why the disconnect? Familiarity plays a major role. Many firms tolerate inefficiency to avoid the perceived risks of change. But the cost is real. 44 days of lost productivity per lawyer translates to missed billables, delayed outcomes and reduced client satisfaction.

The difference really shows up clearly when comparing platforms. In Australia, 89 per cent of Clio users report a positive impact on growth, compared to 74 per cent of non-Clio users.

The report also uncovers vendor relationships as another pressure point. Only 52 per cent of lawyers surveyed are completely confident they own their client data and case documents stored within their legal tech systems. The remaining 48 per cent express uncertainty, with 44 per cent admitting they would need to investigate their contracts to be sure. This lack of clarity often becomes problematic when firms attempt to change providers, where vendor lock-in tactics are widespread.

Financially, the impact is substantial. With approximately 23,700 legal services businesses operating in Australia as of early 2025, if just 10 per cent of firms face average data extraction fees of $24,861 annually, the industry could be incurring nearly $59 million each year. When factoring in productivity losses caused by prolonged delays, the total cost to the sector likely reaches well into the hundreds of millions annually.

Clio continues to lead the call for ethical data practices across the legal tech sector. Its platform guarantees:

• Complete data ownership guarantees for all client information
• Free, unlimited data exports at any time
• No exit fees or penalties for switching providers
• API access allowing real-time data integration and backup
• 30-day data retention after account closure at no additional cost

Clio is urging the global legal technology sector to adopt clear, ethical data standards, including mandatory data portability, capped and transparent extraction fees, standardised export formats, and explicit data ownership rights.

The report also exposes an emerging gap in AI governance. Only 37 per cent of lawyers surveyed have formal AI policies in place, while 65 per cent of lawyers surveyed voice concerns about rising cybersecurity threats. Yet, only 41 per cent believe their firm’s cyber protections are strong. As AI tools become more accessible, a lack of oversight has led to shadow AI,  where employees use unapproved tools to boost efficiency, often unknowingly creating risks related to client confidentiality and data privacy.

In an era where AI, cybersecurity, and client expectations are rapidly evolving, managing the business of law is no longer optional. Firms that lead with strong governance, transparent data practices, and modern technology strategies will be best positioned to protect clients and compete in the next chapter of the profession.

To explore the full research findings and recommendations, download the full report, click here.

—–

Methodology

The State of Legal Tech 2025 Data Insights was conducted by YouGov and surveyed 1,005 practising lawyers across Australia and the online survey was conducted in July 2025. The margin of error is ±3.1 per cent at the 95 per cent confidence level. Full survey methodology and additional findings are available upon request.

About Clio

Purpose-built for the legal industry, Clio’s Intelligent Legal Work Platform streamlines workflows, improves decision-making, and combines powerful technology with industry-leading security. Trusted by hundreds of thousands of legal professionals in more than 130 countries, and approved by over 100 bar associations and law societies worldwide, Clio sets the standard for innovation and client success across the legal profession. Backed by world-class investors and a mission to transform the legal experience for all, Clio is defining the future of legal work through AI. Learn more at www.clio.com/au.