Inside PwC’s 2025 Law Firm Survey: How Technology and Client Pressure Are Reshaping UK Legal Practice

UK law firms are investing heavily in AI and technology while grappling with pricing pressures and efficiency demands, according to PwC's 2025 survey. Over half of Top 50 firms now report productivity gains from AI tools, with firms predicting technology could save 16% of chargeable hours. However, client expectations for cost reductions threaten traditional billing models, forcing firms to rethink pricing strategies and accelerate digital transformation.

AI Adoption Accelerates Across Top Firms

Over half of Top 50 law firms are now realizing productivity or financial benefits from AI tools, with 50% of Top 10 firms, 56% of Top 11–25 firms, and 56% of Top 26–50 firms reporting either productivity gains or monetized benefits from AI adoption. In contrast, no firm in the Top 51–100 segment has yet monetized AI benefits, though 19% report productivity improvements.

Firms now predict AI could save an average of 16% of chargeable hours across the Top 100, up from 11% last year. This growing confidence comes as firms move beyond training programs into full implementation. Some larger firms are even beginning to commercialize their AI applications.

Technology Investment Becomes Strategic Priority

"Improving the use of technology" has emerged as the top priority for Top 100 firms' business support functions for the first time. This marks a significant shift from previous years when working capital management dominated strategic focus.

Top 10 firms now spend an average of £7.75 million annually on cyber security, a 5% increase from 2024. Top 11–25 firms increased cyber spending by 20% to £1.85 million. This investment reflects heightened concerns, with 92% of Top 100 firms identifying cyber attacks as the foremost threat to achieving strategic objectives.

Cyber Security Investment by Firm Size (2025)

Client Pressure Threatens Pricing Models

Half of Top 11–25 firms now worry that clients will adopt comparable technologies themselves, potentially reclaiming work previously outsourced. This concern is driving a fundamental reassessment of pricing strategies.

Mark Anderson, Global Legal and Professional Services Sector Leader at PwC, noted: "Those firms who best execute growth strategies, adopt innovative pricing, invest in partner development and accelerate technology adoption will be best positioned to deliver sustainable performance."

Expected Impact of AI on Law Firm Revenue

Growing client expectations for efficiency gains are fueling downward fee pressure, making adoption of new pricing models such as fixed fees and partner training on negotiation essential to safeguarding profitability.

Transformation Projects Surge

Nearly half (48%) of Top 100 firms expect to engage in finance support function transformation projects within the next one to two years, with 39% planning IT transformations and 38% targeting marketing and business development. Among Top 50 firms, 88% are planning transformation projects in at least one support function.

The Path Forward

The legal sector stands at a critical inflection point where technology investment and operational discipline will separate successful firms from struggling ones. While larger firms demonstrate clear advantages in monetizing AI and maintaining robust cyber defenses, mid-tier and smaller firms face urgent pressure to accelerate adoption or risk competitive disadvantage.

Lucy Robson, Tax Leader for PwC's Law Firm Advisory Group, emphasized: "UK law firms should refine pricing strategies and upskill fee earners at all grades, embrace AI and technology to drive efficiency, and focus on talent development and retention."

The firms that successfully balance technology investment with innovative pricing models while maintaining partner buy-in for structural changes will emerge as market leaders. Those that delay risk losing both efficiency gains and client confidence in an increasingly technology-driven legal marketplace.

This article is based on insights and data from PwC’s Law Firm Survey 2025: Resilience and Recalibration – Navigating the Legal Sector’s Inflection Point, the 34th annual analysis of the UK legal sector conducted by PwC’s Law Firm Advisory Group.