Canadian law firms report strongest AI time savings

LEAP Legal Software has published research showing Canadian law firms report stronger time savings from AI than peers in other surveyed markets. The findings identify Canada as the strongest market in the study for perceived AI benefit.

Three-quarters of Canadian legal professionals said AI saves them a moderate to significant amount of time, while 23% reported significant time savings. The report, based on a survey of 700 legal professionals across six countries, also found that 43% of Canadian respondents said legal-specific AI tools had the greatest impact on their firm's profitability and efficiency, the highest share among the markets surveyed.

The data also paints a less favourable picture of day-to-day operations inside many firms. Forty-two per cent of Canadian respondents said they lose more than two billable hours a day to administrative work, while 71% use three or more platforms each day.

That split between AI enthusiasm and operational friction runs through the findings. More than a third of Canadian respondents, 37%, said too many disconnected systems were a barrier to efficiency, and 40% said moving to a single integrated platform would be the best technology investment their firm could make.

Profitability pressure

The report suggests Canadian law firms are trying to improve margins as pricing and workflow constraints become harder to ignore. Sixty-eight per cent of respondents said their firm's profitability had improved over the past year, and 45% saw high potential for further gains.

At the same time, 70% said profitability is a high or top priority in business decision-making. That focus appears to reflect rising expectations for efficiency and limits on firms' ability to grow revenue through higher fees alone.

Among the biggest barriers to revenue growth, 43% cited pricing pressure from clients. Half said a lack of AI tools to identify opportunities or automate outreach was holding back revenue, while 42% pointed to limited customer relationship management or client management systems.

Administrative work remained a clear internal drag on performance. The study found that 32% of Canadian legal professionals spend between two and five hours each day on administrative tasks, and a further 10% spend more than five hours.

Adoption gap

The research points to a widening divide between firms that have started using AI in routine work and those still deciding whether to deploy it more broadly. In Canada, respondents indicated that AI is moving beyond pilot use into work such as document review, drafting and legal research.

"Canada's legal sector is entering a productivity phase," said Malcolm Muthulingum, Chief Executive Officer, LEAP Legal Software Canada.

"Firms are ready for change, and they're confident about their potential for growth, but in order to scale efficiently they must evaluate and optimize their technology stacks," he said.

The findings also suggest the technology base in many firms may not yet support that shift smoothly. Only 17% of Canadian respondents said their firm's technology stack was a major advantage for profitability, although that was still the highest figure among the countries covered in the study.

That points to stronger confidence than among global peers, but it also shows that most firms do not yet see their existing systems as a major commercial advantage.

People and process

Beyond technology, the survey found persistent concerns about staff pressure and knowledge retention. Around half of Canadian respondents said their firms faced challenges linked to turnover, burnout and the loss of institutional knowledge.

Specifically, 48% cited staff turnover as an issue, 52% pointed to burnout, and 50% said their firms struggle with knowledge retention. The report also found that 40% of Canadian firms have limited or no documented processes in place when staff leave.

That matters because undocumented workflows can make it harder for firms to maintain consistency, train replacements and preserve know-how when experienced staff move on. In a business where billable time and specialist expertise are closely tied to earnings, weak internal process control can affect both service delivery and financial results.

Muthulingum said firms that have already adopted AI are seeing benefits, while slower movers risk losing ground.

"Canadian legal professionals are already seeing the benefits that come from adopting AI and pairing it with their legal expertise," he said.

"What's critical now is for firms that have not yet considered implementing AI in their practices to seriously evaluate their options, as failing to incorporate this technology better positions their competitors to protect margins, manage workload and deliver consistent service."