Legal professionals increasingly adopt AI

24 Jul 2025Announcements

A new survey reveals that AI usage in legal firms has soared dramatically, boosting risk management strategies

A Legal Industry 2025 Risk Index undertaken by Embroker, a digital-first insurance company, highlights a remarkable surge in the use of artificial intelligence (AI) among legal professionals, which skyrocketed from just 22% in 2024 to a substantial 80% in 2025. This shift illustrates not only the growing comfort with AI tools but also a strategic move towards enhancing professional services and automating client support.

The findings indicate a rising confidence within law firms, as nearly half (45%) of respondents plan to expand their insurance coverage—a drastic jump from only 14% in the previous year. Furthermore, 77% of legal professionals believe that their current insurance policies adequately cover their most significant business risks. The growing concern around cybersecurity has led more attorneys to secure dedicated cyber insurance, which has become increasingly recognised as essential.

Despite the benefits of AI, concerns about its potential pitfalls persist. Legal professionals express apprehensions regarding risks tied to over-reliance on AI, with 43% citing potential professional liability risks, 38% voicing worries about data privacy breaches, and 37% flagging legal and ethical issues stemming from misuse. With the integration of AI comes the daunting challenge of managing increased liability risks, particularly malpractice suits related to the improper use of AI tools. Andy Lea, Chief Insurance Officer at Embroker, remarked that "Legal professionals are rapidly integrating AI into their workflows, but this surge in adoption introduces novel professional liability risks that firms must proactively manage."

The research also highlights a significant evolution in the internal and external challenges faced by law firms. The primary internal issues have shifted from the "rising cost of business" to concerns about reputational risks and employment-related claims. Externally, adapting to disruptive technologies, such as AI tools, has emerged as the number one risk, exceeding concerns about professional liability claims and cybersecurity threats.

As firms embrace a more strategic approach to risk management, 2025 has seen a notable increase in those viewing their risk as an opportunity for growth, climbing from 18% to 37%. Despite a slight decrease in overall business optimism, the top priorities for the legal sector now revolve around enhancing infrastructure, technological advancement, and growth in sales and revenue.

The Legal Industry Risk Index of 2025 outlines a period of change characterised by proactive innovation, strengthened insurance protections, and a bold approach to risk management. This transformation underlines the legal industry's determination to navigate the complexities of modern challenges while ensuring resilience and sustained growth, all amidst rapid technological advancements. For those interested, the full report is available for download on Embroker's website.

Legal News desk contact: editorial@solicitorsjournal.com

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