Recent data suggests the real differentiators are no longer adoption, but how deeply AI is embedded into legal workflows and how deliberately firms put it to work
According to Clio’s Legal Trends Report for Canadian Law Firms, 95 percent of Canadian legal professionals are using AI in their practice. Adoption is no longer the differentiator. The more important question is how firms are using AI, where it sits in their workflows, and whether it is producing measurable value.
Across Canada, Clio’s research identifies workflow integration as the leading barrier to realizing the full impact of new technology. Luke Slan, GM, Canada at Clio, says that challenge often starts with a lack of clarity around what the tool is actually meant to do.
Firms need to define the workflow AI is meant to support, who remains responsible for reviewing the output, and how they will measure whether it is delivering the intended result. That means moving beyond broad goals such as ‘use AI for drafting’ and ‘identifying specific applications’, whether that is preparing a first draft of a demand letter, supporting intake triage, or reviewing a defined category of documents.
However, the choice of AI tool plays a role in outcomes as well, Slan notes.
“The AI tool should sit inside the systems lawyers already use , including their practice management platform, their document workflows, and existing matter data, rather than requiring them to move information back and forth between disconnected tools. When AI works within those systems, it has access to more of the context that shapes the legal work.”
Adoption is near-universal; the returns are not
Clio’s research found that 66 percent of Canadian legal professionals say AI has improved their firm’s revenue. Among firms with 20 or more employees, that figure rises to 71 percent. Among smaller firms, it falls to 47 percent.
The difference is not that AI is inherently more useful to larger firms, but that larger organizations are more likely to have the structure to define where AI fits, apply it consistently, measure its impact, and extend successful use cases across teams and matters. Smaller firms, by contrast, are more likely to adopt AI on an ad hoc basis, with individual lawyers finding their own ways to incorporate it into their work.
“To close that gap, small firms need to stop treating AI as a personal productivity hack and start treating it as firm infrastructure,” says Slan. “That means dedicating time to specific workflows, measuring what changes, and being deliberate about what the firm does with the capacity AI creates.”
The risk law firms need to evaluate
Hallucinations remain one of the most visible risks associated with AI in legal practice, particularly when generated authorities are not verified against reliable sources. Legal-specific AI can reduce that risk by grounding responses in authoritative legal materials and making the underlying sources available for review.
Data handling is just as important. Firms need to understand where client information goes, whether it is retained, and how it may be used by the underlying model.
“General-purpose tools are typically built to improve their own models over time. They don’t carry the same data-handling guarantees a legal-specific platform does, and in many cases a lawyer has no real visibility into where that data goes, how long it’s retained, or who else’s queries it might influence. Clio’s legal AI simply does not train on or retain any client data.”
The retention argument firms are underestimating
Clio’s data also produced a surprising finding around employee retention: 74 percent of Canadian legal professionals say AI has made them more likely to stay at their current firm. For most firm leaders, technology investment is framed as an efficiency question. This finding reframes it as a talent one, highlighting the fact that for many legal professionals, the drudgery of the job isn’t how they want to spend their time.
If your best associates are spending their evenings on work AI could do in minutes, that’s both a productivity issue and a retention risk, Slan says .
“The firms that get this right are building ‘does this let our people do more of the work they trained for’ into how they evaluate tools, not just ‘does this save money.’”
Where to start
For a firm that hasn’t ventured into legal-specific AI yet, Slan has two recommendations .
First, firms should look for tools designed around legal workflows, auditability, and data protection. They also need AI backed by legal data to reduce hallucinations.
Second, firms should carefully evaluate AI vendors. Considerations should include which providers can showcase transparent data ownership, and strong cybersecurity credentials as well as clear governance capabilities.
“A general-purpose AI tool that doesn't know your matters, your clients, your Canadian jurisdictional context, or your firm’s own data starts from zero on every prompt,” says Slan . “Clio is built on top of your actual practice data and real legal authority. That’s the kind of AI that lawyers can confidently embed into workflows and scale across firms.”
For more information on how Clio can transform your firm, reach out today.
