A Canadian Legal Summit panelist on why agile small firms can outpace larger rivals as AI reshapes practice
Small and mid-size law firms enter 2026 with an advantage their larger competitors struggle to match: the speed to test new technology, keep what works, and drop what doesn’t without waiting on an IT department or a management committee. As clients scrutinize bills and AI absorbs routine tasks, that agility separates firms that adapt from those that fall behind.
Erin Cowling has watched the shift from a rare vantage point. A former Bay Street litigator, she left McMillan LLP in 2013 and is now the CEO and founder of Toronto-based Flex Legal Network. Cowling built her own freelance practice and grew it into a network of more than 80 lawyers, paralegals, and law clerks. She will be appearing on a panel at the Canadian Legal Summit in October on “Running a Small Firm in 2026: What's Changing – and What Actually Matters.”
Run the practice like a business
When Cowling launched her business, Canadian firms had no category for what she did. “When I called myself a freelance lawyer, everyone was like, ‘What is that?’” she says. The resistance dissolved once firms ran the economics: “the lawyers saw the benefit of having someone on an as-needed basis instead of having that overhead of having a full-time associate. They really loved the idea and embraced it fully,” she says.
The firms pulling ahead share a mindset, she says. “The ones who are doing really well think of their firms as businesses and don’t get caught up only doing the law and burying their heads in the sand about the big changes that are going on in the legal profession,” she says. She ties survival to discipline over scale: “Those who put the client experience first, those who innovate but don’t grow just for the sake of growing … I think those are the ones that are going to be really successful.” Profitability comes from specialization and lean overhead, she says.
Clients are auditing the bill
Client expectations have hardened, and AI now drives how clients interact with their law firm. Cowling says she has seen clients “put their bills into ChatGPT or Claude or some other AI and had them analyze it to see if this is an appropriate bill and really pushing back on them.” She says law firms should not discount this practice but use it as a sign to improve communication. “Law firms that do better at explaining the value that they’re bringing to the client, they won’t get as much pushback on their bills,” she says.
The AI split, and the shiny-object trap
Cowling describes her client base in extremes – “a real full embrace going all in on AI versus … ‘I’m too afraid to even touch it,’” she says. The firms that are leaning into the tech are now using machines to do work once handed to first-years: “So timelines, first drafts of statement of claims or defences.” Adoption, though, remains uneven; industry data shows many solo and small firms have been slower to adopt AI tools than their mid-size peers.
She warns against chasing every release – “shiny object syndrome,” in her words – and steers firms toward short commitments first. “I always recommend people to do the month-to-month first instead of getting locked into an annual.” Being small is the leverage: “If it’s not working out, done, cancel the subscription, move on to the next one.” In other words, small and mid-sized firms are often better positioned to adopt new technologies because of their agility.
Where freelancers fit the new math
The biggest misconception about freelance counsel, Cowling says, is the idea of seniority. “They think of us as cheap junior lawyers, and we’re not,” she says. Most carry 10 to 15 years of experience and take on litigation strategy, factums, and high-level legal research work that AI cannot do. In the US, a freelance platform like hers told her that personal injury document review work is drying up while a new pattern surfaces: “They’re seeing an uptick in law firms, mid-sized, small law firms, who are actually letting go their associates because they’re getting AI to do a lot of the work and then bringing in the freelance lawyers to review it,” she says.
She has not seen that in Canada yet, but a related pressure point is familiar. As associates do their work more efficiently, the math shifts upward: “The partner’s just becoming the bottleneck because the associates are doing things faster with AI, but the partner still has to review it, still has to have that senior judgment,” she says. That is the work she doesn’t see AI replacing: “I can never replace the judgment and the final review.”
The small firm advantage
Small firms are well-suited to turning disruption into advantage, she says. “It’s a little bit harder to steer a big boat as opposed to a little boat.” Client pressure will also force firms to be more efficient: “Your clients are not going to be willing to pay for hours and hours and hours for something that AI could do in two minutes.”
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