AI use rises at European law firms and raises pricing questions

In short: European law firms are using AI more widely, and it is forcing tough decisions about pricing, staffing, and competition.

What's going on

Research for the Financial Times Innovative Lawyers Europe 2026 report found a growing number of commercial law firms are rolling out AI quickly. In this context, AI means software that can read, write, and summarise text, a bit like a fast assistant for documents.

The biggest international firms and the legal teams inside big accountancy firms, like PwC, were early movers because they could afford to invest sooner. The report also points to smaller firms, including Noerr, Ecija and Three Crowns, as leaders in adopting AI.

Many firms now track AI’s impact using simple measures like how often it is used and how many hours it saves. PwC Tax & Legal in Spain says it saved more than 19,000 hours in six months across nearly 900 professionals. Dechert said its average AI use in 2026 so far is double what it was in 2025.

This is increasing pressure on the billable hour, where clients pay for time spent. Some clients argue that if AI helps lawyers do work faster, they should not be billed as if the work still takes the old number of hours. Law firms say it is hard to change pricing quickly because their own costs and ways of working have not shifted enough yet.

What to watch

Competition may increase from “AI-native” legal businesses, which are built around AI from the start, rather than adding it later. One example cited is Carta Law, which aims to handle investment fund paperwork end to end, and gained a larger customer base after Carta bought UK legal business Avantia. A key question is whether traditional law firms change pricing and training fast enough to keep up.

Source: Financial Times