Generative AI is making a transformative impact on the Canadian legal industry. According to a 2025 study by Thomson Reuters, the use of GenAI in law more than doubled by 2024, and adoption is expected to grow at a double-digit rate again this year. Canadian law firms are increasingly integrating AI into their research and litigation workflows to boost efficiency and stay competitive. Nearly half of the surveyed lawyers indicated they plan to incorporate AI tools within the next year. However, despite this enthusiasm, a major challenge persists: around 59% of firms do not measure the return on investment (ROI) from these tools, and 21% are unsure whether their current measurements are accurate. This points to a gap in strategic implementation—firms are adopting AI, but without clearly defined metrics to assess its value. Traditionally, legal ROI has been measured through metrics like profit per equity partner (PEP), but these outdated methods don’t fully capture the impact of new legal technologies. Firms are now shifting to alternative indicators such as user adoption, time saved, and workflow enhancements. For instance, generative AI allows attorneys to create litigation timelines more swiftly and accurately. However, increased speed can reduce billable hours unless firms revise their pricing models. A transition to fixed-fee pricing models could unlock the true potential of AI, shifting the legal service model from hourly billing to value-based outcomes. Steve Assie of Thomson Reuters has highlighted that the most impactful AI implementations occur when paired with broader business model changes, including advisory-based services and transparent pricing structures. Law firms differ widely in how they implement AI based on their size and operations. Larger firms engaged in complex litigation often deploy AI to enhance precision and client personalization. Meanwhile, mid-sized firms benefit from GenAI’s efficiency gains, particularly when leveraging fixed-fee billing models. However, even as usage expands, many firms still struggle with measuring effectiveness. Some conduct internal feedback surveys or use A/B testing to evaluate AI’s impact against traditional methods. Unfortunately, these approaches require time and resources, which smaller firms often lack. A significant barrier to widespread AI adoption remains client trust, particularly concerning data privacy. Legal work involves highly sensitive information, and many corporations are cautious about involving AI tools—especially those hosted outside of Canada. Several GenAI platforms are U.S.-based, raising questions about compliance with Canadian privacy laws. To build and retain client confidence, Canadian firms must practice transparency in how they manage, store, and process data. Ensuring compliance with Canadian data protection regulations is essential for promoting trust in legal AI solutions. Perhaps the most disruptive effect of GenAI lies in its challenge to the traditional billable hour. With AI significantly reducing the time required for routine legal tasks, hourly billing models may no longer reflect the actual value provided. Steve Assie suggests that in the AI-driven future, time spent could even be seen as a measure of inefficiency. While billable hours still dominate in Canada, the shift toward fixed-fee pricing for routine work may become inevitable, allowing firms to better align cost with value. In this evolving landscape, Canadian law firms are seeking secure, AI-driven solutions tailored to their unique needs. That’s where tools like Case Polaris come in. Developed by Ontario-based startup Data Function Inc., Case Polaris empowers firms with advanced AI capabilities for legal research and case management—all while maintaining strict compliance with Canadian privacy standards. With features like document upload & analysis, case summarization, an extensive legal library, and interactive AI chat, it delivers efficiency and accuracy in a secure environment. Designed especially for solo practitioners and mid-sized law firms, Case Polaris offers affordable pricing, contextual filtering, and Canadian data sovereignty — helping legal professionals fully embrace the future of AI with confidence.
Source: Law Times