Elite and Law.com have published research on law firms' returns from AI and technology investment. The survey found that firms reporting the strongest results were more likely to have access to connected, real-time financial data.
The study drew on responses from 133 senior decision-makers at law firms in the United States and the United Kingdom, including partners and C-suite executives, mainly at large and mid-sized firms. It pointed to a widening gap between firms investing in technology and those turning that spending into measurable operational and financial gains.
Only a small share of firms said they consistently see clear returns in areas such as operational speed, financial visibility, and revenue performance. Within that group, the research found a strong link to the availability of real-time financial data across systems.
Just 8% of firms said they lose less than one unbilled hour per lawyer each week. Nearly 90% of that group said they have access to real-time financial data.
These firms were also more likely to say they could answer profitability questions quickly, track client and matter performance as work progressed, and run more efficient work-to-cash processes. The findings suggest firms with more connected systems are better placed to turn technology spending into business outcomes.
Lost time
For much of the market, the picture was less positive. Some 67% of respondents said their firms lose between one and three billable hours per attorney each week, while 25% put the figure at four hours or more.
The report estimated that for a 500-lawyer firm, those losses could total as many as 67,200 billable hours a year, representing more than USD $30 million in potential billable value at standard large-firm rates. For firms with 1,000 lawyers or more, annual exposure could exceed 134,000 hours.
Visibility into where those losses occur also appeared limited. Only 38% of firms said they have full visibility into revenue leakage across partners, practice groups, matters, or clients.
The findings suggest many firms are adding AI tools before fixing older operational problems in finance and data management. Nearly half of respondents, 47%, said the biggest barrier to getting more from AI was a lack of integration between systems.
The same proportion said finance teams spend more than a quarter of their time gathering, reconciling, and reporting disconnected data. That points to a heavy manual workload inside firms that are also trying to modernise their operations.
Operational friction
When asked where invisible friction has the greatest effect on financial operations, 56% cited data extraction and reconciliation across systems. Forecasting and budgeting was named by 55%, while 54% pointed to understanding true profitability.
Only 39% of firms said they clearly understand their true cost of delivering legal services. Most respondents said their firms still rely on partial estimates or broad firm-wide averages rather than real-time operational information.
That matters because investment in AI across the legal sector has risen sharply, while firms continue to face pressure on margins, client demands, and billing efficiency. The survey suggests the value of AI in law firms may depend less on the tools themselves than on whether firms have reliable financial data that can be used across departments.
Mark Dorman commented on the findings. "Law firms are investing heavily in AI and modernization, but this research highlights a growing gap between firms experimenting with AI and those creating measurable business value from it," said Mark Dorman, Chief Executive Officer, Elite.
"AI is only as effective as the quality, accuracy, and timeliness of the data informing it. The firms pulling ahead are reducing fragmentation across their systems, connecting real-time financial data across the business, and building the foundation needed to turn AI into real value," Dorman added.
The results also reflect a broader issue for professional services firms, where disconnected finance, billing, and matter management systems can make it difficult for leaders to measure profitability at a granular level. In law firms, where time recording and invoicing remain central to revenue, even small gaps in visibility can have a large effect on earnings.
For firms trying to improve performance, the research indicates that cleaning up data flows and linking financial systems may be a more immediate priority than adding further AI applications. Only 38% of firms said they can fully see where revenue leakage is occurring across the business.