94 Percent of Law Firms Are Sleepwalking into Irrelevance

By LawFuel Legal Tech & Marketing Contributor

McKinsey’s latest global AI survey (November 2025, ~2,000 executives) is out, and the numbers are both comforting and terrifying for law firm leaders: 88 percent of organizations now use AI in at least one function (up from 78 percent last year). Generative AI is table stakes. AI agents are being tested by 62 percent.

The uncomfortable truth? Two-thirds still haven’t scaled a single use case. Only about one-third have moved anything past the pilot graveyard. Measurable bottom-line impact remains rare – just 39% report any EBIT lift, and for most it’s under 5 percent.

In short: Everyone is experimenting, but allmost nobody is transforming. And that can be a sign of future margins evaporating.

The 6 percent Who Are Actually Making Money (And Why the Other 94 percent Are Toast)

McKinsey’s “high performers” – a smug little 6 percent clique – share three habits the rest of us apparently hate:

They redesign workflows from the ground up, not just sprinkle AI on 40-year-old processes and expect magic to happen. The integration is effective as as result of that ownership and implementation.
Senior leadership owns it personally – no outsourcing vision to junior associates or quarterly “innovation theater.”
They treat AI as a growth engine, not a marginally better timesheet filler.

These firms are three times more likely to target transformative outcomes and allocate north of 20 percent of their digital budgets to AI. They hire data engineers the way the rest of us hire laterals. Most importantly, they remove people, partners included, who refuse to adapt.

The Unspoken Subtext McKinsey Is Too Polite to Print

Read between the lines of the report and one conclusion screams at the legal industry: this is no longer a technology adoption problem but a leadership crisis.

Firms that keep AI in the “nice-to-have” column, delegate it to a committee, or protect the billable-hour priesthood at all costs are not “moving deliberately.” They’re committing slow-motion suicide.

The next generation of lawyers didn’t grow up with Westlaw print volumes – they grew up with ChatGPT. They will not stay at firms that force them to work like it’s 1998. Clients will not keep paying premium rates for work a properly redesigned AI workflow can do in hours instead of weeks.

There is no gentle middle path here. You either forget the legacy processes and standardize data as welll as retraining (or replacing) those who resist the changes. And build new, fixed-fee, AI powered offerings.

…or you watch the 6 percent (and a handful of hungry boutiques using the exact same off-the-shelf tools) eat your most profitable work.

For Law Firm Marketers: This Report Is Pure Dynamite

Hand this to your managing partner with one Post-it note: “McKinsey says only 6 percent redesign workflows and win. The other 94 percent become footnotes. Which column do we want to be in?”

Mid-size and regional firms take note: the technology barrier has collapsed. The only thing stopping you from out-innovating BigLaw is the willingness to treat AI as core infrastructure instead of a paralegal replacement.

The bottom line for 2025–2026 for law firms is that the AI itself isn’t going to kill your law firm, but complacent leadership may.