TL;DR
Most UK law firms in Crowe’s latest sector benchmark have set money aside for AI: 79% say they have committed specific funds, Consultancy.uk reported on 4 November. The spending comes as salaries become the main pressure on profit. We could not locate Crowe’s report itself, so these figures come through Consultancy.uk, and the benchmark measures budgets rather than results.
Crowe’s numbers show a profession doing well at the top and less well below it. Partner profit at City firms grew 12.12%, it says, against a 10.82% fall at regional ones. Profit pools outside the City rose 6%, half the 12% seen in the City, but adding partners has diluted the gain per partner.
Three-quarters of firms say pay and related employment costs are their biggest challenge, and 88% are now looking at pay rises of 5% or less. That is the context for the AI money. Consultancy.uk reads it as an alternative use of funds that might produce savings later, though it is openly sceptical, noting how few concrete examples of return it has seen.
Private equity has not filled the gap
Crowe also tested the other much-discussed source of capital. Some 46% of respondents say private equity has had “little or no effect on their business to date”. Crowe’s Nicky Owen says growth alone no longer separates the leaders, and that the firms pulling ahead are “turning growth into profit, cash and sustainable partner returns”. Colleague Ben Carter describes a profession “increasingly focused on long-term sustainable success”.
Crowe has its own professional practices team, so its reading of the sector is not neutral, although the figures are useful as a snapshot.
Budget first, rules alongside
In our view, the figure that matters next is not how many firms have a budget but what they buy with it and who checks the output. Spending is rising while the conduct questions remain live. The Civil Justice Council has issued its final report on AI in civil court documents, and a CPS prosecutor’s nonexistent citation has also come to light.
For regional practices the question is sharper. If the City’s profit lead reflects technology adoption, as Crowe suggests in part, then firms under the most margin pressure also have the least room to experiment. That would widen the gap the benchmark describes, though one year’s survey cannot show it. A useful test for next year’s edition is whether Crowe can report returns as well as commitments.