A new report from the Thomson Reuters Institute suggests the legal industry’s biggest artificial intelligence challenge isn’t adoption—it’s alignment.
While both law firms and their clients are increasingly embracing AI, a growing disconnect is emerging around how the technology is being used, communicated, and ultimately valued. The report, titled The Great AI Disconnect, finds that although a majority of corporate legal departments want their outside counsel using AI to drive efficiency, few are explicitly requiring it or engaging in structured conversations about its role in service delivery.
At the same time, many law firms are investing in and deploying AI tools internally, but are not proactively communicating how those tools are being used to benefit clients. The result is a gap in visibility that risks undermining both trust and differentiation in an increasingly competitive market.
This misalignment is compounded by a lack of clear metrics. According to the report, only a small percentage of organizations are actively tracking the return on investment from AI initiatives, while a significant portion are unsure whether ROI is being measured at all. Without a shared understanding of value—whether in the form of reduced costs, faster turnaround times, or improved outcomes—both firms and clients are left operating on assumptions.
The findings point to a broader transition underway in the legal industry, as AI shifts from experimentation to integration. Early adoption has largely focused on discrete use cases such as legal research and drafting, but the next phase will require deeper alignment between firms and clients around expectations, pricing models, and performance.
For law firms, this means moving beyond simply implementing AI tools to clearly articulating how those tools enhance client service. For clients, it may require more direct engagement with outside counsel on how AI is being deployed and how its benefits should be reflected in billing and outcomes.
The report underscores that the competitive advantage in legal AI will not be determined solely by who adopts the technology first, but by who is able to integrate it transparently and align its use with client expectations. In a market where efficiency is increasingly assumed, communication may prove to be the differentiator.