AI in legal tech in 2026: what has actually changed

Watch: Heath Harris on applied AI and what firms should do next (ILTACON 2026)

When we first wrote about AI in legal tech in 2024, the conversation was about promise: faster document review, smarter research, automated contracts. Two years on, the question has changed. Law firms are no longer asking what AI could do. They are asking what is actually working, what it runs on, and who they should buy it from.

At ILTACON 2026, People in Legal interviewed legal tech CEOs, law firm operators and knowledge leaders. Here is what has changed, in their words and ours.

1. From experiments to decisions

The pilot phase is ending. Firms that ran a handful of AI trials are now deciding what to keep, what to scale and what to switch off. Adam Cain, COO of Hooper Law Office, put the question bluntly: are firms using AI because they need it, or because they feel they should? The firms getting value are the ones starting from a business problem, not a product.

2. Data and knowledge come first

The most consistent message from the floor was that AI is only as good as the data under it. Sam Toulson of BigHand argued that you can't automate chaos: firms already hold rich data on pricing, resourcing and profitability, but it has to be usable at the moment a decision is made. Brandall Nelson of NetDocuments and Sara Elevons of Manatt, Phelps & Phillips made the same point about knowledge: getting the foundations right is what makes a firm AI-ready.

3. Research and knowledge search

Legal research has moved beyond keyword search. Generative tools now answer questions in plain language, with citations, across both public law and a firm's own precedents and know-how. The early AI research pioneers have largely been overtaken by the major publishers and well-funded platforms, and the differentiator is increasingly how well a tool searches the firm's own knowledge, not just the law.

Watch: Alex Smith on AI, knowledge and smarter legal search (ILTACON 2026)

4. Disputes and document-heavy work

Document review is still where AI earns its keep fastest, but the focus has shifted from finding documents to understanding a matter. Charlie Harrel of Opus 2 talked about matter intelligence: capturing what a disputes team knows before it walks out the door. Joe Rayment of Cicero described tools that find the facts a case will turn on, so lawyers spend more time on strategy.

5. Build, buy, or both

Helen Fan, Chief AI Officer at MagStone Law, said most firms will do both. The real question is which capabilities a firm should own because they differentiate it, and where it makes sense to rely on vendors. That is a strategy decision, not an IT one.

6. Consolidation, and room for specialists

The vendor market is consolidating fast. Contract AI pioneer Kira Systems was acquired by Litera back in 2021, and 2026 has brought a new wave of deals, including Legora's agreement to acquire Wexler. Joe Rayment sees that as validation for specialist tools: the large platforms acknowledging they can't do everything. He also expects the biggest AI companies to become a bigger part of firm strategies as the first three and four year legal AI contracts come up for renewal.

7. Mid-sized firms and the business of law

Mid-sized firms don't have BigLaw's technology teams, but they face the same pressure. Actionstep's CEO argued that with hundreds of new tools appearing, the answer isn't necessarily more software; it's strong core systems across billing, workflow and practice management. And as AI changes how long work takes, the billable hour itself is under question, a theme Mathew Kerbis explored on alternative fees and pricing.

What firm leaders should do next

• Start with the business problem, then pick the tool.

• Fix your data and knowledge foundations before scaling AI.

• Decide what you will own and what you will buy.

• Use contract renewals to test whether each tool is still earning its place.

• Revisit pricing as AI changes the time work takes.

Read our ILTACON 2026 roundup for every interview, or watch the full conversations on the People in Legal episodes page.

First published July 2024. Updated October 2026.