The Top 7 Legal Trends to Look for in 2025

1. The Rise of Small Language Models (SLMs) in LegalTech 

Matt Miller, VP of Strategic Solutions at Litera, emphasizes the growing impact of Small Language Models (SLMs) in the legal sector. SLMs, such as Microsoft’s Phi-3-mini series, are designed for efficiency, operating on devices with limited computational power while maintaining performance comparable to larger models like GPT-3.5. 

In the legal tech space, SLMs offer privacy advantages, reduced latency, and cost-effective customization, making them ideal for tasks like contract analysis and document drafting. While SLMs won’t fully replace Large Language Models (LLMs), they excel in niche roles requiring specialized legal knowledge, offering law firms the ability to train these models on industry-specific content. 

Miller also foresees a significant rise in retrieval-augmented generation (RAG), which combines LLMs, SLMs, and external knowledge bases for enhanced functionality. For example, Microsoft 365 Copilot employs a RAG-like approach, using Microsoft Graph connectors to pull contextually relevant data from enterprise sources like SharePoint and OneDrive. This integration ensures generative AI tools are grounded in precise and relevant information, a trend poised to revolutionize document management and streamline legal research. 

“There is a huge wave in AI development, and 2025 will bring an influx of AI agents and AI-driven workflows,” Miller notes. “Microsoft’s expected release of Copilot plug-in capabilities for Word will be a game-changer.” 

As AI tools become more embedded in legal workflows, data management emerges as a critical priority. Robust data strategies are essential to ensure these tools are trained on high-quality, bias-free data. Poorly managed data risks inaccuracies and biases in AI outputs, underscoring the importance of proper oversight. Some forward-thinking firms are already addressing these challenges by creating roles like "AI Data Strategist" to safeguard data quality and maximize AI performFance. Firms are also creating data lakes to lay the groundwork for centralized repositories that enable seamless data storage, integration, and analysis. These data lakes support robust data strategies by breaking down silos, allowing for improved data accessibility and quality control—key factors in ensuring AI models receive clean and unbiased inputs. Data lakes can enhance the role of an "AI Data Strategist," providing them with the infrastructure to design and implement sophisticated data pipelines. This combination of technology and specialized roles positions firms to mitigate risks like data bias or inaccuracies more effectively. 

2. GenAI Capabilities to Drive Investment and Skill Development 

Miller foresees that document generation and contract review will be the most sought-after capabilities in the GenAI space. These tools will attract significant investment from law firms over the next year. As a result, legal professionals will need to enhance their prompt engineering skills to interact effectively with GenAI legal systems. 

“All law firms will establish AI teams to guide them through this transition and train employees on the ethical and efficient use of GenAI,” Miller adds. 

Glenn Laforce, Chief Knowledge and Innovation Officer at Holland & Knight, agrees. “I believe in the more modern world, firms will absolutely have to adapt their hiring practices to enable for better technology. As a technology rapidly advances, new associates are going to have to be trained not only in things like AI, but also in more business development skills in order to foster a new generation of partner.” 

3. Breaking Down Data Silos with Enhanced Integration 

Barry Solomon, VP of Client Value and Innovation at Litera, highlights the ongoing focus on data integration within law firms. As firms strive to break down data silos, they must leverage technology to transform insights into value-added resources for clients. 

 “GenAI continues to be a key focus, but the real challenge lies in identifying the right use cases and deploying the technology safely,” says Solomon. “Workforce training will be essential, as the profession increasingly requires data experts capable of processing large datasets.” 

Solomon also emphasizes the importance of a “human-in-the-loop" approach to support informed decision-making, particularly in client-facing scenarios. 

4. Navigating the Hybrid Work Era with Innovative Training 

The legal education landscape has undergone significant transformations over the past few years, with the COVID-19 pandemic acting as a catalyst for change. As we settle into a post-COVID world, there is a notable return to in-person activities, including continuing legal education (CLE) courses. This shift back to some pre-pandemic norms brings a new set of challenges and opportunities for training the next generation of lawyers. Younger associates often miss out on traditional in-person mentoring opportunities. 

As the legal landscape continues to evolve, the focus must remain on flexibility, innovation, and adaptability. By doing so, we can ensure that legal professionals are not only equipped to thrive in the current environment but are also prepared for whatever the future may hold. 

Solomon adds, “Leaders and managers must adopt innovative strategies that integrate technology with interpersonal skills to equip younger lawyers with best practices and prepare them for future challenges.” 

5. Vendor Consolidation and the Quest for Tech Efficiency 

Rachel Merrick Maggs, VP of Global Growth & Product Marketing at Litera, predicts the wave of vendor consolidation will continue in 2025. With numerous providers entering the market, law firms are looking to streamline their tech stacks. 

“Most IT professionals in law firms don’t want to manage 10-30 different providers,” Merrick Maggs notes. “Lawyers demand reliable technology because every minute counts. We’ll see market separation, with frontrunners emerging as firms prioritize stability and efficiency, alongside innovation.” 

Merrick Maggs also highlights a disconnect between tech investment and user adoption, particularly with GenAI. She anticipates that 2025 will bring more training initiatives to bridge this gap, ensuring lawyers can justify new tech budgets with measurable results. 

6. AI-Driven Legal Assistants and Strategy Work 

Daniel Fisherman, Director of Generative AI & Innovation at Litera, anticipates a rise in the ubiquity of AI agents.  He also believes that LLMs will be able to handle strategic analysis and more complex legal tasks. Litera is already exploring the integration of AI-driven legal assistants that can augment the capabilities of legal teams. 

“In 2025, these AI-driven agents will find their way into everyday operational tasks, enabling firms to optimize their workflows and enhance client service,” Fisherman explains. 

7. U.S. Policy Changes and Legal M&A Activity 

Finally, Avaneesh Marwaha, CEO of Litera, touches on the potential impact of U.S. policy shifts on the legal landscape. While he doesn’t expect a redefinition of core technologies, administrative changes could ease concerns around mergers and acquisitions (M&A), spurring increased activity in the legal sector. 

“The legal sector's resilience to market and political fluctuations means that firms will need to rely more on technology to scale their operations and meet rising demand,” Marwaha concludes.