AI could improve the efficacy of both legal and administrative work for solos and small firms, says Joshua Lenon
While solo and small law firms have embraced legal technology and automation, they are still significantly behind mid-sized law firms in adopting artificial intelligence, according to a report from Clio.
Clio recently released its 2025 “Legal Trends for Solo and Small Firms” report. The report shows that small firms, defined as having five or fewer full-time employees, have embraced legal technology tools for document management, cloud storage, and video conferencing. However, significant progress remains in integrating AI into their practices.
“They barely dipped their toes into AI,” says Joshua Lenon, lawyer in residence and data protection officer at Clio.
Not only are smaller firms slower to adopt AI, but they are also less likely to integrate it meaningfully into their workflows. Lenon says that most solo and small firm lawyers describe their AI use as minimal – typically limited to experimenting with tools like ChatGPT rather than fully incorporating AI into their day-to-day operations.
“It seems to me that there are some missed savings there,” he says.
By contrast, 59 percent of larger law firms have adopted AI more widely, with 11 percent reporting full implementation.
Lenon says that the disconnect is striking in the context of flat-fee billing. Clio’s data shows that solo and small firms are more likely than mid-sized firms to offer flat-fee services (15 percent compared to nine percent).
He adds that that billing model is ideally suited to AI since productivity gains wouldn’t impact billable hours, as they might in a traditional hourly structure. Yet, despite the natural fit, smaller firms have been slow to adopt AI tools that could make their flat-fee work more efficient.
Moreover, solo and small firms have the lowest utilization rates in the industry – 27 and 32 percent, respectively – compared to around 50 percent for mid-sized law firms. They spend the least time on billable work because, as Lenon put it, “they wear many hats”: business development, client intake, administrative tasks, and more.
He suggests that AI could ease that burden by automating routine functions like drafting marketing emails, handling intake through chatbots, or generating first drafts for flat-fee matters.
“The blind spot seems to be in how they can leverage technology above and beyond the limitations of their staffing.”
Small firms and solo practitioners could use AI to streamline their legal and administrative work. Lenon says they are especially well-positioned to capitalize on AI’s productivity potential because they rely less on billable hours and more on flat fees.
This structure, he says, allows them to save time per client, increase output, and handle a more extensive client load without adding staff. As a result, they could enjoy a cumulative productivity advantage that mid-sized firms – still tied to hourly billing – are less able to realize.
The report shows that solo and small firms are expanding their billing models. Around 80 percent of solo firms that use flat fees apply them to entire legal matters.
Still, when looking at aggregated usage data – as opposed to survey responses – it’s clear that hourly billing remains the predominant method across firms of all sizes, Lenon says.
Referrals remain the most effective client acquisition method for solo and small firms, with 59 percent reporting them as their top source of leads. Lenon adds that many of these firms operate with limited marketing budgets and rely on word of mouth and professional networks.
However, according to the report, firms that combine referrals with digital client intake tools are seeing stronger results across key business metrics, including revenue and conversion rates.
