Preparing a Law Firm for AI
A research-backed guide for managing partners, practice managers and directors on how to prepare a legal practice for AI with the right governance, Microsoft 365 foundations and cyber security — before investing in licences.
The short answer
Artificial intelligence is reshaping how law firms operate. Tools like Microsoft Copilot can reduce document review time, summarise meetings, draft correspondence and surface legal knowledge buried across SharePoint. But firms that rush into AI without preparing their environment risk exposing confidential client matter data, producing unreliable outputs and eroding the trust that underpins every client relationship.
Preparation matters more than speed. The firms that will benefit most from AI are those that first strengthen their Microsoft 365 environment, tighten cyber security controls, clean up permissions and establish clear governance. These foundations determine whether AI delivers measurable business value or simply creates new risk for the firm and its clients.
This guide explains what law firms should do before adopting AI, how the LOOKUP Business Modernisation Framework™ applies to this challenge, and what success looks like when technology decisions are guided by business outcomes rather than product features.
Why AI is changing the legal industry
Legal practice has always been a document-intensive, confidentiality-driven profession. Partners and solicitors spend significant time reviewing contracts, managing matter correspondence, conducting legal research and ensuring regulatory and professional obligations are met. AI can reduce this burden — but only if the underlying systems are well-managed and properly governed.
Several forces are converging to make AI adoption a strategic priority for law firms:
In 2024, the Law Society of New South Wales convened an AI Taskforce to help the state's solicitors navigate AI, while the Law Council of Australia maintains a dedicated policy hub on AI and the legal profession. Both organisations encourage practitioners to stay informed about AI's implications for professional conduct and client confidentiality.
Firms are under growing pressure to improve margins. Microsoft's 2024 Work Trend Index surveyed 31,000 knowledge workers across 31 countries and found that 75% of the knowledge workers surveyed reported using AI at work, with power users reporting significant time savings on routine tasks like drafting, summarising and searching for information.
Clients expect faster turnaround, proactive communication and seamless digital collaboration. Firms that cannot respond quickly risk losing clients to more technologically capable competitors.
Legal practices generate and manage enormous volumes of documents — contracts, precedents, matter files, correspondence. AI can help organise, search and extract insights from this information, but only if it is structured and governed properly.
Microsoft Copilot is becoming widely available across Microsoft 365. Firms already using SharePoint, Teams and Exchange are uniquely positioned to benefit — provided their environment is ready.
The Australian Cyber Security Centre (ACSC) promotes the Essential Eight as a baseline for reducing cyber risk, while the Office of the Australian Information Commissioner (OAIC) oversees the Notifiable Data Breaches scheme — both particularly relevant for legal practices handling confidential client information.
What are law firms really trying to solve?
When managing partners say they want to "use AI," they are usually trying to solve one or more of these business problems:
Partners and solicitors spending hours on repetitive tasks — drafting emails, summarising meetings, searching for precedents — instead of delivering legal value.
Learn more →Precedents, policies, matter files and internal knowledge scattered across inboxes, shared drives and local folders with no consistent structure.
Learn more →Doing more with the same team — not by working harder, but by removing the friction that slows down every matter and engagement.
Client matter data is among the most sensitive information any business holds. A data breach can damage client trust and may trigger legal, regulatory, operational and reputational consequences.
Learn more →Staff need to understand how to use AI responsibly, when to trust outputs and when to apply professional judgement — without formal governance this is left to chance.
Clients expect their lawyer to be both technologically capable and security-conscious. AI adopted without governance can undermine both.
Disparate systems, inconsistent processes and duplicated work create unnecessary overhead that grows with the firm.
Preparing for AI is not a single decision. It requires addressing the connected business pressures that determine whether technology investment delivers value or creates new risk.
Why this matters
The commercial impact of these challenges is significant. When partners spend hours on tasks AI could handle, billable utilisation drops. When matter management is chaotic, engagement quality suffers and review cycles lengthen. When cyber security is weak, a single incident can result in regulatory penalties, client departures and reputational damage that takes years to repair.
Margin pressure is real. Recruitment is harder than it has been in decades. Clients are more demanding and less patient. Firms that continue relying on manual processes and disconnected systems will find it increasingly difficult to compete on quality, responsiveness and price.
AI is not a shortcut past these problems. It is a tool that, when built on the right foundations, can help firms address them systematically. The firms that prepare properly will compound the benefits — stronger security, better collaboration, cleaner data and more productive staff — long before the first AI licence is activated.
A business-first approach to AI
Successful AI projects do not begin with software. They begin with a clear understanding of what the firm is trying to achieve, what risks need to be reduced and what foundations need to be in place before AI can be introduced safely.
LOOKUP's approach to helping law firms prepare for AI follows six principles:
Understand what the firm is trying to achieve — productivity, growth, client service, compliance — before selecting any technology.
Establish clear policies for how AI should be used, who is accountable and what oversight is required, particularly around confidentiality and professional duty.
Ensure SharePoint, Teams and permissions are structured so AI can access the right information without exposing the wrong information. Improving document and matter information management is a critical foundation.
Strengthen identity protection, conditional access and data governance before introducing AI into daily workflows.
AI adoption is a business decision, not an IT project. Partners must own the strategy and the outcomes.
Staff need practical guidance on using AI responsibly — not just access to a tool.
60-SECOND AI GOVERNANCE CHECK
How Well Are You Governing AI?
Take LOOKUP's free 60-second check and see whether the basic governance foundations are in place before expanding AI use.
Free • Instant result • No details required
How this maps to the LOOKUP Business Modernisation Framework™
Every AI preparation engagement follows the same structured eight-stage framework. This ensures technology decisions are made in the right order — security before AI, governance before deployment, business outcomes before technology features.
Understand the current environment
Protect identities, devices and information
Remove legacy technology constraints
Create consistent systems and processes
Improve workflows and productivity
Establish governance and AI readiness
Introduce technology deliberately
Measure, review and continuously improve
Understand the current environment
Protect identities, devices and information
Remove legacy technology constraints
Create consistent systems and processes
Improve workflows and productivity
Establish governance and AI readiness
Introduce technology deliberately
Measure, review and continuously improve
What success looks like
When a law firm prepares for AI properly, the benefits extend far beyond the AI tools themselves. The foundations that make AI effective — clean data, strong security, governed permissions, trained staff — also improve day-to-day operations.
Less time spent on drafting, searching and summarising — more time for legal work and client relationships.
Governance, permissions and oversight — not individual discretion.
SecuritySharePoint and Teams structured for secure teamwork.
Microsoft 365Precedents and matter files organised, not buried.
InformationInformed decisions with a clear technology roadmap.
StrategyFaster access to information means quicker answers.
ExperienceIdentity protection and data governance protecting clients.
SecurityA Microsoft 365 environment that supports AI today and future innovation tomorrow.
Research and industry insights
36.7% of Victorian lawyers reported using AI tools in practice
The 2025 Victorian Lawyer Census (n=1,887), conducted by the Victorian Legal Services Board + Commissioner, surveyed Victorian practising certificate holders and found that 36.7% of respondents reported using AI tools in their legal practice. This finding reflects Victorian lawyers specifically, not all Australian lawyers. The research also highlighted the importance of training, workplace guidance, quality assurance and responsible use in AI adoption by legal professionals.
Several recognised organisations provide guidance relevant to law firms preparing for AI:
Published in October 2024, this guide helps NSW solicitors understand responsible AI use, covering confidentiality, professional obligations, supervision and the need for clear AI policies within legal practices.
View source: A Solicitor's Guide to Responsible Use of AIPublished in May 2024 and updated in October 2024, this guidance statement provides a framework for the responsible and ethical use of AI in legal practice, addressing competence, supervision, confidentiality, accountability and the requirement that AI use only occur with firm approval.
View source: Guidance Statement No. 37: Artificial Intelligence in Legal PracticeThe Law Council maintains a policy hub aggregating AI guidance from constituent bodies including the Law Society of NSW, the Queensland Law Society, the NSW Bar Association and others, reflecting the legal profession's growing focus on responsible AI adoption.
View source: Artificial Intelligence and the Legal ProfessionMicrosoft's 2024 annual report surveyed 31,000 knowledge workers across 31 countries, finding that 75% already use AI at work and that power users report significant time savings on routine tasks like drafting, summarising and information search.
View source: 2024 Work Trend Index Annual ReportThe ACSC recommends eight essential mitigation strategies as a baseline for reducing cyber risk. For law firms handling confidential client information, these controls are particularly relevant when introducing AI tools that interact with business information.
View source: Essential Eight Mitigation StrategiesThe OAIC oversees the Privacy Act and the Notifiable Data Breaches scheme. Firms adopting AI must ensure personal and confidential information is handled in accordance with their privacy and professional obligations — making data governance a prerequisite, not an afterthought.
View source: Notifiable Data Breaches SchemeThese organisations do not prescribe a single approach to AI adoption. However, their guidance consistently points to the same conclusion: responsible AI use requires strong governance, secure systems, quality data and informed leadership.
What this could look like in practice
For example, a law firm might encounter the following challenges and work through them using a structured technology approach.
Business Challenge
A mid-sized law firm with approximately 25 staff across two offices wants to adopt Microsoft Copilot. Their SharePoint structure has grown organically over years, permissions are inconsistent, and several former staff accounts still have access to matter folders. There is no AI policy and no clear ownership of technology decisions. The firm is also concerned about professional confidentiality obligations.
LOOKUP Approach
- Conducted a full Microsoft 365 assessment including SharePoint structure, Teams usage and permission review
- Implemented conditional access and multi-factor authentication across all accounts
- Cleaned up legacy permissions and removed inactive accounts
- Restructured SharePoint to align with practice areas and matter management workflows
- Developed an AI governance policy covering acceptable use, human oversight, confidentiality and data protection
- Ran staff training sessions on responsible AI use before deploying Copilot licences
- Launched a pilot with five users across different roles to measure outcomes
Potential Outcomes
- Staff using Copilot for meeting summaries, document drafting and knowledge search with appropriate oversight
- Reduced time spent searching for precedents and matter information
- Stronger security posture with conditional access and cleaned-up permissions
- Clear governance so all staff understand how AI should and should not be used, particularly around confidentiality
- A structured Microsoft 365 environment that supports future AI initiatives
Frequently asked questions
Should law firms use AI?
Yes, but with preparation. AI can reduce repetitive work, improve document search and help staff respond to clients faster. However, firms that adopt AI without governance, security or training risk exposing confidential client information and producing unreliable outputs.
Is Microsoft Copilot safe for law firms?
Microsoft Copilot is designed to work within your existing Microsoft 365 permissions. If your permissions, SharePoint structure and governance are well-managed, Copilot can be used safely. If they are not, Copilot may surface information that should not be accessible — which is why preparation is essential.
Can AI access confidential matter files?
AI tools like Microsoft Copilot can only access information that the user has permission to see. If permissions are poorly managed, AI may expose information more broadly than intended. Cleaning up permissions is one of the most important preparation steps.
How should law firms govern AI?
Governance starts with a clear AI policy covering acceptable use, human oversight, data protection, confidentiality and incident reporting. It also requires executive ownership — partners must take responsibility for how AI is used, not leave it to individual staff discretion.
Do we need AI policies before adopting Copilot?
Yes. An AI policy provides staff with clear guidance on what AI should and should not be used for, how to handle sensitive client information and when human review is required. Without a policy, usage is left to individual interpretation.
Should we optimise Microsoft 365 first?
Absolutely. Microsoft 365 is the platform AI tools like Copilot operate within. If SharePoint is disorganised, Teams is underused and permissions are inconsistent, AI will amplify those problems rather than solve them.
Can AI replace lawyers?
No. AI can assist with repetitive tasks like drafting, summarising and searching, but professional judgement, client relationships and legal expertise remain human responsibilities. AI is a tool that supports lawyers, not a replacement for them.
How does AI improve productivity in a law firm?
AI can reduce time spent on routine tasks — meeting summaries, document drafts, knowledge search, client communications — freeing partners and staff to focus on higher-value legal work and client relationships.
What cyber security controls should we prioritise before AI?
Multi-factor authentication, conditional access, cleaned-up permissions, endpoint protection and tested backups are the baseline. The Essential Eight provides a practical framework for law firms to follow.
How long does AI preparation take?
It depends on the size and complexity of the firm. A structured assessment typically takes a few weeks, followed by implementation of security, governance and Microsoft 365 optimisation. A pilot can then begin within a few months.
Can LOOKUP work alongside our practice management software vendors?
Yes. LOOKUP focuses on your Microsoft 365 environment, cyber security and governance. We work alongside practice management software vendors and other technology providers rather than replacing them.
What industries does LOOKUP support?
LOOKUP works with law firms, accounting firms, financial services businesses, franchise groups and HVAC businesses. Our law firm industry page provides more detail on our approach.
What areas does LOOKUP service?
We support businesses across Greater Sydney from our Rockdale headquarters, including St George, Sydney CBD, the Sydney Airport corridor, the Southern Business Corridor, the Eastern Suburbs and Parramatta & Western Sydney.
Do we need Managed IT Services to prepare for AI?
Not necessarily, but a well-managed IT environment is a prerequisite for successful AI. Many firms benefit from combining AI readiness with ongoing managed IT and cyber security support.
How do we get started?
Book a Technology Strategy Session. We'll assess your current Microsoft 365 environment, cyber security posture and governance readiness, and provide a practical roadmap for AI preparation.
Executive guides
The eight-stage methodology behind every LOOKUP engagement.
Prepare your organisation for successful AI adoption.
Deploy AI with confidence, governance and measurable outcomes.
Develop responsible AI policies and governance.
Align technology investment with long-term business goals.
Prepare Microsoft 365 for secure AI adoption.
Technology services designed for legal practices.
How LOOKUP can help
Executive technology leadership without a full-time CIO.
Implement, optimise and secure your Microsoft 365 environment.
Proactive technology management that reduces downtime.
Practical security that reduces business risk.
Prepare your organisation for successful AI adoption.
Deploy AI with governance, security and measurable outcomes.
What business leaders should do next
If your law firm is considering AI, these practical steps will help you prepare before investing in licences:
Assess your SharePoint structure, Teams usage and permissions. If information is disorganised, AI will amplify the problem.
Confirm multi-factor authentication, conditional access and endpoint protection are in place before introducing AI.
Document the tasks that consume the most staff time — drafting, searching, summarising — as these are prime AI candidates.
Create a clear policy covering acceptable use, human oversight, confidentiality and data protection before staff begin using AI tools.
Provide training on responsible AI use so staff understand when to trust outputs and when to apply professional judgement.
Create a multi-year plan that aligns security, Microsoft 365, AI and business growth — rather than reacting one purchase at a time.
Learn more →Sources & Further Reading
The following primary and authoritative sources support the research, professional guidance and regulatory context discussed on this page:
Law Society of New South Wales
October 2024
Practical guidance for NSW solicitors on responsible AI use, covering confidentiality, professional obligations, supervision and AI policy development.
View SourceQueensland Law Society
May 2024, updated October 2024
Framework for the responsible and ethical use of AI in legal practice, addressing competence, supervision, confidentiality, accountability and approval requirements.
View SourceLaw Council of Australia
2024–2025
Policy hub aggregating AI guidance from constituent bodies including the Law Society of NSW, Queensland Law Society, NSW Bar Association and others.
View SourceVictorian Legal Services Board + Commissioner
2025
Survey of 1,887 Victorian practising certificate holders finding 36.7% reported using AI tools in their legal practice, with findings on training, guidance and responsible use.
View SourceMicrosoft WorkLab
May 2024
Global research surveying 31,000 knowledge workers across 31 countries examining AI adoption, productivity signals and workplace impact.
View SourceMicrosoft Learn
2024
Official Microsoft documentation explaining how Copilot uses Microsoft Graph to access user data within existing permission boundaries.
View SourceAustralian Cyber Security Centre
2024
Australian Government guidance on eight essential mitigation strategies recommended as a baseline for reducing cyber security risk.
View SourceOffice of the Australian Information Commissioner
2024
Official guidance on the NDB scheme requiring organisations covered by the Privacy Act to notify affected individuals and the OAIC of eligible data breaches.
View SourceLOOKUP references recognised industry, government, professional and technology sources when discussing research, regulation and industry trends. Research findings are paraphrased and linked to their original sources wherever practical. LOOKUP's professional observations and recommendations are presented separately from third-party research.
This page provides business technology and governance information and is not legal advice. Law firms should obtain appropriate professional advice regarding their specific legal, regulatory and professional obligations.
Preparing your law firm for AI starts with better decisions
Successful AI adoption begins with strategy, governance and leadership. LOOKUP helps law firms modernise technology, strengthen Microsoft 365, improve cyber resilience and prepare for AI through practical business technology advice. Explore our broader technology approach for law firms.
Peter Kantarelis
Founder, LOOKUP — Business Technology Strategist
Peter Kantarelis is the Founder of LOOKUP and a business technology strategist helping Australian organisations modernise technology, strengthen cyber security and prepare for practical AI adoption.
He regularly works with business owners and leadership teams to improve productivity, reduce operational risk and implement technology that delivers measurable business outcomes. The LOOKUP Business Modernisation Framework™ reflects more than 25 years of helping Australian businesses make better technology decisions.
