Reimagining the Legal Industry: Pathways to 2040
Last autumn in Austin, Texas, we brought together investors, general counsel, technologists and industry leaders to confront a simple but uncomfortable question: what if the legal industry in 2040 looks little like the one we know today?
The gathering formed part of Pathways: A Roadmap for In House Teams, led by The LegalTech Fund in partnership with LinkSquares and ALM, with Leaders’ Quest designing and facilitating the process. Together, we explored how the legal ecosystem might evolve toward 2040 under the accelerating impact of artificial intelligence, interoperable data and new forms of capital.
The Three Horizons framework provided the structure for this exploration. It enabled participants to examine the system across time: what must be optimised in today’s model, what experiments signal transition, and what future architecture could redefine the industry altogether.
In Austin, leaders considered what’s true in today’s system. Profitability remains concentrated among the largest firms. Across the wider ecosystem, rising volume and complexity, legacy business models under strain, uneven technology adoption and persistent gaps in access and usability point to a system nearing the limits of its current design. Success in some quarters is masking structural tensions that will define the next decade.
Participants also examined how early experiments in automation, hybrid workflows and new operating models are beginning to reshape the system. What emerged was the outline of an industry reorganising around scalable expertise, shared data standards and a more deliberate partnership between human judgement and machine capability.
By 2040, this could amount to something more fundamental: a legal ecosystem designed not around reactive service, but around prevention enabled by interoperable data and system level capability.
Six shifts redefining value
The Pathways conversations surfaced six structural shifts already in motion:
Value is moving from time spent to outcomes delivered. As hybrid workflows mature, clients increasingly question what they are paying for. Speed, prevention, clarity and confidence matter more than hours billed.
Trust is shifting from reputation to evidence. Clear processes, transparent use of AI and strong data governance are turning trust into something demonstrated in real time rather than implied by brand alone.
Hybrid human machine pathways are becoming the norm. Clients move fluidly between automated guidance, machine led triage and human judgement, reshaping expectations of how legal support should feel.
Expertise is shifting from bespoke work to scalable capability. Platform models allow insights and standards to improve with use, moving value from individual effort to system level performance.
Documents are evolving into dynamic data models that drive decisions. As contracts and precedents become interoperable data, legal artefacts function less as static records and more as living systems that can trigger action, predict risk and prevent disputes.
Lawyers are becoming multidisciplinary advisors. Legal questions now intersect with technology, operations, finance and risk. Increasingly, the work is one of orchestration, bringing together capabilities, insights and systems to support better decisions.
Taken together, these are not incremental improvements. They signal a redefinition of how value is created, measured and scaled.
The strategic rise of in house teams
Corporate legal teams sit closest to the flow of business decisions. They are already experiencing rising expectations for speed, clarity and integration. Volume and complexity are growing faster than resources, while fragmented data limits visibility across matters.
The opportunity is significant. Over time, in house teams could become one of the organisation’s most strategic assets: shaping decisions earlier, spotting risks sooner and guiding the business with clearer, data driven insight.
This would represent a fundamental paradigm shift from a service model to a systemic, fully scalable platform.
In practice, the transition is already visible. Routine work is routed through automation and self service. Software engineers and data scientists are joining legal teams to redesign workflows. Legal operations functions are strengthening orchestration across the enterprise. Portfolio level oversight of risk is replacing matter by matter management. Structured data is becoming the prerequisite for further automation.
The ambition is clear: to move from reactive legal service to strategic, upstream leadership.
A wider leadership question
The legal market is entering a period of rapid reconfiguration. New categories are forming, new economics are taking hold, and vast unmet demand is becoming reachable.
Few sectors are immune to similar forces.The significance of the shifts identified in Austin reaches well beyond law. Across sectors, leaders are confronting systems being rewired in real time by AI, data, automation and shifting expectations of value.
When data becomes interoperable, when expertise scales through platforms, when trust becomes measurable and when human roles are redefined alongside machines, leadership itself must evolve. The challenge is not simply to adopt new tools. It is to see the system clearly enough to shape it.
The Three Horizons framework creates that space to explore this disruption. It allows leaders to hold current performance and future possibilities in the same conversation. It surfaces what must be optimised, what must be experimented with and what must be built from first principles.
The deeper question raised in Austin applies well beyond law:
What signals of disruption are you noticing in your own system?
Download the report here
