More than half of Victorian lawyers use AI, but only a quarter cut client fees

More than half of Victoria's lawyers use artificial intelligence in their work, but only about a quarter have passed any efficiency gains on to clients as lower fees, a new survey has found.

The 2026 census of 2,221 of the state's lawyers, conducted by the Victorian Legal Services Board and Commissioner's legal services research centre, found AI use in legal practices rose from 37% to 55% over the past year. Just 26% of respondents said their use of AI had resulted in lower client fees.

Where AI is used most

AI use was most common in trade practices (85%), banking and finance (78%) and information technology and telecommunications (78%). It was far less common in criminal law (29%), family law (45%) and administrative law (46%).

Most lawyers — 79% — reported using consumer chatbots such as ChatGPT, Claude, Gemini or Copilot, while 22% used legal-specific tools alone. A 2025 report found use was highest among lawyers under 30; by 2026 that gap had largely disappeared, although usage remained low among those aged 60 and over.

Fee reductions were more likely to be reported by lawyers working for business clients (34%) than for individual fee-paying clients (23%). Some 18% said AI had allowed them to take on work that would previously have been uneconomical.

Principal researcher and report co-author Dr Georgie Rychner attributed fee cuts at corporate and big firms to those clients being repeat users of legal services. "They have a high level of legal capability," she said, adding that such clients may also use AI in their own work, giving them a better understanding and the ability to advocate for lower prices.

Clients bring AI errors

Rychner said the efficiency gains from AI were not as high as expected. A 2025 survey found 89% of practitioners said they took steps to verify the accuracy of AI output, which may have cancelled out those gains.

In 2026, clients increasingly did their own AI-assisted legal research. Some 46% of lawyers reported clients arriving with inaccurate or misleading information, and 41% said clients presented AI-generated documents that required correction. Nearly half said client AI use increased the time and effort required, compared with 19% who said it reduced it.

"What we are hearing is that clients are more frequently arriving with misleading or inaccurate information about their legal problems, more so than they're arriving with a better understanding of legal problems," Rychner said, adding that more research was needed on client perspectives.

Courts respond

Australian courts and legal bodies have been grappling with rising AI use among lawyers and the public since 2023. A Victorian lawyer last year became the first in the country to face sanctions over false citations, losing the ability to practise as a principal lawyer, and regulators in Western Australia and New South Wales opened investigations in similar cases. The federal court issued new rules on generative AI in April, and high court chief justice Stephen Gageler said last year that AI-generated content in legal cases had reached an "unsustainable phase".

Source: The Guardian World.