Law360 Canada (September 29, 2026, 12:32 PM EDT) -- Canadian lawyers are rapidly adopting artificial intelligence tools to streamline legal work, but industry leaders say firms must carefully assess privacy and data-retention risks. While AI could lower the cost of legal services and help serve more clients, it cannot replace human judgment and client relationships, they say.
Lawyers are particularly in need of technologies that reflect Canadian law, regulation and professional obligation. Clio, a company offering cloud-based software to law firms for legal business management, hosted its event “The New Precedent: AI and the future of Canadian law” on Sept. 23, where industry leaders discussed AI-powered legal work and its impacts on workflow and the market.
Clio’s founder and CEO Jack Newton told Law360 Canada that he saw a lot of demand from Canadian lawyers to hear about how AI is transforming the profession in areas of AI sovereignty and leveraging AI responsibly.
“AI is touching every aspect of how lawyers do work in Canada,” he said. “Everything from helping automate intake processes with clients to actually supporting them, drafting complex legal documents and doing analysis of large quantities of legal data.”
He noted that Clio’s
Canadian Legal Trends Report showed that 95 per cent of Canadian lawyers are using AI in some form, and that AI use has become pervasive in a relatively short amount of time.
“If you think about the kind of AI adoption that we’ve seen over the course of the last two years, it’s on the scale of adoption that the cloud took 20 years to achieve,” he said. “So I think what’s really interesting is the pace and scale of adoption of AI.”
Another notable difference is that lawyers are proactively pulling this technology into their practice.
“It’s not a technology that is being foisted on them or that they feel like they’re being sold on,” said Newton. “I think they intuitively realize how transformative this technology can be.”
It helps them deliver better legal work to their clients, completing it faster, delegating frustrating or unfulfilling aspects of their day-to-day to AI.
“Lawyers quantitatively feel that they have better work-life balance, that they’re delivering better work product to their clients, that they’re able to deliver that work product faster,” he said.
“Ultimately, when I think about the macro-level impact of those changes, they’re able to really expand access to justice because ultimately lawyers are going to be able to serve more clients and serve clients at scale, thanks to the capabilities that AI is delivering to them.”
He said that lawyers are enjoying practising law again, or perhaps enjoying it for the first time.
“What’s really rewarding is hearing the customers talking about just how transformative this has been for their practice and their overall quality of life,” he said. “And I think that’s, you know, maybe a little bit counterintuitive.”
“I think a lot of the narrative we hear about AI is just around the productivity increase that that drives, which is definitely the case,” he added. “But I think this increased level of happiness and job satisfaction that we’re seeing AI drive is actually the more important change to pay attention to.”
He compared AI to the cloud era, seeing concerns around data localization, privacy and security. But AI also brings nuances with a new sphere of concerns.
“We would be concerned about privacy in new ways,” he said. “Now we’re seeing the risk that frontier model providers are actually using the data that people are inputting into the models to train the next generation of models. A concern for law firms needs to be being very clear on what the data retention policies are.”
They need to ensure that model providers are adhering to zero data retention and data is not being used to train new models.
“All of the concerns and due diligence items that applied in the cloud era apply equally well to the AI era,” said Newton. “It’s not that AI is not safe to use in the same way that it’s not the case that the cloud isn’t safe to use.”
“Both technologies are safe to use, but it’s incumbent on lawyers to perform an appropriate level of due diligence on their AI platform the same way they need to undertake that due diligence on their cloud provider.”
In a keynote presentation with John Stackhouse, senior vice-president at the office of the CEO for RBC, Newton said that AI can synthesize huge amounts of information to equip lawyers to make high-judgment, discernment decisions themselves, rather than trusting the judgment of AI.
Stackhouse added that lawyers see the value of judgment as they are providing counsel in essence. Client data, fundamentally, is an exchange of trust.
“Judgment for a lawyer is going to carry value, or as far as we can conceive, being able to read the emotions of your client to understand what they’re going through,” he said. “There’s still a critical need for advisers to talk to the clients and listen to them, to help them think strategically about those emotions.”
While law firms have adopted several AI tools, it’s still in the early phases. A panel with Al Hounsell, senior director of AI innovation at Gowling WLG, Anita Susac-Bilyk, senior manager of library services at Goodmans LLP, Brian Galbraith of Galbraith Family Law and Kim Gale of Gale Law discussed AI use at their respective firms.
Susac-Bilyk noted that tools need to be assessed and reassessed as they are changing at a rapid rate, faster than what was seen with technologies before.
Galbraith said his firm uses AI software to answer calls on weekends. It will have a conversation with clients, send a calendar link and a payment link.
“You come in Monday morning and you have some consultations already set up before you open the door,” he said. “So that’s been very successful.”
Hounsell noted the limitations for what AI can produce and situations where a machine shouldn’t be making certain decisions. Lawyers are starting to parse out this distinction.
“This theme of legal judgment is going to really be highlighted in the coming years as we all kind of grapple with what some of the systemic limitations of AI are to use in certain areas of legal work,” he said.
Susac-Bilyk said that AI can be relied on more for anything that is administrative. While AI can help identify resources to get an answer, the lawyer or law student will be responsible for reading, understanding and applying.
“The culture in our firm is not giving AI legal authority to make decisions,” she said. “AI is our assistant to help us think about things, help us create things, develop things, but we’re the masters.”
“I can do a lot of things, but it’s not going to go before and argue your case in front of the judge,” added Gale. “So you still have to know what your materials say.”
“I think as a litigator, you can rely on it up to a certain point, and you still need to do your fact checks and your materials,” she said.
Susac-Bilyk said that at her firm, students learn foundational skills for AI tools alongside traditional methods.
“This is kind of an experimental move, and we’re going to see what’s going to happen as they grow up as lawyers,” she said.
Hounsell said that for generative AI, power users are much more senior, as they know how to ask the right questions, follow up, iterate and review the outputs of these tools.
Galbraith added that it’s usually lawyers with six or more years of experience that are comfortable using it. Those with less experience are more cognizant of their obligations to verify and check, and want to avoid mistakes at all costs.
Susac-Bilyk stated there are different tools available for different practice areas. On video research tools, litigators provided feedback on the different kinds of use cases they had, how it directly related to what they were doing and what the best use cases were.
Galbraith noted that to adopt any technology, leadership needs to embrace it first before it goes on to train juniors.
“Clients like it,” he said. “Clients want to minimize cost. We’re getting fewer complaints about the cost these days, and I think it’s because our lawyers are becoming more efficient through the use of AI.”
“Lawyers that are hesitant, this is going to help you have a better experience with your clients,” he added. “They’re going to like you if they expect you to use every piece of technology you can to be efficient and effective. I think it’s an obligation we have to be as efficient and effective as possible.”
Hounsell agrees that lawyers need to see use cases tightly tailored to what they do day-to-day. They need to see exactly what the tool can do for them to get them interested in using AI.
“One of the key things that we’ve had to train people on is that you don’t want to throw too much at the tool all at once,” he said.
“Just bombarding it with documents and nuanced questions with multi-parts and that kind of thing — they just don’t get the best outputs. These tools have limited context numbers.”
It’s important to teach the basics on how the tools work, he said. Lawyers are being trained to disaggregate complex data tasks and break down complex workflows.
“We, as lawyers, will become more efficient,” added Galbraith. “Driving down the number of hours will drive down the cost per client, and I think that’s good.”
“We’ll be found more financially accessible to more people, and we’ll be serving a lot more clients because we can do it more efficiently and effectively.”
Ed Walters, vice-president of legal innovation and strategy at Clio, presented on the effects of AI on the delivery of legal services, focusing on the billable hour.
He said that according to a study by the Legal Value Network on AI use, it is expected that the number of hours by partner would go down by about five per cent and the number of hours logged by associates would go down by 20 per cent. This would result in an overall revenue decrease of 13 per cent and an overall loss of profit per partner by seven per cent.
“There has to be some sort of compression in the number of hours it takes to do this existing work,” he said. “Does that necessarily mean that the money we make in this market goes down? I’m not sure that’s true.”
“The truth is that the amount of work in the world, legal work, is somewhat malleable and flexible, and there’s a lot more of it than we reach.”
He said that when the prices or cost of something come down, more people begin to use the service and the market becomes vastly larger and can be used in new markets.
While there are some things the billable hour is good for as a business model, there are also areas where clients may prefer to pay a fixed or scheduled fee.
“In the legal services market, we’re helping one in five people who have legal problems,” he said. “But if we create new crops using AI that bring the cost of the services down, it creates entirely new markets.”
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