By Ryan Zahrai, the founder of Zed Law

AI’s potential to reshape the Australian legal industry isn’t theoretical. It’s already happening. But most firms are missing the real upside. This isn’t about shaving a few hours off admin. It’s about unlocking speed, scale and certainty – so clients can close deals, move money, hire faster and get the green light without lawyers getting in the way.

Legal shouldn’t be a blocker. Too often, it is. Contract redlines stall deals. Advice turnaround kills momentum. Scope drift drags out matters that should’ve closed days earlier. And nobody – particularly a commercial client – wants to hear the delay was “because legal hasn’t looked at it yet.”

That’s where AI comes in; as a layer that accelerates the legal process from end to end without replacing the lawyers. The right kind of model gets you from raw input to a 70-80 percent legal outcome in seconds. It drafts the document, frames the risk, narrows the issues and even proposes next steps, even before a lawyer touches it.

The lawyer then steps in to fine tune and finalise it.

Done correctly, this changes the game. Legal becomes a speed enabler, not a bottleneck. And when you speed up the legals, you speed up everything. Deals close faster, product launches stay on track, procurement clears sooner, and cash hits earlier.

Firms can equip and empower their teams to use AI as a tool for deeper, more strategic work, rather than seeing it as a threat.

Where AI makes sense

Here’s what every lawyer should already be using appropriately configured AI for:

• Issue framing and matter scoping. Before you research anything, AI should outline the risk, the likely legal position, and the available levers. This lets lawyers focus on judgement, not discovery.
• Drafting documents and advice notes. Contracts, memos, scopes, emails, HR advice, IP summaries; AI should handle the first pass. With customised prompts across the firm, it’s faster, cheaper and improves consistency.
• Client-side automation. Intake forms, risk triage, matter classification, quote generation – AI should sit inside your operating system and streamline every recurring decision.

Trust still starts with humans

That’s where the ethical layer matters, because none of this works without trust and human lawyers are still the ethical compass in any legal matter.

AI can’t replace your litigation team. It can’t parse judicial reasoning or apply the kind of strategic judgement needed in complex, high-risk disputes. And it can’t protect confidential material the way lawyers can.

If you’re uploading sensitive litigation material or commercial strategy into a third-party model, you need to understand the risk.

Even Sam Altman flagged this. The issue isn’t model leakage; its compulsion.

If a regulator or court compels an AI vendor to hand over stored prompts or user input, the current position of the legal framework indicates that they would have to comply. At least until this is properly tested, we have to assume that they can’t claim legal privilege like law firms can. That distinction matters, especially when sensitive commercial or litigation material is involved.

That’s why AI tools used in legal work must sit on an advice-specific layer, with client consent and clear boundaries. Clients need to know when their data is being handled by tools that might be discoverable.

I may get cancelled for saying this, but most legal work isn’t sensitive. For the vast majority of commercial, corporate and advisory work the risk is minimal. It’s repetitive, operational and transactional. And that’s exactly where AI should be deployed; confidently and at scale.

The real value of AI in law isn’t cost reduction – it’s business acceleration. The faster we get to legal certainty, the faster a company can sign the deal, onboard the client, ship the product or close the round. That’s what clients care about. And that’s what AI enables.

It also forces a rethink on pricing. Clients don’t want hours; they want outcomes. If a smart AI plus human review can deliver that in 30 minutes instead of three days, then why are we still billing by the hour? Billing by the service then becomes possible, and makes sense for the client and the firm.

The Australian legal industry is sitting at a commercial inflection point. Efficiency isn’t the prize anymore. Speed to certainty is. That’s the unlock, and the future of legal.

Firms that build for it now will lead the next wave.

Not because they used AI. But because they used it right.