Where an Agent Fits in a 20-Person Law Firm, and What Stays with the Fee Earner

On 17 August 2026 the SRA published a warning notice titled Misuse of AI. It followed 42 reports of potential AI misuse received between July 2025 and July 2026, with investigations ongoing on inaccurate citations, supervision and confidentiality. Two failures lead the notice. Fabricated or inaccurate content: hallucinated authorities and citations in research, advice and court submissions. And confidentiality: client information entered into AI tools without contractual and technical safeguards, with the Upper Tribunal observing in a 2026 immigration appeal ([2026] UKUT 81 (IAC)) that putting client correspondence into an open AI tool could breach confidentiality and permanently waive privilege. The SRA’s effective supervision guidance, updated on 12 June 2026, says AI output must be subject to human review, scrutiny and professional judgement, and that an authorised individual retains ultimate responsibility for legal services delivered with AI assistance. The SRA is not trying to stop AI. It is insisting on oversight, and the Law Society welcomed the notice.

Read the reports behind it and a pattern appears. Almost every failure is a solicitor putting a matter into a general-purpose tool and trusting what came back. An agent built inside the firm’s own Microsoft 365 tenant, grounded on the firm’s own documents, that drafts for a fee earner to review before anything leaves the building, is the opposite shape. That is the argument of this post, made once. The rest is the practical split: where an agent fits in a firm of ten to forty fee earners, and what stays with the solicitor. Our earlier posts on using Copilot with client data and where an agent’s data goes cover the tenant boundary in detail.

One thing to be clear about before the split. This is where we would start with a small law firm. It is not a description of work we have delivered for one. The two patterns it draws on most, a letter drafted from a form and correspondence read and filed with an audit register, are ones we have built for accountancy practices, and we say so where they appear.

The line

The work before the advice is where an agent lives. Taking instructions, drafting the client care letter, reading and filing correspondence, searching for conflicts, building a chronology, drafting the status update. It is the searching and the typing. The advice, the judgement, anything that goes before a court and anything privileged that would leave the tenant stays with the solicitor. Draw that line hard at the start and keep it drawn, and most of the governance conversation gets shorter.

A matter’s life, with an agent stepping in

Follow a new instruction from the first call to the first status update.

Intake and the client care letter

A form captures the client, the matter type, the scope, the fee basis and the supervising solicitor. From those fields the agent drafts the client care and engagement letter from the firm’s own precedent, including the regulatory content the firm already includes, and routes it to the supervising solicitor. The solicitor reviews and sends. Nothing goes to the client until they do.

This is the law firm version of the engagement letter pattern we have built for accountancy practices, where a thirty to sixty minute drafting job became filling in a form and reviewing the output. That is the whole claim. Why it is defensible: the wording is the firm’s own, the reviewer is the person the SRA’s guidance already makes responsible, and the review point is built into the flow rather than left to habit.

Incoming correspondence

Post arrives. Scanned letters are read, matched to the matter, filed to the document management system under the matter reference, logged in an audit register and surfaced in a Teams channel. Anything with a deadline, court orders, limitation reminders, counter-notices, is flagged to a person rather than actioned. The same pattern is running in an accountancy practice with more than 1,500 live clients, described in our post room case study and walked through stage by stage in one letter, two minutes.

The audit register matters more in a law firm than anywhere. The firm can show what arrived, when, where it went and who handled it, from one place, without reconstructing it from a scanner folder. For a supervising solicitor that is evidence of oversight, not just tidiness.

The conflict check, first pass

A new instruction names people and companies. The agent takes those names, searches the practice management system and the CRM for matches and related parties and produces a report. It never clears a conflict. A person reads the report and makes the call. The value is the twenty minutes of searching that used to be done by hand, not the decision, and the report is a better starting point than memory because it searched everything rather than what someone happened to recall.

Chronology and bundle preparation

From the documents in a matter folder, the agent drafts a chronology with a source reference against every entry, so the fee earner can check each line against the document it came from. This is the one to describe carefully, because it sits closest to the failures the SRA is investigating. The output is a draft with citations to the firm’s own files, not to case law. Every entry is checkable in a click. If an entry cannot be traced to a document in the folder, it should not be in the chronology, and the agent’s instructions say so. That checkability is the difference between this and a hallucinated authority.

Client updates

From matter notes and time entries, the agent drafts the periodic status email in house style. The fee earner edits and sends. It is small and frequent, and it is the one clients notice, because the update arrives on the day it was promised rather than the week after.

What an agent should not do in a law firm, yet

This is the section a cautious reader should judge us on, so it is not softened. As a first agent for a small firm, we would not build:

• Legal research, or anything that generates authorities. The hallucination risk is exactly what the SRA is investigating, and a first agent should not go near it.
• Anything that sends to a client or a court without a person in between. Every path above ends at a fee earner’s review, and that is deliberate.
• Anything that moves privileged material outside the tenant. Keeping the agent inside the Microsoft 365 boundary is the point of building it there, and it is the boundary the firm already governs and can audit.
• Advice. An agent that drafts a chronology is preparation. An agent that tells a client what to do is not something we would build, and we would say so on the call.

Where models are used more freely, as in the model picker for legal document review, the same rule applies: a better draft is still a draft. And the autonomous agents Microsoft is previewing, covered in our post on Scout and autopilot agents for accountancy and law firms, are not where a 20-person firm should start.

The governance a 20-person firm can actually run

The whole discipline for a first agent is five points, and none needs an IT team. A named owner. A one-page scope covering what the agent does, what data it can touch, who can use it and what it must never do. Data access on least privilege, checked against the scope. Conversation transcripts switched on and reviewed for ten minutes a week. A kill switch usable in under a minute, and a handful of known questions run through the agent before any change goes live. What happens after the agent is built sets each one out.

Two of the five map directly onto the SRA’s language. The named owner is the supervising solicitor’s accountability made concrete: one person responsible for what the agent does, which is what the supervision guidance asks for. The weekly transcript review is the human oversight the guidance describes, done as a habit rather than asserted in a policy. The one-page scope is the document we would expect a COLP to want to see, because it says in plain terms what the agent is allowed to do and what it is not.

None of this is legal or regulatory advice. It is a description of how we would build and run an agent. Every firm should check its own obligations, its engagement terms and its insurer’s position with its COLP before an agent touches a live matter.

What it costs

A client care letter build sits at the low end of the typical £5,000 to £15,000 range. A correspondence pipeline with document reading and an audit register sits at £10,000 to £15,000, with £10 to £200 a month in Azure consumption. Running costs on the classic harness are small, because licensed users draw no Copilot Credits within fair use, and the connector tier for the practice management system is the thing to check at Design before the price is fixed. The full year, licences and support included, is worked through for a 30-person firm in what a first agent costs in year one. The accountancy equivalents of the jobs above are in five admin jobs an agent can take off a practice.

Bring your intake process

The quickest way to find out which parts of this apply to your firm is to bring your matter intake process to a free consultation and we will tell you which steps an agent can take, which stay with the fee earner and what the first build would cost. The AI agents for law firms page sets out the jobs we scope most often and the published prices.

Sources checked

Last checked: 12 September 2026.

• SRA, responsible use of AI, warning notice release, 17 August 2026
• Law Gazette, SRA looking into dozens of reports of AI misuse, 12 August 2026
• Lester Aldridge, AI in legal practice: innovation must not come at the expense of professional judgement
• Good Transformer, the SRA’s AI misuse warning and the supervision guidance
• FiveForward pricing