How AI is transforming in-house legal departments

Legal leaders have sometimes taken a wait-and-see approach to AI. But a new wave of technologies and growing adoption outside the office is changing the narrative.

It all comes at a time when legal leaders are being asked to do more with less. Corporate legal departments are expected to enhance efficiency, manage risk and support business strategy — often with constrained budgets and resources. AI has emerged as a potential net-new resource to help in-house legal teams support the enterprise and drive real value.

When GCs and CLOs first assess their AI fit, they typically tick off two boxes. First they weigh the opportunity for their organization. Then, once they have determined that AI can provide value, they map out what implementation would look like.

This report explores the scale of the AI opportunity for legal teams and how they can capitalize on it. Designed for senior legal and technology leaders, it examines legal AI use cases such as contract management, legal risk mitigation and operational efficiency – and offers a roadmap for leaders to transform their department into a proactive, data-driven function that delivers value across the enterprise.

Key AI benefits for legal

AI can make its greatest impact when streamlining document-heavy processes. In those areas, it enables legal teams to operate with greater speed and precision, reduce costs and enhance compliance. It also empowers teams to focus more acutely on strategic priorities – and ultimately position the department as one that drives value for the businesses.

Specific use cases include contract management, eDiscovery and litigation, compliance management and legal research.

When in-house legal teams look at implementing AI, they often benefit from technology investments made in years prior. Integrating AI to these preexisting tools builds on their functionalities to level up their value for departmental operations.

Acting as a kind of unifying intelligence layer, AI can connect systems to provide a holistic view of legal risks and opportunities, from contract lifecycle management to eDiscovery to compliance and risk management software and enterprise legal management.

AI is iterating, and quickly. The next generation, called “agentic AI,” aims to change how legal operations work by shifting to AI-driven processes with human oversight. This new AI can handle tasks like analyzing data, automating complex processes, managing contract negotiations and improving litigation strategies.

Legal departments should get ready for AI to play a key role in strategy and decision-making. It can help by simulating scenarios, suggesting strategies, and providing real-time insights on legal risks and obligations, making decision-making more efficient and informed.

Key implementation considerations

Rethinking legal operations

AI certainly has the potential to significantly boost efficiency, cut costs and foster better collaboration within legal teams. However, to truly unlock these advantages, it's important for legal teams to take a step back and reevaluate their current operating models. This includes reassessing how they work with vendors and rethinking their approach to legal spending.
Driving AI transformation from the top

Like any major organizational change, success will likely depend on leadership. Leaders such as GCs and CLOs should act as AI champions, driving innovation while balancing governance, ethics and business impact. Their leadership will likely determine whether AI becomes an enabler of smarter, data-driven decision-making or remains underutilized.
Building a strong data foundation

AI is only as effective as the data it relies on. To ensure AI models perform well, legal teams need to provide data that is structured, clean, and consistent. It's essential for teams to actively work towards maintaining these data standards. Additionally, strong data governance plays a crucial role, especially as AI brings about intricate issues concerning data privacy, security, and regulatory compliance.
Empowering legal teams

The real power of AI lies in augmenting human expertise, enabling legal teams to work smarter, make more informed decisions and drive greater business value. Part of AI adoption involves training legal professionals to understand the strategic potential, risks and practical applications of AI tools.