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The legal industry is undergoing a technological transformation at a pace once thought impossible. According to a new global survey released by the Association of Corporate Counsel (ACC) and Everlaw Inc., the use of generative artificial intelligence (GenAI) among in-house legal departments has more than doubled in the past year.
In 2024, only 23% of in-house counsel reported incorporating generative AI into their operations. Today, that figure has surged to 52%, reflecting how quickly corporate legal teams are embracing technology to streamline operations, reduce reliance on outside law firms, and boost productivity.
A Global Shift in Legal Operations
The ACC–Everlaw survey, which polled 657 in-house legal professionals across 30 countries, highlights a sweeping change in how corporate legal departments view and apply AI. While only a small number of teams experimented with AI in prior years, the findings show that 2025 marks a turning point — the year when GenAI became an essential component of modern legal work rather than a novel experiment.
Survey participants noted that generative AI is primarily being used for drafting contracts and legal documents, conducting research, managing compliance documentation, and supporting contract lifecycle management. Some departments have also integrated AI into internal communications and legal knowledge management, helping teams retrieve and synthesize complex information far more efficiently than before.
Less Dependence on Outside Counsel
One of the most significant outcomes of this AI adoption surge is the shift in how in-house departments plan to use — or not use — external law firms.
A striking 64% of respondents said they expect to outsource less work to outside counsel as their teams become more comfortable using AI-driven tools internally. This trend aligns with another finding: roughly half of in-house lawyers anticipate that generative AI will enable their departments to cut back on outside legal spending altogether.
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This change represents a major recalibration of the traditional corporate legal ecosystem. For decades, law firms handled the lion’s share of drafting, discovery, and research-intensive tasks. Now, AI is enabling in-house teams to perform much of that work themselves — faster and at a fraction of the cost.
The Cost Paradox: Savings vs. Expectations
However, while enthusiasm for AI is high, tangible cost savings have not yet fully materialized. The survey found that 59% of in-house lawyers have not yet seen lower bills from law firms as a result of those firms adopting AI.
Still, the expectation is clear — and pressure is mounting. Many in-house leaders say that as AI continues to reshape workflows, they will push law firms to revise billing structures, introduce AI efficiency pricing, and provide more transparent value-based models.
This sentiment reflects a growing divide between law firms experimenting with AI tools internally and corporate clients who expect measurable benefits from those innovations.
Building Confidence and Overcoming Barriers
While adoption rates are surging, challenges remain. Some legal departments cite data privacy, ethical considerations, and lack of training as the top obstacles to widespread AI integration.
Others note that without clear governance policies, even well-intentioned AI use could create risks. Several respondents emphasized the need for company-wide frameworks that outline how, when, and by whom AI tools can be used — especially for sensitive or confidential matters.
Despite these hurdles, most in-house counsel agree that the benefits outweigh the risks. Many report that GenAI has already helped reduce manual workloads, eliminate repetitive drafting tasks, and free up lawyers for higher-value strategic work.
The Law Firm Response
For law firms, the message from their clients is impossible to ignore. As more corporate legal departments adopt GenAI, they are demanding that outside counsel do the same — not only to remain competitive, but to demonstrate quantifiable value.
Legal industry analysts suggest that this trend could accelerate the transformation of the “billable hour” model, replacing it with pricing structures that reward efficiency and technological sophistication. Firms that continue to resist automation may find themselves losing ground to more tech-savvy competitors who can deliver comparable results faster and cheaper.
Moreover, this shift could redefine the client-law firm relationship entirely. Instead of being reactive service providers, outside counsel may need to function more like strategic partners, advising on AI ethics, compliance, and best practices, rather than simply billing hours for document review.
A Permanent Technological Turning Point
The ACC–Everlaw findings underscore a clear message: generative AI is no longer an emerging trend — it is the new normal in corporate legal practice.
Just one year ago, many general counsels were cautiously experimenting with AI, often limiting its use to pilot programs or research assistance. Today, AI tools are being integrated directly into daily workflows, helping legal teams manage risks, respond to regulatory changes, and provide business leaders with faster, data-driven insights.
Even as adoption grows, the transformation is far from over. Many experts predict that over the next two years, AI will become a standard feature in every major corporate legal department, much like document management systems or e-discovery platforms became indispensable in earlier decades.
The Road Ahead
The exponential growth of GenAI use among in-house counsel highlights a broader truth: the future of legal work will depend on how quickly professionals adapt to new technologies.
For law firms, the challenge is clear — evolve alongside their clients or risk becoming obsolete. For corporate legal departments, the opportunity is equally immense — to lead innovation within their organizations, deliver more value at lower cost, and redefine what it means to practice law in the digital age.
As AI continues to mature, one thing is certain: the legal profession will never look the same again.
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