Legal Chiefs Say Gen AI Will Allow Less Reliance on Law Firms

In-house lawyers foresee less work for outside law firms as innovations in generative artificial intelligence continue.

Fifty-eight percent of legal departments expect to rely less on outside service providers because of Gen AI, according to a new report by the Association of Corporate Counsel and Everlaw. This expectation has more than doubled from last year’s survey, which found 25% in-house legal departments plan to cut the number of law firms they work with within the next year, citing cost savings.

“The expectation for in-house teams to cut costs with AI is becoming a reality, with over a quarter now reporting savings,” Everlaw chief legal officer Gloria Lee said in a statement. “In just three years, AI technology’s accelerating impact on corporate counsel has begun to reshape in-house legal functions, spurring a sea change across the legal industry.”

Even though legal departments are optimistic about reaping the benefits of AI developments, Gen AI has still not been widely incorporated. Only 23% of in-house legal professionals are already using GenAI for their legal work.

The report surveyed 475 in-house legal professionals in the US.

The Monday report comes as law firms grapple with integrating AI into their practices. Law firms have been hiring more tech professionals to fortify their AI efforts for their clients.

Some lawyers have already faced discipline for relying on Gen AI misinformation.