The latest study, conducted this summer by the Association of Corporate Counsel and e-discovery platform Everlaw, examined the extent to which generative AI is being utilized and the impact it is having on legal work, in-house roles and departmental readiness. The report, titled "GenAI and Future Corporate Legal Work: How Ready Are In-House Teams?" included responses from 475 in-house legal professionals in the United States.
More corporate legal teams are embracing AI tools despite ongoing fears about data privacy, output quality and company restrictions due to the promise of increased efficiency, improved client service and potential cost savings, according to the report.
Association of Corporate Counsel president and CEO Veta T. Richardson said in a statement that the report shows the magnitude of generative AI's effect on corporate legal departments' budgets, operations and staff.
"The rapid pace of GenAI's integration into corporate legal departments and the significant impact it is making is remarkable," Richardson said.
Most of the survey respondents, at 58%, said they anticipate relying less on outside legal service providers, specifically due to generative AI, with 49% saying they expect reduced operational costs from AI.
Meanwhile, 25% of respondents already report cost savings on operational expenditures from using generative AI, the report stated.
"The expectation for in-house teams to cut costs with AI is becoming a reality, with over a quarter now reporting savings," Gloria Lee, chief legal officer of Everlaw, 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."
A third of chief legal officers are using generative AI daily, and 79% use it at least once a week. About 23% of legal professionals have proactively integrated generative AI into their daily routines, while 70% of in-house professionals use generative AI at least once a week, according to the report.
In addition, 64% of departments with 100 or more legal staff said they have appointed a generative AI expert, compared to 42% of midsize departments with 10 to 24 staff, and 25% of small departments with two to five staff members.
"With GenAI's potential to significantly increase efficiency, improve client service, and cut costs, it's no wonder legal leaders are embracing this technology as they are continuously asked to do more with less," Richardson said.
About 59% of respondents said they are excited about technology's positive potential on their career, with 86% of legal professionals reporting that generative AI significantly accelerates task completion. Fifty-seven percent said it allows for faster insight and creativity in their work.
Those who were not enthusiastic about generative AI's impact on their careers listed security (72%) and ethical concerns (66%) as their top two concerns. Mid-level attorneys were the least enthusiastic about the technology, and they are also the most concerned about job losses due to generative AI, according to the survey.
Streamlining and accelerating standard processes was respondents' most common expectation of adopting generative AI tools, at 82%, but 73% caution against the risk of nonlawyers relying on generative AI for legal guidance and decision-making, a clear possible negative impact of wide generative AI use across the organization.
Although 49% of participants predicted a reduction of overall operational costs, many also pointed out the potential costs of using generative AI, such as errors due to AI misunderstanding legal contexts (53%), risks resulting from ethical dilemmas in terms of bias and fairness of generative AI algorithms (47%), and the risk that overreliance on technology may lead to skill degradation (38%).
"In-house legal professionals are thus contemplating a balanced perspective toward GenAI adoption," the Association of Corporate Counsel and Everlaw said in the report. "These results emphasize the need for robust safeguards and a focus on human-AI collaboration to ensure responsible and successful GenAI integration within the in-house legal profession."
--Editing by NIicole Bleier.
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