A third of in-house legal teams will turn to AI to reduce costs: ACC and Everlaw survey

A new report by the Association of Corporate Counsel, in partnership with cloud-native litigation platform Everlaw, entitled The State of Collaboration in Corporate Legal Departments reveals that US legal departments are bringing more matters in-house, shifting work to smaller firms, and leaning more on technology – including AI – to help reduce costs.

Key findings from the report include:

  • 66% of legal teams will bring work in-house to reduce costs, compared to 59% in 2022 
  • 39% say they will shift work from big firms to smaller firms
  • 33% look to AI to control costs – up from 12% last year – which nearly tripled 

Additionally, in-house teams are looking to do more with less regarding their outside counsel:

  • Outside counsel needs to raise their game around costs, with only 42% of in-house legal professionals saying they’re happy with cost transparency and just 38% with cost predictability. 
  • One in four say they’ll cut the number of law firms they work in within the next year, with the top reason overwhelmingly being (79%) to increase cost-effectiveness.
  • While only 41% say they’ve always felt comfortable requiring their law firms to use modern technology for better efficiency, 68% say they’ve at least sometimes felt comfortable doing so. 

Legal teams continue to be seen as roadblocks on projects and nearly half reported they are consulted too late in strategic corporate decisions. 

  • 70% say the top goal is to be better aligned with other business departments across the company
  • Nearly half (47%) say they get engaged after strategic decisions have been made, limiting their ability to provide strategic advice. 
  • While 33% say they need new technology to centralize data and collaborate more efficiently, 71% cite a lack of bandwidth for process improvements as the main obstacle to stronger collaboration within their organization. 
  • Only 20% said that they work closely with IT but 32% said that they want to closely align with IT.  

With legal teams’ responsibilities increasing, yet continually being asked to do more with less, technology adoption is likely the most efficient way teams can improve communications with every corner of the organization.

“A true digital transformation of the legal department will get them through this last mile for greater parity with other departments. GenAI may become the killer app to drive the needed cost savings and create efficiency improvements.”

Source: Canadian Lawyer



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