Why Law Firms’ AI Solutions Miss the Mark for In-House Legal Teams
AI adoption in legal teams grows, but only 11% fully integrate generative AI. Law firms’ AI tools often don’t match in-house needs, causing a cautious approach.
Law Firm AI Use Cases and In-House Legal Needs Don’t Align
AI tools have become essential for in-house legal teams—not just for completing tasks, but also for grasping how AI works and managing its risks. A recent survey of 150 general counsels by Legal Business and Thomson Reuters showed a 9% increase in legal tech adoption, especially generative AI, compared to last year.
Despite this growth, only 11% of in-house teams have fully integrated generative AI into their workflows. Another 37% are still piloting or rolling out AI tools, while 35% haven’t started yet. This cautious approach reflects the challenge of balancing AI’s potential with operational realities.
Pressure to Do More with Less
“Doing more with less” has been a mantra across industries for years. With tighter budgets, AI tools have sharpened the focus on operational efficiency, including within legal departments. Other business units—HR, finance, procurement, marketing—are also exploring AI, increasing pressure on legal teams to catch up.
Law firms are responding by promoting their AI capabilities. They use AI for contract reviews, template creation, report drafting, and speeding up e-discovery. These claims, often highlighted in marketing materials, aim to show clients that they’re leveraging AI to reduce billable hours.
The Disconnect Between Law Firms and In-House Needs
However, law firms often struggle to clearly demonstrate how their AI use benefits in-house teams or translates into cost savings for clients. While law firms present themselves as AI-savvy advisers, there’s frequently a mismatch between the AI applications law firms excel at and what in-house legal teams actually require.
For example, large-scale document reviews and pattern matching are common law firm tasks but rare for in-house teams. In-house legal departments usually deal with smaller document volumes or individual contracts. Because these needs arise sporadically, it seldom makes sense for them to build these capabilities internally.
In-house teams want AI solutions that help with specific, occasional tasks—like contract review, document markup, or extracting individual insights. Automating repetitive, time-consuming duties can free up legal staff to focus on higher-value work.
Clearing Up AI Confusion
Law firms’ current AI messaging may actually confuse in-house lawyers, making it harder to understand how AI fits into their day-to-day roles. This complexity can make legal teams dismiss AI’s practical benefits prematurely.
A better starting point for in-house teams is familiarization with available AI tools. Many are already aware of generative AI platforms like ChatGPT or Copilot and may use them for research. Beyond these, there’s a broad range of AI products that can streamline administrative tasks and improve efficiency.
It’s also valuable for legal teams to review their existing processes to identify where AI or other changes could create efficiency gains. External advisors can provide fresh perspectives and suggest solutions. Often, a mix of people, process improvements, and technology—not technology alone—will deliver the best results.
Managing AI Risks
As gatekeepers of legal risk, in-house lawyers must understand how AI is used internally and across the organization. This includes knowing potential risks such as inadvertent disclosure of confidential information, intellectual property, or personal data to AI providers, as well as risks from AI errors or “hallucinations.”
Even closed AI systems carry risks. Cybercriminals increasingly target vulnerabilities in third-party systems within corporate technology stacks. Awareness and training are critical to managing these risks effectively.
None of this means delaying AI adoption. Instead, legal teams should be proactive—learning about AI risks and seeking external support to navigate them. This approach helps maximize AI's benefits while minimizing exposure.
Developing Policies and Best Practices
Legal departments can benefit from collaborating with law firms to develop clear AI policies and best practices. These frameworks help organizations use AI safely and ethically, balancing opportunity with caution.
For large organizations, AI offers a chance to expand legal capabilities and focus human resources on complex, high-value challenges. But it also raises important questions about culture, ethics, intellectual property, bias, and the limits of automation.
In-house legal teams must gain AI knowledge and skills to keep pace. Law firms can provide guidance—but only if they understand where to begin and what in-house teams truly need.
Next Steps for In-House Legal Teams
- Explore a wide range of AI tools beyond generative AI to support everyday legal tasks.
- Review and optimize internal legal workflows to identify efficiency opportunities.
- Implement training to understand AI risks and appropriate use cases.
- Collaborate with external advisors to develop AI policies tailored to the organization.
- Maintain oversight of AI usage across departments to mitigate legal and compliance risks.
Building AI competence in legal teams is no longer optional. It’s essential to unlocking AI’s practical benefits while safeguarding the organization from emerging risks.
For legal professionals seeking to improve their AI skills, comprehensive training resources are available. Consider exploring specialized courses that focus on AI in legal practice, automation, and generative AI tools to stay ahead:
