AI’s Expanding Role in Legal Departments: Beyond Efficiency

Corporate legal departments are rapidly adopting artificial intelligence (AI), but a growing consensus emphasizes that measuring the value of AI solely through efficiency gains is a critical mistake. The focus must broaden to encompass effectiveness, risk mitigation and strategic enablement to demonstrate a true return on investment and secure continued support from C-suites.

The Rise of AI in Legal Operations

Generative AI adoption in corporate legal departments has nearly doubled year-over-year, with 87% of general counsel reporting its use within their teams as of March 2026, compared to 44% in 2025. FTI Consulting and Relativity’s General Counsel Report highlights this significant increase, alongside a growing recognition of AI as a strategic priority. Approximately 70% of legal departments plan to invest in fresh technologies in the next 12 months, further underscoring the impact of technology on legal strategy and function.

Beyond Cost Savings: The Four Plates Model

A framework for evaluating AI’s impact, known as the “Four Spinning Plates” model, suggests that general counsel should focus on four key areas: effectiveness, efficiency, risk protection, and strategic enablement. Thomson Reuters Institute emphasizes that efficiency is merely a means to an end. Gains from AI are only meaningful when they translate into better advice, stronger protection of the business, and smarter business support.

Common AI Applications in Legal Departments

Legal departments are currently leveraging AI for a variety of tasks, with summarization being the most prevalent use case, utilized or experimented with by 83% of departments. The General Counsel Report also identifies significant adoption in areas such as identifying contract clauses (63%), audio and video transcription (53%), analysis of foreign language materials (40%), and first-pass document review (37%). Other areas of comfort include legal research, e-discovery, contract drafting, and contract analysis.

The Risk of Narrow Measurement

Focusing solely on cost savings as a measure of AI’s value can be detrimental. Legal departments that prioritize efficiency above all else risk signaling to C-suites that legal costs can be reduced, potentially leading to budget and headcount cuts. Thomson Reuters warns that this narrow measurement invites cuts and hinders the perception of the legal department as a strategic asset.

Formalized Technology Roadmaps

The number of legal departments with a formalized technology roadmap has reached an all-time high of 53%, more than double the 25% reported the previous year. FTI Consulting notes this trend underscores the increasing importance of technology in legal department strategy.

Looking Ahead

As AI becomes increasingly integrated into legal operations, upskilling in-house teams will be crucial to maximize its benefits. The focus must shift from simply measuring efficiency to demonstrating the broader value AI brings to the organization, positioning the legal department as a strategic partner rather than a cost center.