In-House Lawyers Embrace GenAI, but Few Know If Outside Counsel Do

Adoption doubles, savings begin to appear

Everlaw's corporate in-house report surveyed 657 in-house legal professionals across 30 countries and was co-developed with the ACC. According to the report, GenAI adoption rose to 52%, more than double the level of the previous year.

Part one of the survey, Generative AI's Growing Strategic Value for Corporate Law Departments, found that GenAI helps legal professionals work faster, communicate more effectively and deliver better client service. One-third of in-house teams already see measurable cost savings. Part two, The Role of GenAI in Proving Corporate Law Department Value, looked at how the technology helps teams show business value and move from being seen as a cost center to a business driver. The leading benefit was faster legal support and matter resolution.

Both parts drew coverage from more than two dozen publications, according to Everlaw, including Bloomberg Law, Law.com, Law360, Canadian Lawyer and The National Law Journal.

Metrics and transparency fall behind

Teams are not yet good at measuring what GenAI delivers. Law.com's LegalTech News cited the survey finding that only 28% of respondents track time to resolution for legal matters, 12% track outside counsel performance metrics, and 12% track return on investment from technology adoption. Everlaw's Chuck Kellner said the metrics will take longer to catch up "just because it's been so short of time that we've had to actually operate these tools."

The larger gap concerns outside counsel. Above the Law reported that 59% of in-house professionals do not know whether their law firms use GenAI on their matters, and 80% are not requiring or encouraging outside counsel to use it. Of those whose firms do use GenAI, 59% have seen no noticeable change in billing. Law360 reported the same 59% figure for respondents who have not yet seen noticeable savings.

Writing for ACC Docket, Blake E. Garcia and Mauro Whiteman named three risks: value blindness, pricing assumptions and a trust deficit. They concluded that for a profession built on fiduciary duty and client confidence, the lack of transparency "is not sustainable."

In-house teams hold the leverage

Coverage suggested that corporate legal departments have the stronger negotiating position. Law360 highlighted the finding that nearly two-thirds of in-house teams say GenAI will let them rely less on outside counsel. ACC President and CEO Veta Richardson told Bloomberg Law that corporate teams, not outside firms, will drive the shift in legal pricing, and that "Clients have a lot more options now."

Everlaw CLO Gloria Lee told Law.com that many teams are still writing their own GenAI policies, so they "may be reluctant to dictate how outside counsel should use it." Lee also told Law360 that "One thing every general counsel says about their outside counsel is they want greater value."

The billable hour under pressure

The survey found that only 13% of corporate teams said GenAI was leading outside firms to bill fewer hours, and only 20% saw faster turnaround. GeekLawBlog's Greg Lambert wrote that the time-based business model is "deeply embedded." Weston Wicks of Gartner's legal and compliance team told Bloomberg Law that law firms do not know how to charge for AI tools, and clients do not know how to ask for fee reductions because of them.

The takeaway from the coverage is that the first step for corporate leaders is to understand where outside firms apply the technology and how much it improves outcomes. From there, they can pursue different pricing structures or bring more work in-house. The effect on the billable hour is expected to play out over the longer term.