According to a recent survey, artificial intelligence gained a significant foothold in corporate legal departments in 2025, where it is being used mostly for contract drafting and review, legal research, and document translation.
The survey, AI in Legal Departments: 2025 Benchmarking Report, published by Spellbook, a provider of AI-powered contract review software, indicates that 38% of corporate legal departments already use artificial intelligence tools on a daily basis. Another 50% of survey respondents are considering the use of AI in their operations. Future uses planned for AI adoption are workflow automation, AI agents, and regulatory compliance.
So far, AI adoption has been strongest in automating basic legal work such as contract drafting and legal research. However, AI is expected to gain traction throughout the practice of law and in the management of law firms – in automation of legal services delivery, in the supervision of litigation, and in the selection and retention of outside law firms.
The views of corporate legal department leaders matter. As sophisticated consumers of legal services who report to executive teams and boards of directors, they have traditionally exerted a powerful influence on the operations of large law firms. Among this group, increased efficiency (83%) is the main benefit identified in the survey, along with faster turnaround times and improved work quality. Sixty-three percent of corporate legal department leaders expect cost savings if their outside counsel uses artificial intelligence. Just 9% said they prefer outside counsel to not use artificial intelligence in their representation. ### Use Cases for AI in Corporate Legal
So far, AI adoption has been strongest in automating basic legal work such as contract drafting and legal research. However, AI is expected to gain traction throughout the practice of law and in the management of law firms – in automation of legal services delivery, in the supervision of litigation, and in the selection and retention of outside law firms. Along with everyone else, corporate leaders are aware of reports that artificial intelligence will transform the practice of law, and they are reportedly eager to have meaningful discussions with their in-house legal leadership about ways that AI can be deployed for efficiencies and cost savings.
Today, corporate legal departments are not spending significant amounts of money on artificial intelligence solutions. While some (3%) legal departments reported spending in excess of $20,000 per month, the largest group by percentage (26%) said they spend less than $100 per month on artificial intelligence.
The following list suggests several ways corporate legal departments might soon be using artificial intelligence (AI) to manage outside law firms:
- reviewing invoices for compliance with billing guidelines, flagging discrepancies, duplicate charges, or excessive billing
- analyzing historical data to compare law firm performance on metrics such as cost, outcomes, and efficiency
- predicting likely outcomes and cost of cases handled by different firms
- analyzing feedback from corporate officials about law firm performance, identifying strengths and areas for improvement
- reviewing engagement letters and contracts with outside counsel, ensuring consistency and risk mitigation
- analyzing legal spending by law firm, or matter, identifying trends and opportunities for cost savings
- recommending which law firms are best suited for specific matters based on expertise, past performance, and cost efficiency
- monitoring deadlines and deliverables in matters handled by outside counsel, sending reminders and escalating issues as needed
- automating document sharing between the in-house legal departments and outside law firms
It seems that every day brings another promising use case for artificial intelligence in the practice of law.
Lawyers Worry About Hallucinations, Client Confidentiality
So, what’s holding back wider adoption of artificial intelligence within corporate legal departments? Trust in what is still a nascent technology is a big factor, as are concerns about compromising client confidential information. Survey respondents reported the following top worries with artificial intelligence:
- Al-generated errors or hallucinations (78%)
- Data security and confidentiality risks (74%)
- Loss of human oversight in legal decisions (45%)
- Regulatory uncertainty (32%)
- Other (4%)
The consensus view among corporate legal leadership appears to be that artificial intelligence, while a powerful tool already with nearly unlimited promise in the future, will require considerable training and policy development to reach its potential. First, legal professionals must be properly trained to use artificial intelligence ethically and effectively. Second, artificial intelligence – particularly generative artificial intelligence – is still too prone to errors and ought not be used without close oversight. Third, and finally, many survey respondents believed that some form of clear and practical regulation of AI is necessary before it can be used ethically and responsibly for legal work.
Fortunately, across the country, within state supreme court workgroups and within state bar associations and the American Bar Association (via ABA Formal Opinion 512), this work is already well underway.
This article is the last in a series on artificial intelligence in litigation. Prior articles discussed predictive analytics, electronic discovery, and legal research.
