The gap between the adoption of artificial intelligence and the technology’s effective governance is widening, according to the Association of Corporate Counsel’s “The In-house Legal AI Landscape: Adoption, Governance, and the Future of Legal Talent” report.
Eighty-five percent of in-house legal departments are currently using AI, indicating that it is no longer an experimental tool and has become part of day-to-day work. However, 41 percent of legal departments do not audit for unauthorized or “shadow AI” use, while 39 percent do not formally monitor AI’s return on investment.
Many legal departments have not modernized recruitment, development, and performance practices to align with an AI-enabled workforce.
“The next phase of AI transformation isn’t really about technology. It’s about people. Legal departments that rethink training, career development, and talent pipelines now will be better positioned to realize AI’s benefits than those that treat AI solely as a software investment,” said Jason L. Brown, ACC’s president and CEO, in a statement. “The legal departments that lead in the years ahead won’t be the ones with the most AI tools. They’ll be the ones that bring technology, governance, measurement, and talent together into a single strategy.”
However, 73 percent of organizations delegate final AI approval powers to non-legal departments – typically the information technology department. Only 8 percent grant general counsel exclusive authority to greenlight enterprise AI tools.
In all legal workstreams examined in the study, fully autonomous AI execution was below 5 percent. AI use focused on high-volume, repetitive tasks like contract review, drafting, and regulatory monitoring; lawyers continue to tackle judgment-heavy work like litigation strategy, intellectual property matters, and outside counsel management.
“Adoption is no longer the question. In just two years, we’ve gone from AI being an emerging technology to it becoming a standard part of how legal departments operate,” Brown said. “The bigger challenge now is ensuring that governance, accountability, ROI measurement, and workforce planning evolve at the same pace as the technology itself.”
“The In-house Legal AI Landscape: Adoption, Governance, and the Future of Legal Talent” report consolidated responses from 576 in-house counsel and legal operations professionals globally. The survey was conducted from July 8 to 31.
The ACC also published the “The In-House Legal AI Landscape: Adoption, Governance, and the Future of Legal Talent—Europe Results” supplement.