Adapting to Change: Implementing AI in Law Firms and Departments

In an era marked by rapid geopolitical shifts, technological advancements, and evolving regulatory landscapes, legal departments face increasing pressure to adapt and innovate. The 2025 EY Law General Counsel Study surveyed 1,000 General Counsel and Chief Legal Officers across 21 countries. The findings offer valuable insights on how legal departments can navigate these pressing challenges.

Key Disruptive Forces

The study identifies several external factors compelling legal departments to evolve:

• Geopolitical Influence: 76% of legal departments see geopolitical events as a significant challenge. This influence complicates their operations and requires them to stay informed.

• Regulatory Pressures: 75% cite the regulatory environment as a primary concern. Keeping up with regulations demands constant vigilance.

  
  

• Technological Advancements: 74% grapple with rapid tech changes, including the rise of generative AI. This innovation brings both opportunities and risks that must be managed effectively.

  
  

These forces necessitate a proactive approach to anticipate changes, operate efficiently, and handle complex matters with agility.

Internal Challenges

While external pressures mount, internal constraints hinder progress:

• Budget Constraints: 83% anticipate budget increases. Yet, 87% prioritize cost reduction, creating a paradox. Balancing budget concerns with operational needs is critical.

  
  

• Sourcing and Technology Strategies: Limited budgets challenge 61% in sourcing and 65% in developing technology strategies. These limitations can stall innovation.

  
  

Addressing Internal Challenges

It's essential that legal departments find solutions to these internal challenges. This can involve:

• Streamlining Processes: Reviewing existing workflows to identify inefficiencies can lead to significant cost savings.

  
  

• Investing in Training: Ensuring staff are well-trained in the latest technology can improve productivity and job satisfaction.

  
  

• Leveraging Partnerships: Collaborating with vendors or other legal entities can enhance capabilities without straining budgets.

  
  

Strategic Responses

To address these broad challenges, legal departments are adopting several key strategies:

• Diversified Sourcing: By combining internal and external resources, firms can enhance efficiency and access specialized expertise.

  
  

• Technology and Data Strategy: 75% are refining their tech and data approaches, focusing on organizing data and integrating platforms effectively. Well-structured data aids in better decision-making.

  
  

• Generative AI: A notable 25% are prioritizing the use of GenAI for tasks like contract drafting and legal research. This innovative approach can reduce time spent on mundane tasks and allow legal professionals to focus on strategic initiatives.

  
  

Exploring Generative AI

Generative AI is revolutionizing the legal field. By automating routine tasks, legal professionals can redirect their focus to more complex matters. The technology also assists in analyzing vast amounts of data quickly. This efficiency contributes to better case outcomes and improved service quality.

The Path Forward

Legal departments must balance the adoption of innovative technologies with prudent risk management.

• Risk Management: The integration of new tools should come alongside robust risk assessment practices. Understanding potential pitfalls is crucial for sustainable growth.

  
  

• Aligning Strategies: By aligning sourcing, talent, spending, and technology strategies, departments can better manage risks. This alignment supports business priorities with both foresight and agility.

  
  

• Building a Culture of Innovation: Encouraging a culture that embraces change and innovation can position legal departments for long-term success.

  
  

For a deeper dive into the study, visit the full article: EY Insights

Conclusion

The landscape for legal departments is shifting rapidly. By understanding the key disruptive forces, addressing internal challenges, and implementing strategic responses, departments can position themselves for future success. Embracing generative AI and other technologies will be essential in navigating this evolving environment. Adaptation combined with strategic foresight will lead to enhanced efficiency and effectiveness in the legal sector.

In conclusion, the journey toward innovation is ongoing. Legal departments must stay informed, agile, and willing to embrace change for a successful future.