Harbor 2025 Law Department Survey Highlights Increased AI Adoption and Decreased Outside Counsel Costs
In a landscape marked by economic pressures and expanding workloads, the 2025 Harbor Law Department Survey, conducted with the Corporate Legal Operations Consortium (CLOC), reveals a significant uptick in artificial intelligence (AI) utilization within corporate legal departments, along with a notable decline in spending on outside counsel. This comprehensive survey, which surveyed 135 corporate legal departments across diverse industries with a median revenue of $13 billion, indicates a strategic shift towards operational efficiency and the integration of advanced technologies.
According to the survey’s findings, 85% of responding legal departments now have dedicated resources or committees overseeing AI initiatives, moving beyond initial exploration to active implementation of productivity-enhancing tools such as legal research aids and contract management systems. Lauren Chung, Practice Group Lead at Harbor, emphasizes this transformation, stating, “Legal functions are becoming increasingly intentional and data-driven, marking a move towards structured operational strategies.”
Key insights from the survey include:
– Legal departments are prioritizing technology strategies (80%), financial management (72%), and outside counsel/vendor management (62%).
– Expectations for inside legal spending have dropped, with only 47% of departments anticipating increases, a decline from 65% the previous year.
– Outside counsel costs are also expected to decrease, shifting from 58% projecting increases last year to 37% this year.
– There’s a significant increase in the use of alternative fee arrangements, rising to 76%, and 61% of departments are implementing convergence strategies to manage preferred providers.
As these trends unfold, 2026 promises further insights, with the upcoming CLOC State of the Industry Report set to release in February, setting the stage for legal teams to navigate evolving operational landscapes. For ongoing developments, Harbor will also host a webinar on December 10, providing a detailed discussion of the survey results.
This survey accentuates the growing role of AI in transforming legal operations and underscores a collective movement towards enhanced operational excellence and cost efficiency in the legal sector.
