Biglaw's Worst Enemy Isn't AI, It's Clients Using AI to Stop Paying Them - Above the Law

"Corporate law departments have embraced their inner-DIY urge. Thankfully, instead of attempting to gut their kitchens after binging HGTV, these lawyers have channeled this into doing more and more of their own legal work and using their newfound independence to overhaul their outside counsel relationships. And, as one might suspect for a story in 2025, AI is involved. The 2025 Harbor Law Department Survey, conducted in collaboration with CLOC, dropped this morning."

"Pulling insights from 135 corporate law departments representing companies with a median revenue of $13 billion, the survey indicates a power shift underway with GCs capturing the upper hand. Biglaw isn't going out of business any time soon, but 58 percent of surveyed legal departments expected to increase their outside counsel spend last year. This year, only 37 percent project sending more money to the firms."

"GCs keep bringing work in-house. In itself, this isn't unprecedented. Much like those HGTV viewers, every few years a bunch of in-house lawyers get convinced that they can save some money handling the work of outside professionals. Whether it's the Property Brothers replacing a load-bearing wall or Cravath drafting a cease and desist, there will be someone out there to confidently declare, "I'm pretty sure I could do that.""

Corporate law departments increasingly internalize legal work, with almost two-thirds reporting they intentionally brought more matters in-house over the past two years. A survey of 135 corporate legal departments (median company revenue $13 billion) shows a power shift toward general counsel and reduced reliance on outside firms: 58 percent expected to increase outside-counsel spend last year, while only 37 percent project higher spend this year. Economic uncertainty contributes but does not fully explain the decline. Legal teams also invested in technology: 85 percent reported dedicated resources for AI and automation, enabling greater in-house capacity and altered outside-counsel relationships.

Read at Above the Law