In-house legal departments are on the brink of significant transformation over the next 1-3 years. As technology continues to evolve, these departments must adapt to remain competitive and meet the growing demands of their organisations. This blog explores the anticipated changes, focusing on technology adoption, skill development, and strategic innovation, supported by insights from industry experts and recent survey data.
The integration of technology, particularly AI, is set to revolutionise in-house legal departments. According to a January 2025 ³ÉÈËÓ°Òô survey, only 13% of in-house lawyers believe their legal department is fast or very fast at implementing new technology. However, the demand for AI-powered innovation is accelerating, with 65% of lawyers expecting technology skills to become crucial in the next 1-3 years. Budgets are expected to increase to cater to tech innovations, with 51% believing this to be the case.
Upskilling is becoming increasingly important for in-house legal teams. With 65% of in-house lawyers recognising the growing importance of technology skills, departments must focus on developing these competencies to stay relevant. The Group General Counsel at an asset-based lender in Bristol highlights the need for diversification: "We are in an era where traditional skills are unlikely to last you for a whole career and people will have to focus on diversifying their skillset to remain relevant."
Those that fail to invest in AI face a bitter reality. A significant portion of in-house lawyers, 19%, would consider leaving if their department didn't invest in AI.
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In-house legal departments face challenges in responding to change, with two-thirds of professionals rating their department as adequate, slow, or very slow in this area. Nick West, Chief Strategy Officer at Mishcon de Reya, suggests aligning innovation activities with business goals: "One legal department's priority might be trying to drive productivity improvements into a high-volume contracting process, whilst another's might be creating a better 'legal front door' due to an overwhelming number of requests."
Almost half (44%) of in-house lawyers said legal ops will continue to become more and more important. Tony Randle, Partner, Client Tech & Service Improvement at Shoosmiths, advises prioritising immediate value: "Mapping out the areas that are going to have the biggest positive impact across legal team is the first step." Identifying areas where change will deliver the greatest commercial reward is essential for success.
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This change will also take place in private practice, which could help streamline work for legal departments. Simmons & Simmons' Chief Operating Officer, Darren Mitchell says legal operations is quickly becoming accepted within law firms.
"Legal operations can drive change in the practice, including ensuring more efficient workflow, better alignment of technology to delivery higher quality, more efficient client outputs and deliver more robust pricing decisions."
In-house legal departments are at a crossroads, where embracing technology and innovation is vital for future success. By focusing on technology adoption, skill development, and strategic alignment with business goals, these departments can secure a competitive edge in the evolving legal landscape. The next few years will be pivotal in shaping the future of in-house legal teams, and those who navigate these changes strategically will thrive.
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