The 2025 EY Law General Counsel study, reported on Wednesday, documents how legal departments can innovate with confidence in an age of disruption. Oxford Economics conducted the survey on behalf of the EY Law business.
Among the more than 1,000 general counsel and chief legal officers who participated in the survey, over 70% listed geopolitics, the regulatory environment and technological advancements as the top three external challenges that legal departments face.
Generative AI, a type of AI capable of creating original content that became mainstream in late 2022, is still seldom adopted in legal departments. While over half of the respondents say their legal departments are still ideating or experimenting with generative AI, only 25% say it's a high priority for the legal team.
Most legal departments plan to use generative AI in the future, but few are using it right now. The most popular current use of generative AI in legal departments is for legal drafting, but only 34% of respondents are currently doing this. While regulatory compliance is itself a challenge, only one-fifth of respondents were using generative AI to help with this task.
"The rapid evolution of GenAI and agentic AI will be a big factor in shaping the legal department of tomorrow, and businesses should be working through how they will develop soft the skills and expertise required for today's talent to prepare for the future," Dan Hendy, EY's global legal transform and operate leader, said in a statement.
Data-related challenges seem to be a top culprit behind the slow adoption of advanced technology in legal departments. Over half of the respondents cited disorganized data or data in different locations as a factor, 44% said that legal and business platforms are disconnected and 41% said access to accurate data is limited.
Most teams also lack the right personnel on staff to fix data challenges. Fewer than one-third of legal teams have full-time, dedicated data scientists, product managers or business analysts.
While 83% of corporate legal leaders anticipate increased budgets over the next 12 months, 87% also said that cost reduction is a priority, meaning that adding new talent or new tech might take a backseat.
Few legal departments consider other metrics besides cost reduction and time savings for determining the return on investment from technology, which further limits what tech can be prioritized in budgets.
Planning for technology could be another challenge. Three-quarters of legal departments do annual planning, but most don't conduct deep assessments for prioritizing the most important challenges.
"To make better use of limited budgets, rather than going straight to the most leading-edge technology, legal departments should first develop a clear understanding of the business needs, problems and opportunities that require support," Hendy said in a statement. "By focusing on how they are setting their strategy, legal departments can then shape how to allocate budget, source work, engage talent and use technology to enable — rather than drive — change."
Among new technology capabilities in legal departments, automated invoice review tools are catching on the most widely, with 38% already implementing this technology. Over half of the respondents are in the process of implementing it or plan to do so in the next 12 months. Twenty-six percent have already completed implementing automated document generation, with another 62% saying the implementation is in progress or will happen in the next 12 months.
The respondents to the survey were from organizations with $1 billion or more in annual revenue. They belonged to 21 different sectors and 21 countries.
--Editing by Nicole Bleier.
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