#Axiom #Legal AI #In-House Legal

The Current State of Legal AI

In-house legal teams are increasingly turning to artificial intelligence (AI) to improve efficiency and productivity. A recent study by Axiom reveals a stark reality: while every legal team using AI intends to boost their spending next year, a staggering 83% of these teams cannot definitively say if their investments from the previous year yielded positive results. Alarmingly, only 7% have progressed beyond initial trials, moving into the actual utilization and measurement of AI across their operations. This raises the question: why are so many legal departments stuck at the starting gate of AI integration?

Insights from Axiom's Report

The insights derive from Axiom's 2026 In-House Legal AI Report, which surveyed 528 legal leaders globally, including prominent figures such as Chief Legal Officers (CLOs) and General Counsel (GCs). The report unveils that many legal teams remain dependent on general-purpose AI tools not designed specifically for legal work. This oversight stems from a lack of structured implementation and governance in how these tools are deployed.

According to the report, while spending on AI is on the rise, merely increasing your budget does little to close the execution gap. The underlying challenge lies in the operational habits of legal teams. Those that succeed in reaping the benefits of AI are not necessarily those with the largest budgets but rather those who have adopted disciplined approaches to implementation. They focus on accountability, training, and ownership of AI initiatives.

The Four Realities Facing Legal Teams

The Axiom report outlines four critical realities that define the status quo for most legal departments today:

1. Spending does not equal success: Increased investment has not closed the gap in AI execution. Teams that excel have established structured governance, ensuring that someone is accountable for AI initiatives and that results are periodically assessed before scaling.

2. AI tool selection issues: In many organizations, decisions regarding which AI tools are utilized by legal teams are often made by individuals outside the department. This disconnect creates significant challenges for GCs, who bear ultimate responsibility for outcomes.

3. Default configurations used: Two-thirds of legal teams operate AI tools in their default settings. Common tools like ChatGPT and Microsoft Copilot are not tailored for legal use, and as a result, many teams fail to optimize their capabilities to address specific legal tasks effectively.

4. Narrow ROI realization: While AI does deliver return on investment (ROI), it is primarily limited to high-volume tasks such as legal research, contract review, and document summarization. Surprisingly, the anticipated cost reductions in fees from outside counsel, as firms adopt AI, have not been realized as expected - with many legal teams yet to see significant decreases.

Key Practices for Success

Axiom's report identifies five effective practices utilized by legal teams that have successfully integrated AI:

• - Invest in training: Continuous education is paramount. Legal departments must view training not as a one-off event but an ongoing investment in their team’s development.
• - Start small with structured pilots: Effective AI integration should start with manageable projects that are limited in scope, allowing for focused evaluation and measurement.
• - Establish governance early: Setting clear policies and guidelines for AI deployment should precede actual use to mitigate risks and ensure effective implementation.
• - Identify measurable outcomes: AI initiatives should be linked to specific legal outcomes, as general satisfaction scores do not provide true measures of success.
• - Leverage partnerships: Collaboration with experienced partners or power users can provide crucial insights and guidance, making the transition smoother and more effective.

The Road Ahead

As legal departments continue to grapple with the complexities associated with AI adoption, the emphasis must shift towards disciplined implementation and structured governance. According to Axiom’s Chief Legal AI and Talent Officer Sara Morgan,