Hi there,
According to Axiom’s latest survey of 200 GCs (half from organizations with budgets above $1 billion), 55% of GCs said their budgets increased in 2024; 61% expect this trend to continue into 2025.
Unsurprisingly, one of the top areas in which GCs are focusing their plussed-up budgets is legal technology, alongside legal operations.
This is where I think some in-house organizations are in for a reckoning over the coming months. 😳
There isn’t a single enterprise legal leader I’ve spoken with in recent months who isn’t feeling pressure to do more with less — and to leverage GenAI to do it.
Yet I also hear legal leaders tell me:
⛔ “We want to proceed cautiously with our technology investments until we better understand what the regulatory landscape will look like.”
⛔ “We’re looking to the broader business to bring us along with our company-wide plan for AI investments.”
⛔ “We’ve not pressured our firms on their AI usage; they are navigating complex issues with client confidentiality and an uncertain regulatory scheme.”
I get it.
It’s tempting to want to play it safe.
And there is no standard playbook for how the most risk-conscious function in an organization should approach the GenAI challenge.
But GCs, the business is watching. 👀
In my many conversations with enterprise GCs, I know that in-house teams struggle with legal’s legacy of being the department of “No.” 🙅🏽♂️
The most important thing in-house teams can do to change this perception — and unlock their potential to be a proactive and strategic partner to the business — is to take control of their GC narrative.
Right now, I can’t think of a better way to do this than in your approach to your team’s technology investments and how you advise the business in the same.
What story will you tell about how you used that extra 5-10% of budget in 2025?
Last Thursday, I was privileged to sit alongside Moderna CLO Shannon Thyme Klinger at the Economist’s New York GC Summit.
We talked about how GCs are approaching AI to innovate and redefine their function’s relationship with the C-suite.
Here are three practical takeaways from our discussion that even the most risk-conscious teams can use right now to take control of their GC narrative.
1. Execute on low-risk, “low-hanging fruit” use cases.
There are plenty of compelling use cases that don’t involve significant risk, for example, by using client or consumer data.
Shannon shared how her team has created self-serve policy bots for queries that were previously directed to her in-house team.
These bots crawl their internal policy framework to answer questions in seconds and then link to the internal process that they've automated to create a full self-service model that can be executed by the business and with the business.
Her team has done the same thing with confidentiality agreements and non-disclosure agreements. This frees up her team’s resources to show up more strategically and broadly across the business.
2. Internalize more work to realise more value from your firms' expertise.
In another example, Shannon shared how her team is utilizing another GPT to crawl their competitors' SEC filings to assist in drafting M&A and licensing templates.
In just a single year, her team has saved $5M in legal spend because they’ve been able to internalize more of this work and then ask smarter and more pointed questions back to their law firms (at a fraction of the billable hours they would have used in the past).
3. Look for opportunities to improve the operation of how legal advice gets delivered to the business.
GenAI will soon be instrumental, not only in how we deliver substantive legal advice, but in the very operation of how that advice is delivered.
Axiom’s budgeting survey points to GCs increasing spend on flexible legal talent and ALSPs, while at the same time decreasing their law firm spend.
For most in-house teams, outside counsel comprises an average (whopping) 50% of total legal costs to the business!
How are you using GenAI to query your existing data on how you engage your law firms to answer questions like:
✔️ What type of legal service provider — firms, ALSPs, and flexible legal talent — is best placed to handle a particular matter given the relative risk and need for specific expertise?
✔️ Which panel firms should we invite to participate in an RFP on this matter?
✔️ Are there firms we aren’t aware of that are better placed to handle a certain portfolio of matters?
✔️ What kind of fee arrangement is the best outcome-driven approach for this specific matter?
With the right data 📊 on how they are engaging with firms and other legal service providers, in-house teams can use GenAI 🤖 to get much more value for their outside counsel spend 💰 — and tell a very powerful story 📖 to the business about how they’re doing it.
If Axiom’s survey is on point, the outlook for overworked and underresourced legal teams looks cautiously hopeful in 2025.
The question is will legal teams take control of this opportunity to convince the business that their investment in legal is a winning bet? 🏆
Cheers,
Jim
