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.
Economic
uncertainty
probably
accounts
for
some
of
the
depressed
spending,
but
the
dropoff
is
too
significant
to
fully
blame
on
tariffs
and
federal
mismanagement.
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.”
In
legal,
that
trend
will
last
a
year
or
so
and
then
clients
start
ticking
up
outside
spend
again.
The
difference
this
time
is
scale.
Almost
two-thirds
of
legal
departments
reported
intentionally
bringing
more
work
inside
over
the
past
two
years.
Which
just
so
happens
to
coincide
with
the
two
years
where
the
conversation
around
AI
leapt
from
nerdy
diversion
to
magic
productivity
box.
According
to
the
survey,
law
departments
embraced
the
change,
with
85
percent
indicating
that
they
have
dedicated
resources
to
managing
AI
initiatives,
with
live
or
piloting
solutions
for
general
productivity
(74%),
summarization
(56%),
legal
research
(54%),
content
creation
(54%),
and
contract
intelligence
(49%).
Beyond
reducing
outside
workload,
this
DIY
spirit
enables
a
reboot
of
the
whole
outside
counsel
relationship.
The
billable
hour
continues
to
cling
to
life
like
a
Boomer
clings
to
a
multimillion
dollar
property
they
bought
for
$15K
in
the
70s,
but
time
is
starting
to
chip
away
at
its
tenacity.
As
AI
transfers
more
leverage
to
clients,
law
departments
are
negotiating
more
budget
projection-friendly
alternative
fee
arrangements.
Over
three-quarters
of
respondents
now
use
AFAs.
Some
69
percent
have
convergence
or
preferred
provider
panels,
a
jump
from
50
percent,
reflecting
a
shift
toward
deeper
and
more
easily
managed
client
relationships.
“Departments
are
shifting
from
reactive
cost-containment
to
structured
operational
strategies
—
optimizing
outside
counsel,
implementing
workflow
technologies,
and
building
robust
AI
governance,”
said
Lauren
Chung,
survey
editor
and
Practice
Group
Lead,
Strategy
+
Transformation
at
Harbor.
“The
emphasis
on
legal
operations
and
technology
strategy
underscores
that
transformation
is
now
a
defining
capability
of
leading
corporate
law
departments.”
Which
is
consultant-speak
for
“clients
now
have
the
tools
to
actually
enforce
accountability.”
Partner
wants
to
push
back
on
fixed
fees?
Fine,
we’ll
keep
it
in-house.
Firm
balking
at
joining
the
preferred
panel
on
your
terms?
Plenty
of
other
firms
will
jump
at
becoming
one
of
our
go-to
firms.
That
5%
rate
increase
you
want?
Let
me
check
what
our
AI
budget
could
do
with
that
money
instead.
Now,
these
legal
departments
need
to
maintain
a
clear-eyed
assessment
of
their
AI-fueled
capabilities.
The
appointed
prophets
of
AI
swear
that
there’s
no
task
that
their
miracle
devices
can’t
tackle
while
we
sit
back
and
count
the
sanctions.
Playing
hardball
with
the
professionals
is
a
lot
easier
before
you’ve
accidentally
flooded
the
basement.
“Legal
leaders
are
no
longer
simply
exploring
AI,
they’re
deploying
it
to
unlock
productivity,
accelerate
legal
research,
and
enhance
content
and
contract
workflows,”
said
Jaime
Woltjen,
Senior
Director
of
Strategy
+
Transformation
at
Harbor.
“At
the
same
time,
departments
are
thoughtfully
building
governance
frameworks
to
ensure
responsible
and
secure
use.”
Much
of
that
task
is
falling
on
the
Legal
Ops
professionals,
who
reported
their
three
top
priorities
over
the
next
year
as
technology
strategy
(80%),
financial
management
(72%),
and
outside
counsel
management
(62%).
Notice
how
neatly
those
priorities
align.
A
technology
strategy
to
improve
financials
and
build
leverage
over
outside
counsel.
Quite
the
battle
plan
for
the
Legal
Ops
warriors.
While
Biglaw
continues
charting
its
own
AI
adoption,
it
needs
to
keep
an
eye
on
the
clients,
because
rate
increases
are
going
to
get
a
lot
harder
to
sell
when
the
client
has
the
same
power
tools.
Joe
Patrice is
a
senior
editor
at
Above
the
Law
and
co-host
of
Thinking
Like
A
Lawyer.
Feel
free
to email
any
tips,
questions,
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