Legal departments are caught in a paradox: most believe artificial intelligence will transform their work within five years, yet fewer than half have actually started using it. A new study from Thomson Reuters reveals a striking disconnect between AI expectations and real-world adoption in corporate legal teams, even as other business functions race ahead with technology integration.

Why Are Legal Departments Lagging Behind Other Business Functions?

The numbers paint a sobering picture. While 87% of legal professionals expect generative AI to become central to their workflow within five years, only 40% of organizations are currently using it. This gap isn't unique to legal; it reflects a broader pattern where legal and finance departments consistently lag behind other corporate functions in adopting new technologies.

One Swedish corporate general counsel captured the frustration in the research: "All other departments of a corporation develop and become more modern while the legal and finance departments are always stuck in the past. We cannot keep up with the modern-day corporations' demands unless we also develop and adapt our way of working". This sentiment underscores a critical business reality: legal departments face mounting pressure to deliver more value with fewer resources, yet they're moving slower than the rest of the organization.

Among organizations that have adopted AI tools, adoption is actually quite active. More than 80% of legal professionals using these tools report using them at least weekly. The most common applications include legal research at 80%, document review at 74%, and document summarization at 73%. The problem isn't that AI doesn't work in legal contexts; it's that the adoption process itself has stalled for most organizations.

What's the Biggest Blind Spot in Legal AI Strategy?

Perhaps the most concerning finding in the research is how few legal departments are actually measuring whether their AI investments pay off. Only 18% of respondents say their organizations collect metrics around AI return on investment. Even more troubling, 82% of legal departments either don't measure AI's ROI or aren't sure if they do.

This measurement gap creates a dangerous strategic blind spot. Without clear metrics, legal leaders cannot make informed decisions about where to invest, how to justify budget requests, or whether their AI initiatives are actually delivering value. Among organizations that do measure AI impact, most focus on easily quantifiable internal metrics like cost savings and employee usage rather than business-focused outcomes such as client satisfaction or new business generation.

The real value of AI in legal work often lies in harder-to-measure areas: better research quality, more comprehensive analysis, reduced risk exposure, and improved client service. Yet without systematic measurement frameworks, these benefits remain invisible to business stakeholders and decision-makers.

How to Build a Strategic AI Approach for Legal Departments

• Establish Clear Metrics: Move beyond ad hoc experimentation by defining what success looks like before implementing AI tools. Organizations with formal AI strategies are more than three times more likely to realize positive ROI compared to those without strategic approaches.
• Align with Outside Counsel: Create clear guidelines and expectations for AI use with external law firms. Currently, 54% of corporate legal respondents believe their outside firms should use AI, yet less than 20% are actually mandating its use through guidelines or RFPs.
• Shift from Efficiency to Transformation: Use AI to elevate the strategic value legal departments provide to their organizations, freeing up time from routine tasks to focus on high-impact legal counsel and business partnership rather than simply automating existing work.

A US corporate chief legal officer noted the tension around outside counsel adoption: "Firms are reluctant; they claim it would compromise quality and fidelity. I think they are threatened by it. The quality still needs to be checked, and the human beings should still be responsible for the quality just as any junior associate work would need to be carefully reviewed by someone more experienced. But they should use it". This dynamic creates confusion, with 40% of law firm professionals reporting they receive conflicting direction from different clients, some wanting AI use and others explicitly prohibiting it.

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What's Next: Agentic AI and Beyond

While most legal departments are still figuring out basic generative AI applications, a new wave of technology is already emerging. Agentic AI systems can autonomously complete multi-step tasks with minimal human oversight, moving beyond simple question-and-answer interactions to actually finishing complex workflows.

Currently, only 15% of legal organizations use agentic AI tools, but an additional 53% are in planning or consideration phases. An Australian corporate CFO explained the opportunity: "Agentic AI models represent a great opportunity to automate work, improve accuracy, and do more with less. There are risks of misuse or misunderstanding, but I feel like CFOs must have felt in the '60s when computer-based accounting was introduced".

The window for casual AI experimentation is closing. Legal departments need to move from asking "Should we use AI?" to "How do we use AI strategically?" This shift requires honest assessment of current capabilities, clear goal-setting for AI initiatives, and systematic measurement of results. The organizations that make this transition successfully won't just keep pace with business demands; they'll help define what the future of corporate legal work looks like.