Generative AI is set to reshape the future of legal departments, not just by introducing new tools, but by fundamentally shifting how legal work is structured and delivered. A recent survey reveals that 46% of respondents expect their legal departments to remain the same size, but with significant changes in composition, seniority, and skills. AI will empower business self-service and automation, freeing up in-house legal teams to focus on high-value, strategic work without expanding headcount. This transition allows legal teams to meet growing business demands, with a projected cost efficiency improvement of 20-30%.

Furthermore, the reliance on Alternative Legal Service Providers (ALSPs) and shared service capabilities is expected to rise. These providers, especially early adopters of AI, can offer in-house teams more efficient solutions for routine tasks, reducing dependence on external counsel. This shift also opens up opportunities for operational, technological, and change management skills to play a more prominent role. Lawyers will need to develop new competencies, including working with AI systems and gaining insights from legal data, while departments will require new specialists in areas such as prompt engineering and AI-driven legal operations.

Overall, this AI-driven evolution promises to create a more agile, strategic, and tech-enabled legal ecosystem. In-house lawyers will be positioned to drive business growth, provide richer data insights, and lead more effectively. The future of legal departments is not just about doing more with less—it’s about doing better, faster, and smarter with the aid of technology.