Corporate Legal Departments Shift From Testing AI to Governing It

Corporate legal departments have crossed a threshold in their relationship with artificial intelligence. After decades of cautious technology adoption, general counsel are no longer evaluating whether to deploy AI tools — they are building governance frameworks for systems already making autonomous decisions in production environments.

According to a new report from FTI Consulting and Relativity based on interviews with 30 general counsel and a survey of 224 chief legal officers, generative AI adoption in corporate legal departments has nearly doubled year over year. Eighty-seven percent now report using AI within their teams, up from 44% in 2025. Legal departments with formalized technology roadmaps reached 53%, more than double the 25% reported the prior year.

Why it matters

The shift from experimentation to governance represents a fundamental change in how legal risk is managed. When AI agents can review contracts, monitor regulatory changes, and handle discovery without continuous human oversight, the accountability model changes. General counsel must now protect organizations from decisions made faster than any oversight loop can catch them — a challenge that requires new contractual protections and internal controls rather than just risk assessments.

AI Agents Enter Production at Major Firms

AI agents are now handling substantive legal work at major law firms and corporate legal departments. Microsoft's Legal Agent, which analyzes documents, drafts edits, and reviews contracts, represents the class of tools landing on general counsel desks. Harvey, an AI platform serving more than 700 customers across 58 countries, has been adopted by 70% of AmLaw 10 firms and nearly 50% of AmLaw 100 firms. The company raised $200 million at an $11 billion valuation in March 2026.

Harvey CEO Winston Weinberg told Bloomberg the company is building domain expertise in legal workflows rather than expanding into adjacent professional services. The platform covers contract analysis, due diligence, compliance monitoring, and litigation support, with models trained on legal materials at a depth general-purpose models cannot replicate. Harvey recently unveiled tools allowing law firms to build custom AI agents tailored to specific practice areas.

Contract Terms Become the Primary Control Mechanism

Reece Clark, a shareholder in Polsinelli's technology transactions practice, argues in Law.com that agentic AI has fundamentally shifted what general counsel are accountable for. In 2025, GCs evaluated AI tools for risk and return. In 2026, they are managing systems capable of independent decisions.

General counsel are responding through the contract itself. AI addenda in vendor agreements have become the primary tool for protecting organizations from AI vendor overreach, covering acts and omissions, violations of law, and liability questions that arise when an autonomous system makes a consequential mistake. Contracting for those protections is now a core competency for general counsel.

Common Use Cases Emerge

The most common AI applications in legal departments are document summarization at 83%, contract clause identification at 63%, e-discovery and document review, contract drafting, and first-pass review. "Generative AI has become a fixture in the majority of legal departments," said Sophie Ross, Global CEO of FTI Technology. David Horrigan, Discovery Counsel at Relativity, noted that general counsel use of generative AI has risen from 20% in 2023 to 87% today, marking what he called the end of the era of the Luddite Lawyer.

These findings were first reported by PYMNTS in its AI Watch coverage.