CLOC: In-house teams grapple with AI usage gaps amid budget scrutiny
CLOC Global Institute spotlights the gap between AI tool purchases and lawyer usage in legal departments.
Why it matters: Understanding the mismatch between AI investment and adoption helps legal ops leaders avoid wasted spend and improve department efficiency. With tight budgets, demonstrating ROI and user engagement is critical for future technology funding.
- At the 2026 CLOC Global Institute, leaders warned of underused AI licenses in-house.
- 52% of legal teams are using or evaluating AI for contract review, up sharply since 2024.
- 96% of in-house teams have adopted AI in some way, but only 31% at scale.
- Legal departments with dedicated AI oversight rose to 85%, showing a shift toward governance.
Corporate legal departments are under pressure to do more with less, pushing many to invest in artificial intelligence—but sessions at the 2026 CLOC Global Institute revealed a sticking point: many AI tools go underused by lawyers despite company-wide purchases.
- Adoption outpaces engagement: According to the Axiom 2026 GC Report, 96% of in-house teams use AI in some form, but only 31% have achieved scale across their operations.
- "Legal AI has become common in-house, and the ROI is clear. Now, teams are deciding how to expand it across even more work," said Daniel Lewis, Global CEO of LegalOn Technologies.
- Contract review is a leading use case, with active AI adoption for this function nearly quadrupling since 2024, per a LegalOn and In-House Connect survey.
- Dedicated AI oversight or resources now exist at 85% of legal departments, a jump reflecting a shift toward enterprise-level governance, the 2026 CLOC State of the Industry Report found.
Budget pressures are driving adoption. CLOC President & CEO Oyango Snell says, "This data confirms that legal departments are operating under fundamentally different economic constraints than in prior years." Only 37% of legal departments expect to grow their outside counsel spend—down sharply from 58% last year—forcing a focus on internal efficiencies and data-driven investment decisions.
Lauren Chung, Strategy + Transformation lead at Harbor, calls this a "deeper transformation," rooted in "intentional design, data-driven decision-making, and long-term capability building." However, the gap between licensing AI and achieving widespread lawyer adoption remains an operational hurdle for legal teams seeking to realize the full strategic impact of technology spend.
By the numbers:
- 52% — in-house legal teams using or evaluating AI for contract review
- 96% — in-house teams have adopted AI in some capacity
- 31% — in-house teams with AI implemented at scale
- 85% — departments with dedicated AI oversight or resources
- 37% — legal departments expecting to increase outside counsel spend, down from 58%
Yes, but: Specific reasons for the gap between AI license purchases and lawyer usage remain unclear, complicating efforts to boost adoption.