Report: Most Companies Skimp on AI Risk Checks, GCs Say
A June 2024 Diligent Institute report reveals 70% of GCs say AI risks are under-assessed.
Why it matters: Without proper AI risk evaluations, legal departments risk legal action, regulatory fines, and data breaches. As General Counsels face rising demands for compliance, AI-related litigation is projected to surge—making robust risk processes and governance frameworks mission-critical.
- 67% of General Counsels report higher risk/compliance workload versus last year (Diligent, June 2024).
- Gartner projects over 2,000 AI-related legal claims globally by 2026.
- 52% of in-house teams now use or pilot AI for contract review (LegalOn/In-House Connect, 2024).
- 79% of legal teams using AI report faster routine task completion (LegalOn, 2024).
Most companies aren’t evaluating artificial intelligence risks thoroughly before deployment, according to the 2024 Diligent Institute General Counsel Risk Index (published June 2024). The survey of 400+ global GCs found 70% perceive a lack of comprehensive AI risk assessment across their organizations.
- Over two-thirds (67%) of GCs say their risk and compliance workload has increased year-over-year, with 40% now spending almost half their time on these issues, per Diligent.
- According to Gartner’s March 2024 forecast, AI-related legal claims could top 2,000 worldwide by 2026 as incidents and regulatory scrutiny rise. The risk extends from IP disputes to data privacy violations and algorithmic discrimination (Gartner).
- Gartner’s Alissa Lugo warns that as insurers add AI exclusions, companies face heightened financial and legal exposure in the wake of algorithmic errors or failures.
- Adoption is rising: 52% of in-house legal teams are piloting or using AI for contract review, up from 13% in 2023, per the 2026 State of AI for In-House Legal report (LegalOn/In-House Connect, March 2024).
Despite increased adoption, nearly half of GCs (48%) report “no measurable efficiency gains” from AI in the past six months—often citing poor governance, unclear metrics, and lack of embedded tools, Dottie Schindlinger of the Diligent Institute notes.
Yet, for those with active deployments, efficiency is tangible: 79% of legal teams using AI shave time off routine tasks, and 67% say they respond faster to business needs (LegalOn).
Regulators are watching, with forthcoming EU AI Act implementation and U.S. FTC enforcement setting strong new standards in 2024 and beyond. For legal professionals, actionable risk frameworks and transparent governance are becoming baseline expectations—not optional extras.
By the numbers:
- 67% — GCs reporting greater risk/compliance workload year-over-year (Diligent, 2024)
- 2,000+ — Projected AI legal claims worldwide by 2026 (Gartner, 2024)
- 79% — Legal teams using AI saving time on routine tasks (LegalOn, 2024)
Yes, but: Some legal teams cite slow AI tool integration and lack of clear ROI as barriers to measurable gains.
What's next: Legal teams anticipate more formalized AI risk governance as the EU AI Act rolls out in late 2024.