The findings come from Axiom's 2026 In-House Legal AI Report: Legal AI Is Everywhere. Now Comes the Hard Part., a global study of 528 in-house legal leaders - including CLOs, GCs, DGCs, and legal ops leaders - across six countries, conducted by InsightDynamo and commissioned by Axiom. Seventy-seven percent of respondents represent companies with more than $1 billion in annual revenue. The full report breaks down findings by region, industry, company size, and legal team maturity. It also identifies five practices the most advanced legal departments use to close the AI execution gap and includes case studies showing what AI-enabled legal work looks like at scale.
"Legal AI is no longer a choice for in-house teams; it's become the baseline," said Sara Morgan, Chief Legal AI and Talent Officer at Axiom. "What stands out in this year's report is how few teams have actually gotten good at it. The teams pulling ahead aren't spending more than everyone else—they've simply stopped treating AI as a side project. There's clear ownership, real training, and someone accountable for the results before anything scales."
More spending hasn't closed the AI gap between legal teams. According to the report, four realities define where most in-house departments stand today:
- Spending more doesn't close the gap - discipline does. Every legal team using AI plans to spend more next year, and most still can't show what last year's spending bought them. The departments pulling ahead built structure instead: someone owns the program, pilots have defined goals, and results get reviewed before the program expands.
- In most legal departments, someone outside Legal picks the AI tools. At most companies, the call on which AI tools the legal department uses - and which pilots move forward - is made elsewhere in the organization. For GCs accountable for outcomes, that's a structural problem, not a software problem.
- Two-thirds of legal teams are running general-purpose AI in its default configuration. The three most widely used AI tools in legal - ChatGPT, Microsoft Copilot, and Google Gemini - were not built for legal work, and most teams haven't configured them to behave as if they were. Training hasn't kept pace either: most lawyers still aren't regularly using tools their own departments have already paid for.
- The payoff is real but narrow - and it isn't reaching outside counsel rates. AI is delivering ROI, but mainly in a handful of high-volume, document-heavy tasks: legal research, contract review, and document summarization. Meanwhile, the rate relief that many GCs expected once law firms adopted AI has mostly failed to materialize: 92% of in-house teams expect or are negotiating AI-related rate cuts from outside counsel. Few are getting them.
The report identifies five practices common to the legal teams that have scaled AI successfully:
- Invest in your people: Treat training and change management as an ongoing investment, not a one-time onboarding task.
- Start small: Run structured pilots on focused, low-risk use cases before scaling. Think eight to twelve weeks, one use case, and measurement baked in from day one.
- Set the rules first: Establish AI governance and policies before deployment - not after problems surface.
- Know what problem you're solving: Tie AI to measurable legal outcomes. ROI built on anecdotes and satisfaction scores isn't ROI.
- Phone a friend: Leverage power users and outside partners rather than trying to figure it out alone.
In-house legal leaders say they're seeing these dynamics play out firsthand.
"AI is moving fast inside legal departments, but speed without discipline creates risk," said Hiro Oshima, Deputy General Counsel, Americas at SMBC Group. "Axiom's findings reflect what in-house legal leaders are seeing firsthand: rigorous evaluation should be non-negotiable before a legal team commits to an AI tool. The real test is whether a solution can deliver reliable value in the workflows, risk environment, and business context where legal teams operate."
"The technology is not the hard part," said Chris Frickland, VP, AI Solutions at Axiom. "The layer around it is where value either shows up or it doesn't. That means getting the tool set up for how in-house legal teams actually work, training people to use it effectively, and staying with it long enough to see the payoff. That's the kind of governance most legal departments haven't had to build - and it's exactly what we see separating the leaders from everyone else."
Most legal departments are looking outside to close that gap: 98% of current AI users and 77% of teams that haven't adopted AI yet say outside guidance on tool selection would help. Asked who they'd trust for it, respondents rank alternative legal service providers (ALSPs) ahead of consulting firms, law firms, AI vendors, and industry associations - and prefer ALSPs over law firms for AI-enabled work by more than two to one (52% to 24%).
"For GCs, this report is less a market snapshot than a checklist," Morgan said. "Who actually picks your AI tools? Has your team had real training, or just access? Are AI-enabled workflows being measured against legal outcomes, or only usage metrics? Have you planned ahead and built a strong foundation of process and playbooks? Those are answerable questions, and the departments that can answer them are the ones pulling ahead."
The 2026 Axiom In-House Legal AI Report: Legal AI Is Everywhere. Now Comes the Hard Part. is available at: https://www.axiomlaw.com/resources/articles/legal-ai-survey-report
About Axiom
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SOURCE Axiom
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