Growing workload demands are driving down outside counsel spend as organizations take a more intentional approach to AI
CHICAGO, Dec. 8, 2025 /PRNewswire-PRWeb/ -- Harbor today released benchmarking data from its 22nd annual survey of corporate law departments, in collaboration with CLOC (Corporate Legal Operations Consortium). The 2025 Law Department Survey highlights a more tempered approach to spending, a stabilization in staffing plans, significant momentum in outside counsel optimization, and a sharp rise in both the structure and use of artificial intelligence across legal departments.
Harbor's annual Law Department Survey offers one of the industry's most comprehensive looks into how in-house legal departments are adapting amid economic pressure, demand growth, and rapid advancements in legal technology and AI. The survey captures insights from 135 corporate law departments across more than 15 industries, representing organizations with a median revenue of $13 billion.
"This year's survey reflects a legal function that is becoming more intentional, data-driven, and operationally mature," said Lauren Chung, survey editor and Practice Group Lead, Strategy + Transformation at Harbor. "Departments are shifting from reactive cost-containment to structured operational strategies – optimizing outside counsel, implementing workflow technologies, and building robust AI governance. The emphasis on legal operations and technology strategy underscores that transformation is now a defining capability of leading corporate law departments."
Legal ops teams continue to expand their influence, with departments identifying technology strategy (80%), financial management (72%), and outside counsel/vendor management (62%) as top priorities for the year ahead.
Shifting Spending Priorities as Departments Seek Efficiency
As workload pressures persist, especially in regulatory (63%), cybersecurity/IT governance (58%), and contracts (53%), inside and outside counsel spend expectations dropped sharply year over year, signaling increased scrutiny and a push for efficiency.
Only 47% of departments anticipate increases in inside legal spending, down from 65% last year. Outside counsel spend expectations saw a similar decline, from 58% projecting increases last year to 37% this year.
Staffing Expectations Stabilize as Departments Optimize Outside Counsel
After several years of growth and contraction cycles, staffing forecasts appear to be leveling. While 41% of law departments expanded in the past year and 45% contracted, most anticipated headcount to remain unchanged in 2025.
Lawyer headcount predictions dropped noticeably: 32% of departments expect increases, down from 42% last year.
More legal departments are formally optimizing outside counsel relationships, with 76% stating they use alternative fee arrangements (vs. 70% last year). Furthermore, 61% completed or are implementing convergence/preferred provider panels (up sharply from 50%) and 65% made intentional efforts to keep work in-house in the last one to two years.
AI Is Moving Beyond Exploration into Active Deployment
AI saw the most decisive shift of any category in the survey – 85% of departments now have a dedicated resource or committee managing AI efforts. The majority have already implemented or piloted tools for productivity, summarization, legal research, content creation, and contract intelligence. Departments are actively exploring emerging use cases in compliance, privacy, legal analysis, and chatbots.
"The surge in AI adoption is a turning point," said Jaime Woltjen, Senior Director of Strategy + Transformation at Harbor. "Legal leaders are no longer simply exploring AI – they're deploying it to unlock productivity, accelerate legal research, and enhance content and contract workflows. At the same time, departments are thoughtfully building governance frameworks to ensure responsible and secure use. What we're seeing is a shift from experimentation to enterprise-level integration."
"As legal departments face rising demands, legal operations has become the engine that keeps the function running efficiently and strategically. It's no surprise that technology strategy, financial management, and outside counsel management top the priority list for the year ahead. These focus areas reflect a profession that is doubling down on operational excellence to drive sustainable impact," said Oyango Snell, Executive Director of CLOC (Corporate Legal Operations Consortium).
In-depth benchmarking data from the 2025 Harbor Law Department Survey in collaboration with CLOC is available by industry, revenue, law department size, and geography in a dynamic online portal. Further information on gaining access to data relevant to your corporation or law firm is available here.
Through the Harbor/CLOC partnership, this data will be used to produce the 2026 CLOC State of the Industry Report, which will be published in February 2026. The report provides CLOC members a deep, legal-operations-focused analysis of the findings. A joint Harbor/CLOC webinar will walk through the results and what they mean for legal teams. The two organizations will also take the stage together at the 2026 CLOC Global Institute in Chicago in May, to dig into the findings and highlight the trends shaping legal operations in the year ahead.
About the 2025 Harbor Law Department Survey
The annual Harbor Law Department Survey, conducted in partnership with CLOC, is one of the industry's most widely referenced barometers of in-house legal department performance, investment, and operational maturity. This year's report includes insights from leaders across 135 law departments representing more than 15 industries and organizations with median revenues of $13 billion.
Harbor will host a webinar discussing the results of the survey on Wednesday, Dec. 10 at 10 a.m. CT. Click here to register.
About Harbor
Harbor is the leading provider of professional and technology services to the legal industry, encompassing strategy, technology, operations, and intelligence.
With a global team of 900 professionals, Harbor works with over 80% of Global 200 law firms and 500 corporate legal departments to optimize performance and enable business and digital transformation. Headquartered in Chicago, the firm has offices in London, Belfast, Moncton, and Sydney.
Harbor, a BayPine LP portfolio company, is advancing its next phase of growth – broadening its technology, data, and managed services capabilities to serve as the distributor of innovation for the legal sector. For more information, go to www.harborglobal.com.
Media Contact
Erin Harrison
LIMELIGHT
[email protected]
Media Contact
Erin Harrison, LIMELIGHT, 1 2036109492, [email protected], www.limelightgrowth.com
SOURCE Harbor
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