By Ellen Traweek, LexisNexis.
When generative AI first swept across the professional world, the legal industry faced a familiar question: innovate or hesitate?
For inhouse counsel, the answer seemed deceptively simple. Free or low-cost AI tools offered the allure of speed, efficiency and accessibility – drafting memos in seconds, summarizing contracts overnight and parsing complex regulations at the click of a prompt.
But as legal departments are quickly discovering, ‘free’ AI often comes with a price measured not in dollars, but in risk.
The Mirage of Free
The promise of generative AI is irresistible: instant answers, synthesized insights and automated drafting. Yet when those tools are designed for general use – trained on open data, with no legal oversight – the results can undermine the very duties attorneys are sworn to uphold.
Free or public AI systems often store or learn from user inputs, meaning that a single query could inadvertently disclose privileged client data or confidential company information. Even anonymized prompts can reveal strategy, deal structure or regulatory exposure when aggregated by third-party servers. Once that data leaves your secure ecosystem, it’s out of your control, and potentially discoverable.
In the well-publicized Mata v. Avianca case, attorneys relied on a public AI tool that generated fabricated case law citations. The court’s sanctions became a wake-up call across the profession: AI without validation isn’t assistance, it’s exposure.
For inhouse counsel, the implications extend beyond embarrassment. When AI-generated content circulates internally or informs corporate decision-making, errors can multiply at scale. A hallucinated citation in outside litigation is bad enough. A hallucinated statute informing an M&A strategy could be catastrophic.
Ethics, Governance and the Accountability Gap
The American Bar Association’s Formal Opinion 512 (2024) couldn’t be clearer: lawyers must understand the capabilities and limitations of the AI tools they use. That means maintaining client confidentiality (Model Rule 1.6), ensuring technological competence (Rule 1.1), and supervising AI-assisted work (Rule 5.3).
Yet governance is often the missing layer between curiosity and compliance. Public AI platforms are built for mass consumption, not professional accountability. They cannot offer transparency into data provenance, model training, or legal accuracy. They don’t certify compliance with GDPR, SOC 2 or ISO standards. And they certainly don’t indemnify users when AI-generated errors cause harm.
This governance gap leaves inhouse attorneys in a dangerous gray zone: responsible for AI-informed decisions but unable to verify the tools’ reliability.
True Legal AI – the kind designed specifically for legal work – fills that gap.
By grounding outputs in authoritative legal sources and protecting client data through zero-retention architecture, systems like Lexis+ AI with LexisNexis Protégé transform generative AI from a novelty into a defensible part of the legal workflow. Every citation is validated through Shepard’s, every session encrypted, every output traceable.
The Real ROI: Risk Optimization and Influence
Forward-thinking legal departments aren’t just turning to AI for efficiency. They’re using it to expand their influence across the business. According to research in The Department of Yes whitepaper, 86% of legal professionals report efficiency gains from AI, and 59% cite risk management as their top strategic priority.
As AI automates low-value tasks like document review or legal summarization, attorneys can focus on strategic partnerships: advising product teams on regulatory risk, collaborating with finance on disclosure strategy or driving ESG compliance.
And the results are measurable. A recent commissioned study conducted by Forrester Consulting¹ on behalf of LexisNexis on the Total Economic Impact of Lexis+ AI found that organizations using purpose-built legal AI achieved a 284% ROI within three years, driven by reduced outside counsel spend and faster decision-making. Those numbers tell a simple story: the future of inhouse legal work isn’t just faster, it’s smarter, safer and more influential.
AI That Meets Legal’s Standards – Not Just Its Deadlines
The challenge for inhouse counsel isn’t whether to adopt AI, it’s which kind to adopt. Public AI tools democratized access to machine intelligence but at the cost of security, provenance and accountability. Legal departments can’t afford that trade-off. Every document you generate, every piece of data you analyze, every clause you redline is an extension of legal judgment – and by extension, of legal liability.
That’s why the next evolution of inhouse legal technology must be grounded in trust architecture:
- Zero data retention so privileged information never leaves your control.
- SOC 2 Type II and ISO/IEC 42001 compliance for auditable governance.
- Legally authoritative sources verified in real time.
- Integrated workflows that connect research, drafting, and collaboration securely.
The Takeaway for Inhouse Counsel
The role of General Counsel is evolving from gatekeeper to growth partner. But with that evolution comes heightened responsibility: to innovate safely, lead strategically and preserve trust. AI is no longer optional—but governance is non-negotiable.
Free AI tools promise convenience. True Legal AI delivers confidence. And for corporate legal departments, that difference isn’t semantic, it’s existential.
Read The Cost of Free and learn how inhouse legal teams are using true legal AI to balance innovation with integrity.
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¹’The Total Economic Impact™ Of Lexis Nexis+AI For Corporate Legal Departments’, a commissioned study conducted by Forrester Consulting on behalf of Lexis Nexis, June, 2025. Results are based on a composite organization representative of interviewed customers.
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About the author: Ellen Traweek is Marketing Manager at LexisNexis in the USA.
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[ This is a sponsored thought leadership article for AL by LexisNexis. ]
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