A new survey by LegalOn has found empirical data that supports what Artificial Lawyer is hearing on the legal tech street, namely that while inhouse teams have now largely onboarded AI tools, their use level remains minimal and it’s having little meaningful impact.
As the graph below shows, and as LegalOn explained: ‘Despite 92% of teams using AI, the market remains immature, with the majority of these teams still in the earliest stages of adoption.’
They added:
‘Ordered left to right, from least-to-most advanced (Laggards to Innovators), the shape is telling: more than half of respondents (54.9%) are still in the experimentation phase, exploring prompts and tools without shared workflows or standards.
‘Standardizing prompts and workflows (26.5%) puts you ahead of roughly two-thirds of the market. Reaching connected knowledge (8.8%), where AI is grounded in your own playbooks and policies rather than generic prompts, puts you in the top 11%. A single-digit handful (n=2, 2.0%) describe full workflow support across intake, triage, contract work, and post-signature insight.’
In short, only 2% are really using inhouse legal AI platforms to their full extent.
And yet AL has also heard a few great anecdotes about how some inhouse teams have really embraced AI, and some have even massively cut outside legal spending…..but, these are the outliers for now, as the data shows. But, things will change.
Meanwhile, one may ask: how can we hear such amazing stories about substantive change, and yet the data says it’s only about 2% of companies doing this? The answer is all about scale. For example, it’s estimated that there are over 12,000 companies – just in the US – with more than 1,000 staff. I.e. companies that probably have inhouse lawyers and notable legal needs. Of those, we only need a handful to share some great initiatives and you could fill a conference with wonderful stories of change.
Yet, it would remain a tiny proportion of the whole. Then, when you look globally, the scale issue extends. Thus, we have a long way to go.
What Does This Mean?
It’s the old ‘you can lead a horse to water’ challenge. Inhouse lawyers are happy to use AI tools that give them some quick wins and immediate efficiency gains in a very localised way, but moving to a scenario where they really have to change how they work – across the whole team – to get the most out of what LLMs can do now, is a big ask.
As explored yesterday – see here – many companies just don’t have the organisational structure or culture in place yet to support really powerful deployment of AI tools. Contracts ‘belong to everyone’, systems of record are divided, and there is no overall strategy for change.
That then means that when inhouse lawyers bring in an AI tool they use it individually at what AL would call ‘desk level’, i.e. where it impacts their immediate surroundings, their close sphere of activity – which is logical given the situation.
What is not there is a global view of the whole enterprise and the contracts and obligations running through it, with playbooks and other contextual resources deeply embedded and used across the business.
There is also a chicken and egg challenge. AI systems that can deliver huge value within a reorganised business structure cannot achieve that until those changes are made. AI systems thus are waiting for the inhouse team – and other business units – to embrace the full scale of what AI can do…and the inhouse teams may perhaps be frustrated they’re not getting more from AI as well.
At some point leadership needs to step in and take control – and drive change at a systemic level. Of course, herding cats – within law firms or inhouse – is not easy. And so, we get broad AI use which is also not that impactful, i.e. a large, very shallow lake of activity.
There’s a lot more in the LegalOn report, which you can find here: 2026 LegalOn Inhouse Pulse.
But, as AL wrote yesterday, the biggest problem now with AI is not AI, it’s organisational culture: Culture Still Eats AI For Breakfast.
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Two Major Legal Innovators Conferences this November
Come and join us in New York and London this November at Legal Innovators!
Legal Innovators UK – London, Nov 4 and 5
And, then Legal Innovators New York – Nov 17 and 18.
After another fantastic Legal Innovators California, where we had speakers from OpenAI, Y Combinator, Google, Meta, and many more pioneering organisations; and our stellar inaugural event in Paris this June, we are now looking forward to the landmark conferences in London and New York, both in November, and both across two days: Law Firm Day, and Inhouse Day.
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