Bloomberg Law: Five Steps to Help Prep Your Legal Department for AI Adoption

In-house legal teams and law firms are of two minds on artificial intelligence—concerned about getting left behind during a once-in-a-generation technology transition, but also quietly wondering if AI might be mutton dressed as lamb.

Many view AI as a tool to reduce headcount, accelerate processes, and save money. They’re concerned about the impact on quality and the billable hour, as well as how to encourage lawyers to actually use it, who will be replaced, and how to develop effective policies and controls over something that seems unstoppable and rapidly evolving.

But AI has the potential to transform legal work in a healthy—and cost-effective—way. Consider five key steps to help this happen.

Step 1: Do your housekeeping.

It’s tempting to lean on AI to overcome the digital transformation your department has neglected for years. But in the legal industry, such leapfrogging won’t work.

Consider your document management systems. Imagine how much smoother and easier AI implementation could go if your department first cleaned up and organized those documents. Investing in cost-effective outside resources to handle this foundational work would be far more efficient and faster in the long run.

Such housekeeping is dull as ditchwater. Nobody wants to manually clean up master service agreements, make templates consistent, rationalize amendments with original agreements, or normalize metadata. But grafting AI solutions over your messy filing systems and unruly databases would compound the cost and time of AI adoption exponentially.

Step 2: Make friends with your digital natives.

AI will force legal departments to undergo a root-and-branch change in how they’re resourced and staffed. Now’s the time to get ahead of that change. Find people inside your department who will be eager to help build your AI capabilities.

Who are your digital allies? Picture a spectrum: senior lawyers with legal expertise on one end and tech-savvy junior lawyers on the other. The latter, often overlooked in traditional settings, are now your greatest AI implementation asset.

Consider this real-world example: A general counsel at a global advertising firm needed guidance on French advertising law and turned to outside counsel. After waiting two weeks without a response, one of her junior team members suggested using Claude, an AI assistant developed by AI startup Anthropic PBC.

The GC tried the AI tool and received a detailed answer in seconds. To verify its accuracy, she sent the AI-generated response to her outside counsel for review. They confirmed it was correct. Instead of waiting two weeks and paying $5,000 for a memo, she received accurate information almost immediately and paid just $200 for the verification.

Now, she regularly spends time with those team members, learning more about how they use AI and what it can do. And she’s on the lookout for more tech-savvy junior associates to join the department.

Step 3: Establish standards that enhance value.

In a recent survey on AI, 99% of legal departments reported that their teams use AI for work purposes, but 81% say that not all AI tools have been approved by their company. That means most legal teams are turning to solutions that aren’t sanctioned or controlled.

GCs and senior partners rightly worry about the quality and accuracy of AI-sourced work outputs as well as data security, privacy, and confidentiality challenges.

Like doing housework, prepping for AI is a good time to determine which data, information, and rules your AI system will be able to access—and to streamline and refine existing processes to make them consistent and efficient.

In Europe, emerging AI regulations will soon create new and likely stringent data standards. Some clients have limited their experimentation with AI to internal trials and won’t open their systems until they know things are secure.

It’s also important to establish a culture of quality from the beginning. It will be tempting for lawyers, especially younger ones, to become passive with such tools and forego checking outputs or taking additional steps to improve their work product. AI provides a starting point, not a destination. It should augment lawyers, not replace them.

Step 4: Implement testing and performance measurement.

Real-world testing of AI tools is critical before widespread deployment. A recent Stanford University study revealed that leading legal AI systems hallucinate in 17% to 33% of queries—despite vendor claims of “hallucination-free” tools. This gap between promise and reality underscores why organizations need evidence-based evaluation methods. Successful implementations establish clear metrics beyond efficiency, measuring accuracy rates, quality improvements, and user adoption.

Rather than simply accepting AI tools at face value, successful legal services providers and in-house legal departments are developing structured pilot programs. Indeed, the legal teams participating in our recent pilot with a contract management AI reported tangible metrics—such as 40% to 60% time savings on contract review tasks—that provide the confidence needed to move forward with full deployment.

Step 5: Pair technology with legal talent.

The most successful AI implementations in legal settings recognize that technology alone isn’t the answer. AI solutions must be paired with legal talent equipped to maximize their potential.

The most successful in-house legal departments pair AI specialists with experienced attorneys in cross-functional groups. This hybrid approach blends technological efficiency with essential legal expertise—ensuring AI augments, rather than replaces, human expertise.

Setting up the right team structure to support AI adoption means identifying which attorneys are best positioned to evaluate AI outputs, which tasks benefit most from automation, and where human judgment remains irreplaceable.

Massive Upheaval

In an industry that has been reluctant and half-hearted about adopting technologies as simple as accounting software, customer relationship management systems, and SharePoint, firms and legal departments will soon look and operate very differently than today.

How can you embrace that future? Vision and bold statements are fine, but the practical benefits of AI adoption will accrue to departments and firms that prepare for it on a tactical level now.

The legal industry faces a watershed moment as AI transforms legal work at its core. For in-house teams, success hinges not on tool selection but on thoughtful preparation of people, processes, and systems.

This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.

Reproduced with permission. Published April 10, 2025. Copyright 2025 Bloomberg Industry Group 800-372-1033. For further use please visit https://www.bloombergindustry.com/copyright-and-usage-guidelines-copyright/