As legal departments navigate increasingly complex business environments, the findings from Axiom's 4th Annual General Counsel Research Report provide valuable insights into how GCs are adapting. This comprehensive survey of 500 GCs across the U.S., EMEA, and APAC regions challenges conventional wisdom about how legal departments operate during periods of economic uncertainty.
The Countertrend: Legal Departments Are Investing, Not Cutting
While many corporate functions face budget constraints, our research reveals a compelling countertrend: 83% of GCs reported budget increases, averaging 10%. This isn't just incremental growth—these increases range from 1% to as high as 56%, signaling that organizations increasingly view their legal functions not as cost centers but as crucial risk management partners.
The data shows companies are making strategic investments in their legal departments to build resilience against potential disruptions, including:
- Policy changes on an international scale
- Rapidly shifting business cycles
- Technological disruption, especially from AI
The complexity of today's business environment demands more from legal teams, not less, and forward-thinking organizations are responding accordingly.
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Three Pillars of Legal Department Resilience
Our research uncovered a remarkably consistent playbook that forward-thinking GCs are implementing across regions. This three-pillar approach focuses on transforming how legal departments operate by strategically leveraging people, processes, and technology.
Pillar 1: Transformative Investment in Legal Operations
Legal operations emerged as the cornerstone of departmental transformation, with 87% of GCs increasing their legal ops investment by an average of 11%. What's particularly striking is that 80% of organizations are either maintaining (40%) or implementing (40%) dedicated legal ops functions.
What's driving this investment? The ROI is clear:
- 36% report implementing new internal processes that drive significant efficiency gains
- 36% have strategically shifted in-house legal work to flexible talent providers
- 33% have adopted new legal technologies, including AI
Strong legal operations transform a department from reactive to strategic. The most effective legal ops teams now blend diverse expertise—47% are legal professionals, 44% come from IT backgrounds, and 36% bring finance expertise.
Pillar 2: Strategic Technology and AI Integration
AI now influences 38% of in-house legal decisions—a remarkable statistic that highlights both the growing trust in AI and the risks it brings. However, our research uncovered a concerning implementation gap: 70% of GCs acknowledged their teams lack sufficient AI training.
This creates significant risk in AI-influenced decisions and broader technology adoption. While 76% of legal departments have AI policies covering authorized tools and use cases, policy alone isn't sufficient. Comprehensive training and change management are essential to unlock AI's full potential while mitigating risks.
Legal departments must take a balanced approach to AI adoption—embracing innovation while ensuring proper governance and training.
Pillar 3: Strategic Resource Optimization
Perhaps most telling is that despite budget increases, 47% of global GCs report their departments remain insufficiently resourced. The challenge isn't just about headcount—it's about optimizing resources strategically.
GCs are increasingly sophisticated in balancing quality, efficiency, and expertise:
- 37% prioritize better value
- 35% focus on specialized expertise
- 35% emphasize cost efficiency
- 32% value practical advice
- 32% prioritize rapid deployment
This reflects a shift toward more agile, expertise-driven resourcing models that deliver the right expertise at the right time.
Notably, traditional law firm arrangements face increased scrutiny, with 97% of GCs reporting regrets after outsourcing over a quarter of their legal matters. The main complaints include impractical advice (37%), excessive administration (32%), and inadequate business acumen (31%).
Five Strategies to Build a More Resilient Legal Department
Based on our findings, here are five actionable strategies for enterprise GCs looking to strengthen their departments in 2025:
- Invest in multidisciplinary legal operations teams.
- Integrate professionals with legal, IT, and finance backgrounds.
- Focus on measurable efficiency gains and process improvements.
- Establish clear ROI metrics for legal ops investments.
- Develop a comprehensive AI governance framework.
- Go beyond policy creation to implement robust training programs.
- Establish clear guidelines for AI-influenced decisions.
- Measure AI success through efficiency, strategic alignment, and work product quality.
- Embrace flexible talent models.
- Supplement core team capabilities with specialized expertise.
- Evaluate providers based on business acumen and practical advice.
- Look beyond just cost savings to overall value delivery.
- Align legal department goals with business objectives.
- Establish regular touchpoints with business units.
- Develop metrics that demonstrate legal's contribution to business growth.
- Position legal as a strategic enabler rather than a cost center.
- Invest in continuous upskilling.
- Prioritize AI and technology training for all team members.
- Develop business acumen alongside legal expertise.
- Create mentorship programs that cultivate both technical and soft skills.
From Surviving to Thriving in Uncertainty
The most successful GCs in 2025 won't just be those who manage legal risks effectively—they'll be the ones who position their departments as strategic business partners capable of navigating uncertainty.
Our research shows that 78% of GCs report they are "completely" or "very" aligned with broader organizational goals, demonstrating a significant shift in how legal departments view their role. This alignment is crucial for securing the resources needed to build truly resilient teams.
The investments made today will determine which legal departments merely survive and which enable their organizations to thrive despite uncertainty.
The path forward is clear: empower and elevate legal ops, embrace technology thoughtfully, and optimize resources intelligently. These three pillars form the foundation that enables legal departments to absorb shocks to the system and continue to deliver value regardless of what challenges emerge.
Want to dive deeper into these insights? Download our full report, "Investing for Uncertainty: How GCs Are Building Resilient Legal Departments in 2025," to access all the data and regional analysis.