Why AI is becoming the hottest cost-cutting tool in corporate legal departments (www.businessinsider.com)

In-house legal teams are increasingly adopting artificial intelligence tools that streamline tasks such as drafting legal documents and reviewing compliance, significantly enhancing operational efficiency. For instance, Doug Mandell, general counsel at Inflection AI, now uses AI from GC AI to draft policies rapidly, reducing the need for billable hours with outside law firms. This shift allows in-house lawyers to respond more quickly to business needs, steering the conversation with outside counsel by sharing prepared documents rather than starting from scratch. As legal costs are among the highest expenditures for companies, the adoption of such AI tools is enabling legal departments to manage their budgets more effectively. The rising efficiency of in-house teams creates pressure on traditional law firms, which often operate on a billable-hour model that could be threatened by increased automation. Legal tech startups like Harvey and GC AI are capitalizing on this trend, offering solutions that enhance productivity and allow corporate legal teams to focus on high-value strategic discussions instead of routine tasks. This new landscape is reshaping expectations, with general counsels increasingly scrutinizing outside firms' use of AI and integrating these technological capabilities into their hiring criteria, all while managing tighter budgets for legal services.