The legal industry has spent years asking the wrong questions: Which departments have the most AI tools? Which GCs are moving fastest? Who’s ahead in the adoption race? These days, speed of adoption is just table stakes. The real differentiator for legal functions in the next five years will be what happens after adoption.
According to the Thomson Reuters Institute’s 2026 State of the Corporate Law Department Report, 86 percent of GCs believe their departments make a significant impact on organizational objectives. Only 17 percent of C-Suite executives share that view, and 42 percent of senior leaders say the legal department contributes “little or not at all.” This isn’t just a perception issue. It’s a strategy problem. AI is amplifying it.
The dangerous middle
Right now, the real risk for any legal department isn’t falling behind on AI. It’s getting stuck in the middle, adopting tools without rethinking how the department creates and shares value. Departments in this middle zone take on transformation costs but miss out on transformation value. They’re not efficient enough to compete on volume, and they’re not distinctive enough to earn a strategic seat at the table.
Most GCs have focused on unlocking capacity by streamlining workflows, automating repetitive tasks, and getting work done faster. But few have taken the next step: using that new capacity in ways the business can see, tied to revenue outcomes, or linked directly to what the C-Suite cares about. The gap between unlocking and deploying is where the visibility problem lies. That’s the difference between a legal department that transforms itself and one that transforms the business.
The warning signs show up everywhere. AI tools are in place, but no one owns the AI strategy. Adoption happens reactively, not proactively. The department does the same work faster, but its value proposition to the business hasn’t changed. When legal measures AI’s impact mainly by cost savings and hours reclaimed, it’s speaking the wrong language for the C-Suite. When executives say legal contributes little, they’re not ignoring the work. They just don’t see how it connects to the business.
At Thomson Reuters, the GC’s office acts as what we call “customer zero” for our AI products, testing them in real workflows, on real matters, before anyone else. One project gathered scattered antitrust guidance into a single resource that lawyers could draw on consistently. The payoff wasn’t speed. It was more consistent decisions from lawyers, and a legal team the business trusted more, not just one that moved faster.
AI doesn’t fit all legal work
There’s another issue that doesn’t get enough attention: Not all AI is designed for high-stakes professional work, and treating all tools as interchangeable brings its own risks. Legal work demands a standard that most AI can’t meet. When a GC signs off on a risk assessment, a regulatory opinion, or a contract analysis, every conclusion must be traceable and defensible. What matters in these situations isn’t how fluent the output sounds. It’s whether the reasoning is clear, the sources are verifiable, and a subject-matter expert reviews the work before it reaches a decision-maker. That’s a much higher bar than most consumer-facing AI can clear, and treating the two as the same doesn’t just risk the work product. It risks professional credibility. This difference will only matter more as AI matures.
What strategic clarity looks like
The legal departments that come out ahead will be the ones who can answer the C-Suite’s real question. Not “How efficient are you?” but “How are you helping us grow, compete, and win?”
That means treating AI as a business strategy, not just an efficiency play. Success isn’t only about time saved; it’s about risk avoided, revenue enabled, and better decisions made faster. It also means building AI infrastructure on accuracy and accountability, making it truly worthy of the work it supports. Most importantly, it means describing that work in business terms, not legal jargon.
The window for making these choices is narrow. AI has shifted from experimental to operational, and what legal departments build now, and why, will define their relevance for years to come.
Without strategic clarity, AI isn’t a competitive edge; it’s a liability. In a profession where precision isn’t negotiable, that’s a distinction no legal leader can afford to miss.
Liz Zimick
www.thomsonreuters.com
Liz Zimick is President of Corporates at Thomson Reuters, which helps professionals work faster and with confidence through AI, trusted content, and workflow tools. The company supports legal, tax, accounting, trade, and risk teams with technology designed to improve decisions, reduce friction, and deliver defensible work.
