Australia second-highest country for AI investment in-house

The study surveyed more than 600 senior in-house leaders across eight countries between April and May 2025 to learn how and to what degree they’re embracing legal AI.

According to the report, three-quarters of legal departments are currently increasing AI budgets by 26 per cent to 33 per cent, and two-thirds are accelerating adoption timelines, but only one in five has achieved “AI maturity”, reflecting what the report states is a “chasm between teams racing to reap AI’s benefits and those trapped in analysis paralysis”.

Eighty-nine per cent of in-house legal teams reported increased AI usage this year – and nearly all organisations (76 per cent) surveyed said they were increasing their AI investment. In Australia specifically, 85 per cent are currently increasing their budgets around AI – the second highest in the world behind Hong Kong at 95 per cent.

Despite this, only 21 per cent of those surveyed identified themselves as mature organisations, actively using AI on client work and “aggressively expanding scope and use”, while 66 per cent said they were in proof-of-concept or testing phases with growing active use. Just 13 per cent had no active use, despite researching AI tools.

Sixty-six per cent of departments said they were using AI chatbots not specifically designed for legal work; of these, ChatGPT was used the most at 42 per cent, followed by Copilot (25 per cent), Gemini (20 per cent) and Claude (15 per cent).

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According to the report, bespoke legal AIs were used by “no more than 7 per cent to 17 per cent” of in-house departments.

“Today, just a small number of global in-house legal teams aren’t using AI much, if at all … but even they are now looking into or experimenting with AI. It’s safe to say that AI acceptance and momentum among corporate legal teams has turned the corner, and as such, AI is on its way to becoming commonplace across a range – if not the entire range – of legal use cases in the not-too-distant future,” the report said.

“But while AI technology appears to be on a path to pervasiveness in corporate legal, operational requirements that should be equally pervasive are lacking across all regions surveyed. Usage policies, use of specialised AI legal talent, tech pilots/POCs, staff training, technology safeguards, data privacy rules, and other prerequisites for success and safety aren’t in sync with AI’s speed of adoption. This is an issue even among the leading AI adopters.”

In terms of the risk of AI, 69 per cent of legal leaders said that AI poses a moderate risk to their organisations, while 33 per cent said the emerging tech poses a “high” to “extremely high risk”, and 32 per cent said it poses a low risk.

Despite this, only 38 per cent had implemented an AI use policy, 37 per cent had conducted pilots before a rollout, 36 per cent brought in AI experts to assist with AI application and trained staff, 34 per cent implemented tech safeguards, and only 32 per cent said they have data privacy rules in place.

On the firm side, 79 per cent of law firms reported actively using AI tools – but 58 per cent said they hadn’t reduced rates for work assisted by AI – rather, 34 per cent of law firms said they were charging more for AI-assisted work, with only 6 per cent charging less.

More to come.