As artificial intelligence continues to transform both in-house and private practice legal teams, a new survey has found that GCs are increasingly expecting their law firms to be fully transparent about how they are using AI.
The findings come from a report by KPMG, which surveyed 468 GCs and senior legal leaders around the world across industries including financial services, TMT, consumer retail and leisure and healthcare.
Of the senior in-house lawyers surveyed, 82% said they expect their external providers to explain to them how they are using AI.
In addition, two thirds of respondents said they expect a greater focus on technology-enabled services from their external providers, as in-house teams look to external counsel to provide more than legal expertise.
The survey also found that tech advances are adding further pressure on the billable hour, with 87% of respondents saying that value or outcome-based pricing models are preferable to time-based pricing.
Introducing the report, KPMG Law global head Stuart Bedford said: ‘As more advanced agentic AI systems emerge – capable of coordinating workflows, synthesising information and supporting complex analysis – the structure of legal work itself is likely to evolve.
‘Legal leaders will need to determine not only where AI augments legal judgement, but how these capabilities are governed, integrated and trusted across the enterprise.’
One GC speaking with Legal Business was emphatic that law firms need to be transparent with GCs where they are using AI. ‘They’re very shy in coming forward about it,’ they said. ‘I absolutely want transparency. I want them to celebrate it and tell me who they’re using, what they’re using, and how that’s going to lead to either a reduced cost or an increased service.’
Their advice to law firms: ‘Be bold, be honest about it.’
Many in-house teams have already begun redesigning their engagement model with firms, with major clients requiring law firms to specify which work has been completed using AI.
Last month, HSBC global head of legal external engagement, Stephanie Hamon, spoke with LB about how AI will soon become a requirement for panel firms at the FTSE 100 bank, while Monzo chief legal and administrative officer Stephanie Pagni discussed the need for firms to redesign the entire business model to focus on outcomes rather than hours worked.
The KPMG report also underlines how legal heads are now more broadly called on for strategic advice, with 92% of respondents reporting regular interactions with the board, and 75% regularly being asked to advise on non-legal issues. Earlier this year, the Association of Corporate Counsel found that more GCs than ever report directly to their CEO.
The survey canvassed GCs from across EMEA, the Americas and Asia-Pacific regions, with 61% of respondents based across EMEA.
