For more than two decades, the legal industry has used the annual Harbor Law Department Survey to help understand changes in the space, and that data also informs CLOC’s 2026 State of the Industry Report. Our latest survey results point to a fundamental shift. Rather than advancing previous discourse about “doing more with less,” rising demand paired with tighter growth expectations is reshaping how legal departments operate, with technology and governance playing a larger role in how work gets done.
If you’ve felt a heightened sense of pressure lately, you’re not alone. The data from our 2025 Law Department Survey, conducted in collaboration with CLOC, reveals a legal operations ecosystem under strain. Demand continues to surge in high-risk areas, such as regulatory compliance, cybersecurity, and complex contracting. Yet, the most common relief valves; expanding headcount and offloading work to outside counsel; are more constrained than last year.
In this environment, legal operations is rising in strategic importance, becoming a main lever for efficiency at scale and enterprise success.
The New Math: Flattening Spend Meets Rising AI Adoption
The latest data poses a paradox: accelerating AI adoption comes at the same time that hiring and spending are leveling off. Expectations for increased spending on outside counsel have dropped sharply, from 58% last year to just 37% this year. Projections of inside legal department spending follow a similar downward trajectory, with fewer than half of responding departments anticipating internal budget increases (47%), compared to 65% last year.
Instead, legal departments are taking an intentional approach to adopting AI, piloting and deploying tools in multiple areas, from research to content creation to contracting and beyond.
We’re seeing a decisive move from AI experimentation to enterprise-level deployment. At 85%, an overwhelming majority of departments now have a dedicated resource or committee in place to manage AI use. Increasingly, legal ops professionals are relying on AI to help support workflows, accelerate research, and drive efficiencies.
Data Helps Guide Innovation
For the CLOC community, this report can help chart the course to continued success despite ongoing headwinds. As more departments pursue innovation amid heavy workloads, the industry survey points to key areas where many peers have focused their legal transformation efforts. Benchmarking data can help make a strategic case to the C-suite about where to direct precious resources, and which tasks would derive the greatest benefit from applying AI-enabled workflows.
For example, the report can help validate the strategy for staffing ratios and technology spend by showing your department is not an outlier. It can also identify gaps where high-level talent may be bogged down in high-volume tasks that have potential for automation. With these insights and support from the data, you can focus on accelerating service delivery and freeing up internal resources for judgment-based work that delivers real value.
Crucially, a data-backed approach can help win the buy-in you need to align on key decisions, such as the tools and governance policies needed to support the responsible use of AI based on industry practices.
Join Our Webinar
On March 5, I’ll join leaders from CLOC and Harbor for an exclusive, CLOC members-only webinar to unpack these findings. At this pivotal moment for the profession, we’ll discuss how we can use this data to navigate choppy waters and steer toward safe harbor together.
During our upcoming session, I’ll join CLOC President and CEO Oyango Snell and my Harbor colleague Lauren Chung, Practice Group Lead, Strategy + Transformation, to preview key findings from the report and examine what the data says about legal ops today.
We’ll also discuss actionable strategies by highlighting a few real-world examples of legal departments that undertook transformation and reaped the benefits. From staffing and vendor strategy to technology and AI governance, we’ll discuss how legal departments have faced challenges and responded with impactful solutions.
The latest data paints a picture of innovation and new possibilities. Far from contraction, we have entered a period of opportunity where legal operations drives cross-functional collaboration and value.
Join us March 5 and help turn this data into your department’s competitive advantage. You can register here for the webinar.
