Not only do legal chiefs need to stay on top of AI laws popping up both domestically and internationally, but they also need to figure out how to use new technology to operate more efficiently — while showing the continued worth of their staff on the payroll amid the hype surrounding AI, legal operations experts, recruiters and in-house attorneys told Law360 Pulse.
And general counsel who choose not to embrace innovation this year risk falling behind the pace of their businesses, said Jennifer McIver, associate director of legal operations and industry insights at Wolters Kluwer ELM Solutions.
For example, they might struggle to maintain their role as a strategic partner, face strained relationships with law firms adopting AI and encounter challenges in attracting and retaining top talent.
"In 2026, general counsel will focus on balancing cost control with smarter operations, leaning on structured data and automation to better manage complexity," McIver said. "They should be leading the way in redefining both their own role and the role of outside counsel partners as AI and other advanced technology expand capacity, bringing more high-value work in-house."
Among the challenges that new technology will bring to general counsel in 2026 are those related to regulation and compliance. Various AI bills took shape within the past year, and keeping up with these and other new laws will be at the top of many legal chiefs' to-do lists.
In California, for example, Gov. Gavin Newsom in September signed the Transparency in Frontier Artificial Intelligence Act, which bolsters safety and disclosure requirements for AI companies. Lawmakers in California also recently approved legislation that would require companies to apply human oversight and notify workers when using AI tools to make employment decisions.
President Donald Trump in December signed an executive order establishing a "minimally burdensome national standard" for regulating AI to preempt state AI laws. But certain details and the timing of that measure remain uncertain.
"These types of laws and regulations are popping up throughout the country," said Eric Proos, a founding partner of fractional general counsel firm Next Era Legal. "If the company is using AI, then the GC will need to verify if the AI being used falls under the legislation, what their responsibilities are, how to handle it and what new processes or systems need to be put in place."
Around the world, AI and data laws have passed in regions including Europe, and those measures will affect the workload for some general counsel and their teams.
"That requires attention from us and a lot of research … and working with outside counsel and specialized counsel," said Eugenia Bergantz, general counsel at financial performance management platform Planful.
AI also touches on another concern that general counsel have for the year, which is related to continued pressure from the business to operate more efficiently.
It's not a new issue for general counsel, whose departments are often viewed by the company as cost centers, to operate on limited budgets and resources. But legal experts predict that top legal leaders will see increased pressure on keeping expenses flat as much as possible in the new year.
That might include being prevented from hiring additional lawyers for the department, keeping more matters in-house or looking into alternative outside counsel services to counter rising costs at traditional law firms, Bergantz said.
"I think there is a lot of pressure, at least for private companies, to cut general administrative [spending] overall," Bergantz said. "We're not a revenue-generating function per se, even though we're very much [a] revenue-supporting function."
The attention on AI and legal technology generally, as well as technology companies' promises of what the innovation can deliver, will present challenges for legal teams. In some cases, executive teams and boards have developed false perceptions that the technology currently available means general counsel should reduce staff.
But that's not the reality for most legal teams — at least not right now, as AI continues to mature.
The 2025 EY Law General Counsel study, released in April, found that disorganized data, the lack of data scientists and cost constraints hold some legal departments back from adopting advanced technology such as generative AI, which is capable of creating original content.
While more than half of the respondents in the study said their legal departments are still forming ideas about or experimenting with generative AI, only 25% said it's a high priority for the legal team.
Most legal departments plan to use generative AI in the future, but few are using it right now. According to the study, the most popular use of generative AI in legal departments is for legal drafting, but only 34% of respondents said they were doing this.
A separate survey — this one published in mid-December — revealed that more than half of the law department operations responders are still testing generative AI tools. Only 23% report that AI tools are fully operational and integrated in their legal departments. An additional 17% are actively exploring possibilities, but haven't tested anything.
Half of legal operations teams said evaluating and implementing generative AI use cases was their greatest current challenge. That was also cited as the top anticipated challenge for 2026.
Exacerbating the situation is the pressure to adopt these tools. Fifty-seven percent of survey participants said their AI strategy is driven by pressure from executive leadership, compared with just 13.5% who said they feel pressure from legal staff.
At Planful, Bergantz is focused on using AI to optimize efficiency, not to replace employees.
"Yes, it gives you some level of efficiency improvement, but it doesn't actually replace a full person," she said. "Sometimes it's difficult to explain that not everything we do is just redline contracts."
She added: "Sometimes you also want to get somebody on the phone. Sometimes you actually want to do a much more in-depth analysis."
Still, general counsel need to show that they add value — aside from the substantive legal skill set. What's the human element that clients will turn to you for?
"Increasingly, just being the technician who knows the substantive stuff is not going to cut it — because AI also knows the substantive stuff," said Sonya Olds Som, global managing partner leading the legal, risk and compliance practice group at executive search firm DSG Global. "AI has memorized more regulations than any human being ever could. AI is getting better and better at drafting memos and briefs."
Som noted that increasingly, lawyers need to show their value. She spoke with Law360 Pulse about how, as a law student and young associate, she did pretrial discovery document review that included Bates stamping, or using a device to give pages a reference number.
That skill is now obsolete.
"What is the value that you bring besides just your ability to do some things that may be able to become automated?" Som said.
With the continued advancement of AI in 2026, general counsel have the opportunity to bring more work in-house — specifically by making sure that the right technology is in place, along with people who are willing to embrace that innovation, McIver said.
A report published in October by the Association of Corporate Counsel and e-discovery platform Everlaw found that nearly two-thirds of in-house legal teams said they expected to rely less on outside legal service providers because of generative AI — an increase from 58% of survey respondents in the 2024 study.
In addition, 50% of respondents said they expected reduced outside counsel costs, the report found.
There has been a recent leap in technology with the emerging prevalence of agentic AI, such as AI agents. While generative AI models respond to prompts, agentic AI decides what to do next.
According to McIver, agentic AI will continue to free up general counsel and their teams to tackle improvements and initiatives they previously lacked the budget, expertise or time to pursue — and thus unlock efficiency and strategic projects that move the legal function forward.
"If you're not embracing the AI or understanding where it's going, you're going to miss out on that movement forward," McIver said.
She also predicted that AI will affect the relationships general counsel have with vendors in 2026.
In past years, most general counsel and chief legal officers haven't led their organization's relationship with legal technology vendors. But that will be different in 2026. According to McIver, general counsel will need to be more involved and understand the technology — and how specific innovation will move them forward.
"It's not going to be about the legal ops teams going out to events and finding the bright, shiny objects … that one small AI provider that can do one piece of the puzzle for the legal ops teams," McIver said. "I think that really what you're going to see is deeper relationships with vendors that are embedded, or the need to find new vendors that have that vision where you can grow with that vendor with your use of AI."
She added: "The GC diving in and understanding what their technology vendors are doing, how they're moving forward and how they can help the legal team to do so as well is going to be really important."
–Additional reporting by Hailey Konnath, Vin Gurrieri, Steven Lerner and Christine DeRosa. Editing by Karin Roberts.
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