Legal Department Tech Budgets Set to Double by 2028, Driven by AI Adoption

The Rise of AI in Legal Operations

Gartner Inc. predicts a substantial increase in technology spending by legal departments, with budgets expected to double within the next two years. This surge is largely attributed to the growing adoption of specialized legal AI platforms. Tools like Harvey, Legora, GC AI, and Thomson Reuters CoCounsel are demonstrating significant gains in productivity and efficiency across various legal workflows. For internal audit, this trend highlights an evolving landscape where legal processes are becoming increasingly automated and data-driven, necessitating a deeper understanding of these new technologies and their associated risks.

Key Benefits and Transformative Impact

The integration of multi-agent legal AI applications is poised to deliver several benefits, including enhanced productivity, a potential reduction in the need for external legal services, and improved compliance. These platforms combine specialized and general-purpose AI agents to orchestrate complex legal processes, freeing up legal professionals to focus on strategic advice, risk management, and high-value client services. Internal auditors should recognize that these advancements can lead to more efficient legal operations, but also introduce new control considerations related to AI governance, data accuracy, and the reliability of automated decision-making.

Audit Considerations for AI-Driven Legal Functions

Gartner analysts have identified six key capabilities of legal AI applications that internal auditors should be aware of:

• Accelerated Legal Research: AI-driven natural-language queries can expedite research, especially when integrated with primary research databases.
• Faster Case Preparation and Litigation Support: Automation of document analysis and data-driven case assessments can significantly reduce administrative burdens.
• Automated Contract Review and Redlining: AI can apply playbooks, flag risks, and propose edits, streamlining contract management.
• Comprehensive Contract Analysis: Tools can identify nonstandard terms, liabilities, and key dates for real-time portfolio visibility.
• Accelerated M&A Due Diligence: Rapid categorization and assessment of large volumes of contracts and filings can compress review timelines.
• End-to-End Agentic Workflow Orchestration: Automation of multi-step legal processes from intake to drafting reduces manual handoffs.

By 2029, it's anticipated that 50% of contract reviews will be delegated to self-service systems, and 60% of legal departments will use AI-driven intake systems. This shift presents both opportunities and challenges for internal audit, requiring a focus on validating the effectiveness of AI controls, ensuring data privacy and security, and assessing the accuracy and bias of AI outputs to maintain robust governance and compliance frameworks.