If you are looking for a sector that challenges the “disrupt or be disrupted” mantra that keeps business leaders awake at night, it would be hard to top law. Talk of transformation sits uneasily in a profession focussed on statutes, precedent and legal principles, but there are signs that change is coming. 

While the highest-paid legal eagles continue to fly high above cost-cutting agendas that drive change, the squeeze is definitely on for in-house legal teams. Their mid-to-high level workloads, like contract law and regulatory compliance, are coming under far greater scrutiny. 

Other industries might wonder why it’s taken so long. Sectors like retail or financial services have responded to disruptive competitors by embracing outsourcing and new technologies, using them to run low-value tasks, and freeing up in-house resources to focus on higher-value work. Legal departments have reasons to be suspicious of both.  

With managed services, there is a trust issue – understandable in a sector where ethical responsibility and confidentiality are paramount. Any third party hoping to provide legal services – even the lowest of low-hanging fruit – must be able to mitigate risks around the exposure of confidential information.

When it comes to technology, there’s a long-standing wariness in the profession. The 2024 Thomson Reuters State of the Corporate Law Department survey found that they are higher on aspiration than delivery – 90 per cent report only slow to moderate progress in adopting new tech, and only 32 per cent anticipate an increased legal tech budget.

Outsourcing services

There is strong evidence, however, that attitudes to both outsourcing and technology adoption are shifting. A new breed of specialist third parties, Alternative Legal Service Providers (ALSPs), are ticking boxes around trust and fulfilling a role for legal teams that want organisational transformation. 

According to the 2025 Thomson Reuters survey of ALSPs, 57 per cent of corporate law departments rely on them for a range of services, from flexible resourcing to eDiscovery and litigation support. Cost and access to specialist expertise are the primary reasons why they turn to them, but not everyone is convinced.  

The report identifies a real split, with a significant number of law firms and in-house legal teams yet to use ALSPs, and with no plans to do so. It notes that “while some firms are expanding their use of ALSPs to enhance their service offerings, others remain committed to traditional models”. The existential question faced by many businesses is now being asked in the legal sector: “Am I a leader or a laggard?” 

Adopting technology

The arrival of generative AI looks likely to spark another sea change, attracting an appetite for new technology that is unusual in the sector – 42 per cent of respondents to the Thomson survey said that they expect AI to transform the legal profession. This is because they see generative AI as a path to relatively straightforward process change, increasing efficiencies without the pain of complex technology implementations. 

Interestingly, the same survey suggests the adoption of generative AI is another good reason to engage with ALSPs: 35 per cent of law firms and 40 per cent of corporate law departments believe that ALSPs are leaders in generative AI, more attractive, and better able to streamline processes, cut costs and create competitive advantage. While a large cohort of the sector are ready to embrace AI, it seems that many would prefer somebody else to deliver the benefits for them. 

What’s clear from the research is that there is a greater willingness than ever before to unlock time and money savings in the sector. It’s more likely to happen in a company’s legal office than a standalone law firm, because the same companies are already pursuing cost-cutting measures. Global companies now want their legal teams to be as circumspect about value as other parts of the business.

Adding value 

When firms embark on an enterprise-wide efficiency drive and look into every corner of the business for value, it’s clear that legal departments are a cost centre, not a revenue generator. To achieve the business adage, “what gets measured gets managed”, firms must centralise their legal operations and begin to impose metrics and KPIs on key processes. 

For multinationals with in-house departments managing legal affairs across different territories, the ability to measure and control costs is an even bigger challenge, particularly if they try to do it internally. Disparate teams handling contracting or compliance are often working in silos, making it hard to centralise processes, which in turn makes it difficult to measure inefficiencies and identify metrics for improvement. 

All of this points to increasing adoption of legal service providers, particularly those that leverage technology and have the ability to scale. Outsourcing is a double win for in-house legal departments that have woken up to the stark realisation that it’s better to be a leader than a laggard. They can redefine their role and seize the opportunity to become a value driver rather than a cost base.

Dan Fox is a qualified barrister and CEO of Johnson Hana, a legal services provider. This article has been produced in association with Johnson Hana and is partner content.