External Impact on Legal Spend

“Ongoing shifts in regulations and compliance requirements are a critical factor. Changes in government policy or processing timelines will significantly impact our organization's need for legal advice to ensure compliance and to navigate any disruptions.”

Construction Company

Clients were asked to identify multiple considerations that would have the greatest impact on their need for legal advice going forwards.

One in three clients noted internal and sectoral concerns would be the main driver, though a significant number cited external pressures, including US and global elections, economic policy, and anticipated legislative changes, as key reasons to hire outside law firms.

Fig 2. Over the next 12 months, which external factors will have the greatest impact on your need for legal advice?
Clients could mention up to three factors with responses grouped into the wider themes shown on the chart below.

Interest rates and economic volatility are severely affecting many businesses. As these put a strain on corporate capital structures, strong legal counsel will be needed to work out difficult situations."

US Consultancy Firm

Bankruptcy responses frequently cited economic instability, interest rates, and market volatility as drivers of legal need.

Telecom and Media & Entertainment raised concerns about policy shifts and regulatory reform, especially in response to technological change and political transitions.

Private Equity and Corporate Finance respondents often linked economic conditions to deal flow and credit availability, with some regulatory concerns tied to fund structures.

Insurance and Environment sectors were more focused on regulatory pressures, including compliance, oversight, and legislative changes.

The AI Effect

Key Takeaways

Internal Pressures
The biggest drivers leading in-house counsel to select external law firms remain sector- and client-specific. In a year of multiple elections around the globe, clients also highlighted legislative and regulatory fallout as key.

AI
Corporate America’s embrace and adaptation of AI tools is driving clients to law firms, as they seek to investigate new possibilities, while also complying with a patchy regulatory framework and existing privacy and intellectual property statutes.

As the explosion of AI tools continued rapidly through 2025, clients cited new technologies as a key issue driving them to seek expert advice.

Disparate international efforts to regulate the use of AI, alongside a maelstrom of data privacy, intellectual property, and anti-discrimination concerns, have led clients to boost their internal compliance and risk policies, creating more demand for expert external counsel.

AI-related regulatory changes are likely to have a considerable impact on our organization’s legal needs. We’ll likely need advice on staying ahead of compliance, data privacy, and potential liability issues as AI governance continues to evolve."

Leading HR-Tech Company

Use of AI will lead to unreasonable reliance on data that is not fully vetted. Legal risks and impacts of such reliance will become a bigger issue."

National Construction Firm