Legal Departments Move From Testing AI to Governing It
For decades, the legal department was one of the last enterprise functions to adopt new technology at scale. The work was too nuanced, the stakes too high, and the profession too cautious. Generative AI changed the pace of experimentation. Agentic AI is changing the pace of deployment, and this week the Prompt Economy turns its […] The post Legal Departments Move From Testing AI to Governing It…
Legal departments are transitioning from experimenting with AI to overseeing its deployment, driven by the rise of agentic AI capable of independent decision-making. No longer just a testbed for technology, legal departments are now managing systems that can review contracts, monitor regulatory changes, and handle initial discovery with minimal human oversight.
Companies like Microsoft and Harvey are leading the charge, offering AI agents tailored for legal workflows. These agents can analyze documents, draft and edit contracts, and monitor compliance, but they also introduce new risks such as noncompliance, third-party harms, and errors that may outpace oversight mechanisms. To address these challenges, General Counsel (GCs) are turning to contractual protections, embedding AI addenda in vendor agreements to limit liability and specify legal obligations.
A recent survey by FTI Consulting and Relativity shows that 87% of corporate legal departments now utilize generative AI, up from 44% in 2025, with common applications including summarization, contract clause identification, e-discovery, and first-pass review of documents. This shift reflects a broader trend where GCs are now the key decision-makers in technology strategy, moving beyond skepticism to embracing AI as an integral part of their operations.
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