SOURCE Axiom Global Inc.

Despite AI budget surges, only 1 in 5 legal departments report "AI maturity"; 58% of law firms not reducing rates and 33% charging more for AI-assisted work.

NEW YORK, July 9, 2025 /PRNewswire/ -- Corporate legal departments are rushing headlong into the AI revolution, increasing AI budgets an average of 33%, yet only one in five report "AI maturity," exposing a widening competency gap that's creating winners and losers at breakneck speed.

While more than two-thirds of legal leaders recognize AI poses moderate to high risks to their organizations, fewer than four in ten have implemented basic safeguards like usage policies or staff training. Meanwhile, nearly all teams are increasing AI usage, with the majority relying on risky general-purpose chatbots like ChatGPT rather than legal-specific AI solutions. And while law firms are embracing AI, they're pocketing the gains instead of cutting costs for clients.

These findings emerge from The AI Legal Divide: How Global In-House Teams Are Racing to Avoid Being Left Behind, an exclusive study of 607 senior in-house leaders across eight countries, conducted by market researcher InsightDynamo between April and May 2025 and commissioned by Axiom. The study also reveals that U.S. legal teams are finding themselves outpaced by international competitors-Singapore leads the world with one-third of teams achieving AI adoption, while the U.S. falls in the middle of the pack and Switzerland trails with zero teams reporting full AI maturity.

Among the most striking findings:

  • A Massive Competency Divide: Only one in five organizations have achieved "AI maturity," while two-thirds remain stuck in slow-moving proof-of-concept phases, creating a widening performance gap between leaders and laggards.
  • Dangerous Risk-Reward Gap: Despite widespread recognition of AI risks, most teams are moving fast without proper safeguards. More than half have implemented basic protections like usage policies or staff training.
  • Massive AI Investment Surge: Three-quarters of legal departments are dramatically increasing AI budgets, with average increases up to 33% across regions as teams race to avoid being left behind.
  • Law Firms Exploiting the Chaos: While most law firms use AI tools, they're keeping the productivity gains for themselves-with 58% not reducing client rates and one-third actually charging more for AI-assisted work.
  • Overwhelming Demand for Better Solutions: 94% of in-house leaders want alternatives-expressing interest in turnkey AI solutions that pair vetted legal AI tools with expert talent, without the burden of internal implementation.

"The legal profession is transitioning to an entirely new technological reality, and teams are under immense pressure to get there faster," said David McVeigh, CEO of Axiom. "What's troubling is that most in-house teams are going it alone-they're not AI experts, they're mostly using risky general-purpose chatbots, and their law firms are capitalizing on AI without sharing the benefits. This creates both opportunity and urgency for legal departments to find better alternatives."

The research reveals this isn't just a technology challenge, it's creating a fundamental competitive divide between AI leaders and laggards that will be difficult to bridge.

"Legal leaders face a catch-22," said C.J. Saretto, Chief Technology Officer at Axiom. "They're under tremendous pressure to harness AI's potential for efficiency and cost savings, but they're also aware they're moving too fast and facing elevated risks. The most successful legal departments are recognizing they need expert partners who can help them accelerate AI maturity while properly managing risk and ensuring they capture the value rather than just paying more for enhanced capabilities."

Axiom's full AI maturity study is available at https://www.axiomlaw.com/resources/articles/2025-legal-ai-report. For more information or to talk to an Axiom representative, visit https://www.axiomlaw.com. For more information about Axiom, please visit our website, hear from our experts on the Inside Axiom blog, network with us on LinkedIn, and subscribe to our YouTube channel.

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About InsightDynamo

InsightDynamo is a high-touch, full-service, flexible market research and business consulting firm that delivers custom intelligence programs tailored to your industry, culture, and one-of-a-kind challenges. Learn more (literally) at https://insightdynamo.com.

About Axiom

Axiom invented the alternative legal services industry 25 years ago and now serves more than 3,500 legal departments globally, including 75% of the Fortune 100, who place their trust in Axiom, with 95% client satisfaction. Axiom gives small, mid-market, and enterprise clients a single trusted provider who can deliver a full spectrum of legal solutions and services across more than a dozen practice areas and all major industries at rates up to 50% less than national law firms. To learn how Axiom can help your legal departments do more for less, visit axiomlaw.com.

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