We’re now two years into the generative AI era and so far this supposedly revolutionary technology has mostly delivered bad middle school term papers and embarrassing lawyer stories. Which isn’t to say the technology can’t perform useful, time-saving tasks, it’s just that — barring a fundamental breakthrough like fusion energy or quantum computing — AI’s potential upper bound isn’t “replacing lawyers” as much as “processing transcripts faster.” It’s time to rejoice in AI’s amazing but mundane capabilities rather than pine for free intellectual labor that won’t hallucinate like it’s on the brown acid.
And this goes double for the non-lawyers that in-house legal teams have to keep in line.
The latest General Counsel Report 2025 from FTI Consulting and Relativity confirms that two years into this, in-house lawyers remain largely unprepared for the risks posed by generative AI.
Part of this isn’t their fault. AI is moving rapidly and users are working just as fast creating headaches. The volume of queries people make of consumer-facing AI toys have skyrocketed with one firm reporting 32,000 hits in a week. And that’s a law firm! Multiply that usage rate out across a multibillion dollar corporation. No matter how hard lawyers try to direct users to products with real security and guardrails, a new product will arrive with the security integrity of a wet paper bag to upset that guidance.
In interviews, 85 percent indicated they are minimally or not at all prepared, a slight improvement from the prior year’s total of 93 percent. Additionally, generative AI was the only topic where not one of the participants assigned a four or five out of five for their AI readiness (on a one-to-five scale of not at all prepared to very prepared). At that rate, in-house lawyers won’t be prepared until just before Trump’s fifth term.
Another obstacle to preparedness is the lack of consensus over exactly presents the biggest problem:
Loss of jobs at the bottom. Never change corporate America!
“Security” and “Data Privacy” are separate but overlapping issues when it comes to AI. But worse, these challenges aren’t limited to AI usage. A staggering 65 percent of GCs say they’re not prepared to deal with securing all the emerging data sources under their roofs like collaboration apps, cloud storage, and linked content.
Some respondents also reported increases in data breaches (21%) and privacy violations or notifications (18%). These figures varied somewhat from the 2024 report, when 38% and 21% noted increases in breaches and privacy violations, respectively. Data privacy and DSARs were also ranked as the second and third highest issues causing disputes and investigations, listed as a primary driver by 33% and 29%, respectively.
While employees are probably exposing data or avenues into the company systems in a variety of ways, feeding confidential client data to an AI model headquartered somewhere between Shanghai and “Gee, Wouldn’t You Like To Know” adds a whole new level of risk.
Put more bluntly, one respondent said, “I am scared $h!+less that if we are audited, we will be found non-compliant because of how employees or patients transmit data.”
Earlier: New GC Report Details All The In-House Concerns That Ceased To Matter Around, Say, Inauguration Day
Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter or Bluesky if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.
The post AI Delivers Fresh Nightmares For In-House Counsel appeared first on Above the Law.
We’re now two years into the generative AI era and so far this supposedly revolutionary technology has mostly delivered bad middle school term papers and embarrassing lawyer stories. Which isn’t to say the technology can’t perform useful, time-saving tasks, it’s just that — barring a fundamental breakthrough like fusion energy or quantum computing — AI’s potential upper bound isn’t “replacing lawyers” as much as “processing transcripts faster.” It’s time to rejoice in AI’s amazing but mundane capabilities rather than pine for free intellectual labor that won’t hallucinate like it’s on the brown acid.
And this goes double for the non-lawyers that in-house legal teams have to keep in line.
The latest General Counsel Report 2025 from FTI Consulting and Relativity confirms that two years into this, in-house lawyers remain largely unprepared for the risks posed by generative AI.
Part of this isn’t their fault. AI is moving rapidly and users are working just as fast creating headaches. The volume of queries people make of consumer-facing AI toys have skyrocketed with one firm reporting 32,000 hits in a week. And that’s a law firm! Multiply that usage rate out across a multibillion dollar corporation. No matter how hard lawyers try to direct users to products with real security and guardrails, a new product will arrive with the security integrity of a wet paper bag to upset that guidance.
In interviews, 85 percent indicated they are minimally or not at all prepared, a slight improvement from the prior year’s total of 93 percent. Additionally, generative AI was the only topic where not one of the participants assigned a four or five out of five for their AI readiness (on a one-to-five scale of not at all prepared to very prepared). At that rate, in-house lawyers won’t be prepared until just before Trump’s fifth term.
Another obstacle to preparedness is the lack of consensus over exactly presents the biggest problem:
Loss of jobs at the bottom. Never change corporate America!
“Security” and “Data Privacy” are separate but overlapping issues when it comes to AI. But worse, these challenges aren’t limited to AI usage. A staggering 65 percent of GCs say they’re not prepared to deal with securing all the emerging data sources under their roofs like collaboration apps, cloud storage, and linked content.
Some respondents also reported increases in data breaches (21%) and privacy violations or notifications (18%). These figures varied somewhat from the 2024 report, when 38% and 21% noted increases in breaches and privacy violations, respectively. Data privacy and DSARs were also ranked as the second and third highest issues causing disputes and investigations, listed as a primary driver by 33% and 29%, respectively.
While employees are probably exposing data or avenues into the company systems in a variety of ways, feeding confidential client data to an AI model headquartered somewhere between Shanghai and “Gee, Wouldn’t You Like To Know” adds a whole new level of risk.
Put more bluntly, one respondent said, “I am scared $h!+less that if we are audited, we will be found non-compliant because of how employees or patients transmit data.”
Earlier: New GC Report Details All The In-House Concerns That Ceased To Matter Around, Say, Inauguration Day
Joe Patrice is a senior editor at Above the Law and co-host of Thinking Like A Lawyer. Feel free to email any tips, questions, or comments. Follow him on Twitter or Bluesky if you’re interested in law, politics, and a healthy dose of college sports news. Joe also serves as a Managing Director at RPN Executive Search.
