More than half of US in-house legal teams that use outside law firms say AI has already cut the work they send out, according to a survey published on 20 October by Everlaw, which sells AI software for litigation, and Wakefield Research.
The survey of 300 US in-house legal professionals, carried out between 26 June and 30 July 2026, found that 86% use generative AI for legal work and 37% use it extensively. Of those whose departments use outside counsel, 54% said AI had already reduced the volume of work sent to firms, and another 44% expected that within a year. Among the heaviest users, 73% were already sending less work out.
Respondents also expect billing to change. Some 81% expect outcome-based pricing to overtake the billable hour within five years, and 60% expect lower fees or fewer billed hours from firms that use AI.
The worries are real too. Eight in ten are concerned about errors, 63% fear that leaning on AI could erode legal skills, and one in three have come across AI-hallucinated evidence or case law: 17% from opposing counsel and 12% from their own teams.
The figures are self-reported, and the survey was run for a company that sells legal AI tools. Its margin of error is plus or minus 5.7 percentage points.
Source: Everlaw, The In-House Innovation Report (press release via Business Wire)