Corporate general counsel are focused on defining the value of their teams and communicating that value to the broader business, while also balancing their needs for greater cost control and meaningful adoption of technology and talent development
The demands placed on today’s corporate law departments are perhaps more challenging than ever before. In addition to confronting a host of new issues brought on by the rise of generative AI (GenAI), corporate general counsel (GCs) must balance increasing matter volumes, flat or decreasing budgets and headcount, and a need to focus on delivering greater value to the business.
To examine this more closely, the Thomson Reuters Institute has published The 2025 State of the Corporate Law Department Report, offering a comprehensive analysis of the current trends and challenges faced by GCs. This report, based on interviews with more than 2,400 corporate GCs, delves into the concept of value and its multifaceted role in today’s corporate legal environment.
The quest for value
The term value has become a frequent buzzword in the corporate legal world. In fact, the idea of value was mentioned three times as often during interviews for this year’s report as it was just 12 months ago. GCs are increasingly focused on the value that their law departments bring to the business and are continually evaluating how they can work efficiently and effectively to meet the rapidly evolving needs of their organizations.
This emphasis on defining and delivering value fits quite well with the widely accepted framework of the four key areas of focus within today’s corporate law department:
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- Effectiveness: Creating operational value — GCs must ensure that they add value through the quality of their legal advice and interactions with stakeholders. This involves having the expertise to meet challenges and providing operational advice that’s aligned with the strategic goals of the business.
- Efficiency: Capturing greater value for money — Efficiency is about serving the business’s needs in a cost-effective manner. GCs are increasingly focused on cost control and leveraging technology, particularly AI, to enhance efficiency.
- Protection: Safeguarding business value — Protecting the business’s value involves managing risks, regulatory compliance, and safeguarding assets and competitive advantages. Today’s GCs must navigate a complex and frequently shifting regulatory landscape while anticipating emerging risks.
- Enablement: Generating greater value for the business — GCs can enhance their businesses’ value by aligning their legal functions with companies’ vision and mission. This includes providing strategic advice, fostering relationships with law firms, and leveraging AI to improve efficiency — all with the goal of meeting the needs of the current quickly and effectively.
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Aligning with organizational priorities
To optimally serve their companies, the legal functions’ goals and priorities should be in alignment with that of their broader companies, especially around vision, priorities, and values. Corporate C-Suite officers themselves are focusing on building operational efficiency, and 20% of them said that cost control is a key priority. GCs largely share that focus; and in fact, cost control is the top strategic priority for GCs in the United State, the United Kingdom, and Canada.
For many GCs, the emphasis on cost control also means an increased focus on delivering value-based services, value-based billing, and value-added advice to positively impact the bottom line. For example, many GCs said they are looking to reduce expenses by bringing more work in-house and leveraging alternative legal service providers (ALSPs). The report also highlights the increasing expense of working with outside law firms and the need for GCs to find more cost-effective solutions.
Indeed, one key strategy for controlling outside counsel costs that many GCs are hoping will help them achieve their goals is a greater emphasis on value-based billing or alternative fee arrangements (AFAs). Almost two-thirds (61%) of GCs said that increasing the use of AFAs is a medium- to high-priority over the coming 12 months, and they place the responsibility for developing those alternative pricing models on their outside counsel.
Technology as a driver of efficiency
The report also notes that GCs are investing in technology to drive greater efficiency and capacity within their departments. This includes improving the quality of work, bringing more work in-house, and leveraging AI to enhance operational efficiency. One-third of GCs said that they anticipate an increase in their overall technology spend in the coming year with the primary goal of that investment being an increase in their operational efficiency. In fact, GCs said that this will not only increase the capacity of the in-house legal team to absorb more work and thereby reduce outside counsel costs, but it will help GCs achieve the efficiency goals set by their C-Suite.
Building talent for future effectiveness
GCs also are identifying new skills and roles needed to meet the changing reality of legal work. This includes recruiting AI-specialist legal professionals, cybersecurity experts, and AI developers. GCs must balance technology adoption with professional skill development to find the best way to meet an AI-driven future.
Defining and delivering value
A key final consideration in the discussion of value centers on the idea that the quality of the legal advice from the legal function and the efficiency with which it operates cannot exist in a vacuum. Indeed, the law department must always keep its focus on how it protects the business from risk, thereby safeguarding the value of the overall business. In this way, the law department can better enable the growth of the overall business and improve the company’s ability to create new value for its ultimate customers.
“The goal for corporate law departments in 2025 should not be to develop a definition of value for its own sake,” the report states. “Rather, GCs and their teams should use 2025 to develop the mechanisms for determining what they value in a way that those same mechanisms can be applied as needs and goals evolve.”
You can download a copy of the full 2025 State of the Corporate Law Department Report here
