How AI Can Reduce Legal Department Costs and Drive Efficiency in 2025

Cutting costs and reducing legal spend has been a top priority for General Counsels and legal teams for many years. At the same time, legal departments are facing an upward regulatory trajectory due to an unprecedented rulemaking agenda for 2023-2024 in the US and other major jurisdictions. This increasing demand requires more time and effort to ensure compliance.

To navigate these challenges effectively, General Counsels and legal departments are turning to legal technology for enhanced efficiency and compliance automation. Below, we explore the key challenges faced by legal teams and how AI can help reduce legal department costs.

The Costs of Ignoring AI in Legal Operations

While artificial intelligence in legal operations is not a novelty, many legal departments continue to rely on outdated technologies, such as shared drives, spreadsheets or legacy software. In the absence of workflow automation in legal departments, General Counsels and legal teams inevitably have to put more time and effort into meeting increased expectations from regulators, which drives up legal costs.

The consequences of neglecting compliance automation and AI in legal departments include:

• Inefficiencies and Increased Costs: Manual processes and repetitive tasks significantly increase the time and costs associated with ensuring compliance.
• Data Decay: With corporate records decaying at approximately 30% per year, compliance teams struggle to maintain accurate and up-to-date corporate data.
• Lower Quality of Compliance: A lack of automation heightens the risk of human error, leading to inaccuracies and data gaps.
• Risks of Non-Compliance and Penalties: The deterioration of corporate records increases the risk of non-compliance and associated penalties.

Key Cost-Saving AI Tools for Legal Departments

At the same time, introducing compliance automation and AI into legal processes allows in-house counsel to significantly increase their capabilities without adding more person-hours. 

Today, legal departments have access to a number of cost-saving AI tools for various applications in litigation, contract and transaction work, analyzing legislation and entity management.

AI-Assisted Document Review 

By leveraging AI, in-house counsels can quickly assess large datasets, categorize documents for relevance and privilege, identify essential terms in contracts, and analyze transactions in minutes instead of hours or days.

AI Summarization Tools

Organizations with heavy compliance requirements across multiple jurisdictions utilize AI for instant summarization, enabling them to analyze existing and emerging regulations and extract critical information for legal assessment.

AI-Powered Entity Management

In the realm of entity management, AI offers multiple applications that save time and costs in maintaining legal entities. Tools like Athennian's Centralize and Initialize streamline entity creation, reduce filing times, and automate manual processes for greater efficiency and cost savings.

Measuring the ROI of AI in Legal Operations 

Adopting an ROI-focused approach enables legal departments to shift AI from a luxury to a necessity. By quantitatively assessing the impact of AI on legal operations, General Counsels and their teams can advocate for broader adoption across their organizations, further driving efficiency and reducing costs. 

Specifically, compliance automation and AI can yield measurable improvements on legal workflows such as:

• Reduction of Entity Creation Time: Legal teams leveraging Athennian's AI-driven Initialize tool can reduce entity creation time from 45 minutes to under 10 minutes per entity.
• Automation of Document Filing: Legal departments implementing AI-based tools, like Athennian's Centralize, report a 90% reduction in document filing time.
• Automation of Data Entry: Workflow automation powered by AI saves hundreds of hours annually in legal departments through automated data entry.

How Can Legal Departments Stay Competitive with AI?

In the corporate legal sector, AI not only cuts costs but also enhances a legal team's ability to master governance and efficiently manage compliance. To remain competitive in a rapidly changing regulatory landscape, legal departments must monitor AI trends and implement best-in-class technology solutions that ensure data integrity and drive efficiency within their organizations.

Many global companies and leading law firms have already begun to incorporate cost-saving AI tools into their legal teams. Organizations across various industries are utilizing workflow automation to improve contract management, conduct regulatory reviews across jurisdictions, optimize due diligence for M&A, and streamline entity management.

Reduce Legal Department Costs with AI Capabilities

Organizations that leverage Athennian's AI-based tools, such as Initialize and Centralize, can significantly reduce their legal spend and cut down the time required for entity management, corporate records maintenance, and compliance across all entities. 

For more information on how Athennian can help your legal department lower costs and enhance efficiency with AI, please contact us to schedule a free demo.