Study: 80% of In-House Teams Plan to Bring Law Firm Work Back In-House - Morningstar

Study: 80% of In-House Teams Plan to Bring Law Firm Work Back In-House Study: 80% of In-House Teams Plan to Bring Law Firm Work Back In-House PR Newswire NEW YORK, Feb. 17, 2026 4 in 5 say rates are too high, while nearly two-thirds send work to law firms out of habit, not strategy NEW YORK, Feb. 17, 2026 /PRNewswire/ -- The legal services market has reached a "threshold moment," with over 80% of global in-house legal leaders planning to reallocate law firm work to their internal teams or alternative legal service providers (ALSPs) within the next two years. Three forces are converging to drive the change: rising law firm rates, near-universal AI adoption, and relentless pressure to improve operational efficiency despite budget increases. Yet a striking contradiction emerges: Despite clear frustration with law firm rates and intent to change course, 61% of departments continue sending work to law firms simply because "we have always done it that way." The finding reveals that legacy habits, not strategic choice, still drive legal spending for most organizations. These findings and more come from Axiom's 2026 GC Report: Beyond the Billable Hour, a global study of 516 senior in-house legal leaders (CLOs, GCs, DGCs, AGCs, legal ops) across eight countries, conducted by InsightDynamo and commissioned by Axiom to provide an impartial benchmark on the state of the legal services market. "We're seeing a fundamental reassessment of how legal work gets allocated," said Sara Morgan, Chief Revenue Officer at Axiom. "Law firm rates are up, AI is creating new possibilities for bringing work in-house, and Boards and CEOs are demanding better efficiency despite giving legal departments more budget. The combination is forcing GCs to change habits that have governed their outside counsel spend for decades." The research reveals four dynamics reshaping the legal services market: The Great Reallocation: A significant majority of global in-house legal leaders are planning to move substantial portions of law firm work to their internal teams or ALSPs within the next two years. Larger departments are leading this shift, with enterprise legal teams most aggressively reallocating work previously reserved for law firms. The Satisfaction Gap: In-house legal leaders are three times more likely to report "extreme satisfaction" with ALSPs than with traditional law firms, suggesting that comparable or superior talent quality at significantly lower cost is reshaping how legal departments evaluate their providers. The Inertia Paradox: While most legal leaders recognize ALSPs as viable alternatives for strategic legal work beyond gap fills and secondments, many organizations continue reflexively using law firms as their primary option rather than engaging ALSPs at scale, although this is rapidly changing. The AI "No Man's Land": While AI adoption is nearly universal, most teams have not scaled implementation beyond pilot programs, limiting returns on these investments. Teams remain stuck in transition, with the sheer number of providers and concerns about security and accuracy creating hesitation around full deployment. "This is a real opportunity for GCs and legal leaders to reassess what work is being sent to law firms and determine whether it can be done more efficiently and effectively in-house, through alternative providers, or by combining internal resources with ALSPs," Morgan said. "The question is whether we're crossing the Rubicon to a market where law firms are reserved for 'bet the company' work, while alternative providers handle the 'run the company' and 'grow the company' work. Legacy habits are difficult to break, but it's clear that the pace of legal transformation is accelerating." The 2026 GC Report: Beyond the Billable Hour is available at https://www.axiomlaw.com/resources/articles/gc-survey-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. Related Axiom News In-House Legal Teams Using ALSPs Cut Attrition Risk in Half, New Global Study Reveals Axiom Expands U.S. Client Advisory Board to 15 Members, Adding Eight Senior In-House Legal Leaders In-House Legal Teams Improve Productivity up to 75%, Save Millions with Axiom's AI Tech+Talent Global Study Finds Legal Departments Accelerating Shift to Value-Based Budgeting Axiom Achieves Highest Net Promoter Score for Legal Talent in 25 Years Axiom's Legal Talent Bench Now Features 850+ AI Lawyers and Legal Professionals New Research Reveals Dangerous Competency Gap as Legal Teams Fast-Track AI Adoption while Leaving Critical Safeguards Behind Axiom Expands Tech+Talent Portfolio with Legora for In-House Legal Teams In-House Legal Leaders Using 'Three Pillar' Strategy to Mitigate Uncharted Uncertainty  79% of In-House Legal Leaders Concerned About Elevated Risk Due to Unprecedented Regulatory, Policy, and Business Uncertainty Axiom Announces AI-Enabled Contracting Solution, Proven to Improve Efficiency of Contract-Related Legal Tasks by up to 60% Legal Career Paradox: Record Job Satisfaction, Stalled Career Growth Among DGCs About Axiom Axiom invented the alternative legal services industry 26 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. View original content to download multimedia:https://www.prnewswire.com/news-releases/study-80-of-in-house-teams-plan-to-bring-law-firm-work-back-in-house-302689807.html SOURCE Axiom Global Inc. The articles, information, and content displayed on this webpage may include materials prepared and provided by third parties. Such third-party content is offered for informational purposes only and is not endorsed, reviewed, or verified by Morningstar. Morningstar makes no representations or warranties regarding the accuracy, completeness, timeliness, or reliability of any third-party content displayed on this site. The views and opinions expressed in third-party content are those of the respective authors and do not necessarily reflect the views of Morningstar, its affiliates, or employees. Morningstar is not responsible for any errors, omissions, or delays in this content, nor for any actions taken in reliance thereon. Users are advised to exercise their own judgment and seek independent financial advice before making any decisions based on such content. The third-party providers of this content are not affiliated with Morningstar, and their inclusion on this site does not imply any form of partnership, agency, or endorsement. Plus, more updates on key AI companies. David Sekera, CFA and Susan Dziubinski May 11, 2026 Some asset classes tend to fare better than others when inflation is higher than average. Amy C. Arnott, CFA May 11, 2026 Plus: Cerebras’ IPO, the tech stocks leading the EM rally, unicorn concentration, and the April CPI. Tom Lauricella May 11, 2026 Wells Fargo and IBM are among the stocks that fell into undervalued territory. Bella Albrecht May 11, 2026 Undervalued by 19%, the stock of this industry leader is a buy today. Nicolas Owens May 7, 2026 Plus 21 more stocks under Morningstar's coverage with big dividend increases. Bella Albrecht May 7, 2026