A daunting mix of policy, economic, business and tech changes are hitting legal departments at once, creating challenges for in-house leaders on par with those spurred by the Great Recession of 2008 and the onset of the COVID-19 pandemic five years ago.
That was a central finding of “Mobilizing for Uncertainty: How In-House Legal Leaders Are Responding to 2025’s Policy, Economic, and Business Shockwaves,” a study released this week by the on-demand legal services provider Axiom.
Axiom commissioned InsightDynamo to survey 205 U.S. in-house legal leaders between Feb. 25 and March 2 on policy, economic and business uncertainty, and how they’re responding.
Ninety-eight percent or respondents say they’re increasing their legal department budget in 2025, with one-quarter doing so by more than 25%, and nearly half by between 10% and 25%. Just 2% of respondents had flat budgets or budget decreases.
“This brew of unanticipated international trends and converging events is compelling legal teams to refresh their 2025 strategies—all with a sharp eye on expediting transformation to fuel responsiveness, agility, and budgetary efficiency and effectiveness,” the report said.
The study identified the top three “shockwaves” adding to legal department workloads as DEI changes, AI regulation and compliance, and data privacy and cybersecurity. President Donald Trump’s name does not appear in the 22-page report, though some of legal departments’ biggest pain points stem from Trump initiatives, including his crusade against DEI and his imposing of trade tariffs.
The report casts all the mayhem as both a challenge and opportunity for legal departments, giving them the leverage to push through funding for initiatives they’d otherwise have to roll out more slowly.
“This unprecedented mobilization is both a defensive measure against immediate market risks, plus an opportunity to put the pedal to the metal on transformation initiatives that may have been on a slower path prior to the current administration,” the report says.
Forty-eight percent of respondents said implementing legal tech was the top way they were responding to their swelling workloads, while 42% said they were increasing outside counsel spending, 41% said they were turning to alternative legal services providers, and 37% were adding full-time staff.
“The survey data presents a clear picture of the current legal landscape,” said Ashlin Quirk, general counsel of Axiom. “We’re observing a pragmatic response across the profession. What’s particularly noteworthy is not just the substantial budget increases—but how those funds are being allocated.”
Seventy-nine percent of respondents said their company’s legal risks have risen, and 74% said they’re concerned about maintaining effectiveness as the pace of change increases.
For of five respondents characterized their company’s legal risks as moderate to extremely high, though just 7% characterized them as extremely high. At the same time, just 6% characterized them as extremely low.
One challenge for legal departments is they tend to be thin in expertise in areas that pose the greatest threats. For example, 58% of respondents said their departments lack sufficient data privacy and cybersecurity expertise, and 50% said they lacked sufficient AI expertise.
Sixteen percent of respondents said their legal departments already are less effective because of the increase in demand. That sentiment is especially strong at smaller legal departments, those with 10 or fewer employees. where 29% of respondents reported that they can’t keep up with change.
Fifty-eight percent of respondents identified business unit satisfaction as their most important metric to measure success. Second was risk mitigation effectiveness (57%) and third was cost management (52%).