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Legal budgets are expanding in 2027, yet the gains are being consumed by compensation costs, escalating law firm fees, and unfunded AI initiatives. In-house legal teams face a paradox of growth without capacity, forcing strategic pivots toward insourcing, alternative legal service providers, and adaptable operational frameworks designed for sustained performance.
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Legal budgets are growing in 2027, but compensation costs, rising law firm fees, and unfunded AI mandates are absorbing the increases just as fast. Most teams are running to stay in place—not gaining capacity—pushing them toward insourcing, ALSPs, and flexible operating models built for the long haul.
The report is based on a survey of 510 in-house legal leaders and CFOs—400 GCS and CLOs plus 110 CFOs—across six countries, all from companies with $250M+ in annual revenue.
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