In-house legal teams expected to gain more work, says report

In a balance of pros and cons, this trend is going to mean an influx of additional work for in-house teams, which will be great if they have the staff and resources for that, or stressful if it means a doubling of workload for the same number of staff. For private firms that are recipients of contracted work for major companies and government departments that have plans to pull back on external dependency, it’s not a good news day. That said, if the work being outsourced is largely administrative, and in lieu of such work, firms are instead receiving more complex and time-consuming tasks, there may be a silver lining.

The 2026 Axiom Beyond the Billable Hour report indicates this is a global shift. Over 500 general counsel and senior legal executives were surveyed, representing eight countries, including Australia.

In her introduction to the Axiom report, Chief Revenue Officer Sara Morgan said: “The data reveals a market at a threshold moment. While 61 per cent of departments still send work to law firms because ‘we have always done it that way,’ over 80 per cent plan to move certain law firm work in-house or to alternative providers within the next 24 months. Meanwhile, 52 per cent say law firm pricing is very close to or already too high to justify the cost … In-house leaders now have choices that weren’t available 18 months ago. AI and legal tech are enabling teams to do more in-house and to partner strategically with providers beyond traditional law firms.”

The changing tide is a consequence of increasing law firm rates, a greater drive from leadership and/or shareholders to improve efficiency, and the established efficacy of alternative legal delivery models. In the interests of recognising impartiality, Axiom offers ALSP services, which typically include technology-driven, specialised services such as contract management, document review, and litigation support.

Alex Rees is Director of In-House Legal at Montgomery Advisory. Prior, she was a Senior Associate at Clayton Utz in Sydney for nearly 20 years until late 2019. She says her experience echoes the sentiment of the report, that in-house legal is firing on all cylinders.

“The hiring by our clients has definitely picked up and their in-house legal teams are growing. This year, in particular, has started at a very busy pace.”

The Axiom survey found that, rather than just the administrative work, it’s also more complex work that in-house teams now intend on assigning in-house or using technology-driven solutions to complete.

“In-house lawyers today are often top-performing lawyers from private practice who are interested in working closely with the business and playing a more strategic, commercial role. Consequently, these in-house lawyers are retaining more of the challenging work in-house. In fact, it can sometimes be the volume work they are outsourcing,” says Rees.

In terms of what clients are seeking from the recruitment process for in-house lawyers, Rees says, “It’s varied, but the seven-to-10 year level is probably the most highly sought after level for lawyers in-house. In-house teams are increasingly becoming an even more integral and highly valued part of the business. The depth and reach of the General Counsel role is growing, with many assuming responsibility for risk and governance functions in addition to their legal role.”

Previous surveys indicate that most in-house legal professionals in Australia are women aged 40 and above, who have 11+ years’ experience.

“I think the demographics are changing,” reflects Rees. “I am currently dealing with just as many males as females who are in-house already or wanting to make the move in-house.”

She adds “In-house legal teams are often high performing teams and work incredibly hard. They don’t have timesheets, which for most is a plus but it is certainly not a light option! Having said that, in-house lawyers often have more control over their hours than private-practice lawyers do. As with private practice, some in-house teams are wanting their lawyers in the office more regularly, often four days per week, but there are still some organisations providing more flexibility in this regard. Depending on a lawyer’s personal situation, this will drive their need or desire for flexibility.”

Adam Hall is the Chief Marketing Officer at Bartier Perry, and he has worked in law firms for decades.

“Our client base is made up of a mix of in-house legal through to [clients with] no full-time legal representation at all. Clearly, where there is no representation, Bartier Perry often performs an outsourced role. Equally, with in-house teams, the work mix they send to us varies from overflow to needing specific expertise not found in-house. We have not seen much of a change as yet in the mix of work sent to us.”

Alongside Lawyers on Demand and Lawcadia, Axiom is amongst the key players in the Alternative Legal Service Providers. However, private firms are also introducing their own branches, including Herbert Smith Freehills Kramer’s ALT practice. According to Thomson Reuters’ Alternative Legal Services Providers 2023 Report, ALSPs have grown at pace, and are now turned to by traditional law firms, if not becoming part of them. While some private firms dispute the extent and reliability of such services, the Reuters and Axiom reports provide good reason for those same firms to consider their own ALSP offering.

Nonetheless, this report aligns with findings of Richard W Smith of GSJ Consulting, a Sydney-based strategic consulting agency. In January, Smith claimed that the Australian legal market is “K-shaped”. An economics term, “K-shaped” refers to circumstances where different segments of an economy move in opposite directions simultaneously. The upward arm of the “K” indicates growth and opportunity. The downward arm indicates stagnation or decline. One of the key pressures dividing those firms and in-house departments between upward and downward trajectories is the ability to be versatile and efficient.

For in-house teams particularly, the pressure from clients to “demonstrate value, manage budgets and align legal spend with broader organisational goals” in addition to scrutiny of procurement functions, are leading to a tightening of budgets for outsourcing work. According to Smith, “rates are benchmarked, discounts are expected, and deviations require justification.”

In September 2025, recruiters Dovetail Law found that 53 per cent of the 16,500 in-house lawyers in Australia were located in Sydney, most are female (63 per cent), and most are senior lawyers (64 per cent have 11+ years’ experience post-qualification).

Nonetheless, in-house lawyers make up 17 per cent of the 97,500 Australian lawyers in 2025 while private practice lawyers represent the lion’s share of the workforce at 64 per cent.

Dovetail Law found that between 2014 and 2024, the number of in-house lawyers had increased by a substantial 57 per cent. This surge was led by NSW, representing over half (52 per cent) of the in-house legal workforce.

View from the ground is mixed

A spokesperson for the Department of Planning, Housing and Infrastructure told LSJ Online:

“The Department has a long history of preferring to perform work in-house, outsourcing only where necessary. We believe this ensures the best outcomes for the Government, as well as providing compelling career pathways for lawyers working in the public service. The NSW Government has implemented policies for agencies to have core work undertaken by public servants, rather than outsourced to external companies and consultants – including legal services.”

Bartier Perry’s Hall says, “ While the report tends to suggest a binary position between AI, tech and ALSP offerings, a point closer to the reality of the current market situation is that all entities (including more traditional firms), and especially those agile and transformative enough to embrace the change that comes with emerging technologies, are arming themselves with similar toolkits.”

Ultimately, he adds, “The responsibility for all output rests clearly with lawyers, and we can’t see tech-driven solutions replacing human understanding, empathy, and judgment anytime soon.”

Where in-house legal teams might not have the people or expertise, private firms often get called upon to respond in unforeseen circumstances that may require an urgent solution, or niche expertise that isn’t available in-house.

Hall says, “With the rise of legal specialisation, some in-house teams manage the risk of particularly nuanced or complex situations by outsourcing to legal specialists in that area and we can’t see that changing.”

Rees says that for lawyers who are in-house already, and wanting to consider the next step, it maybe helpful to upskill.

“The Australian Institute of Company Directors (AICD) courses, particularly the Company Director’s Course, are well regarded and useful for in-house lawyers, providing significant benefits for career development, commercial understanding, and governance expertise. General Counsels roles often also include company secretarial responsibilities. For private practice lawyers, looking to make a move in-house, it’s always well received when the candidate has had secondment experience. Moving in-house is a significant change from the way private practice operates and there is a natural learning curve. Undertaking a secondment provides you with an introduction to this environment.”