Retail legal departments face a familiar squeeze: more work, tighter budgets, and little room to grow headcount. That’s the setup. What comes next is a shift toward smarter, cost-conscious tools. AI is stepping into that role.

1. Demand Climbing, Staffing Falling Behind

The pressure is clear. About 75% of retail legal teams say they see an uptick in demand, but only 15% expect to hire more lawyers, a sharp drop from 31% last year. Budgets tell a similar story. Only about a third expect to get more funds for legal work; that’s down from 62% last year. 16% anticipate budget cuts. The result? Legal teams must do more with less.

2. Self-Service, Smarter Workflows

Lawyers are pushing work upstream. Over half of the companies (56%) now offer “self-help” tools such as checker templates or FAQ pages to reduce routine requests. That’s a 20-point lift over last year. Some raise contract review thresholds so that only higher-value matters need legal eyes.

3. Rethinking Outside Counsel Costs

Using outside law firms still happens, but fewer teams want to pay for it. 43% rely more on outside counsel, yet that’s down by about 12 points from a year ago. To rein it in, they consolidate the number of firms they work with, negotiate fees, and ask for flat-rate pricing.

4. Automating Repetitive Tasks

AI and automation aren’t just trendy, they are vital. Nearly 29% of retail legal teams now automate recurring tasks. Meanwhile, 35% shift simple legal matters to other internal departments.

5. Legal Tech Adoption Climbs

Technology is no longer optional. AI-powered tools are everywhere. 70% of teams now use contract lifecycle management software, an increase of 22 points over last year. Electronic billing is in use at 58% of teams. Legal teams also rely more on e-discovery tools and tech for managing documents, patents, trademarks, and soliciting bids.

What This Means

Pressures aren’t easing. Yet legal teams are adapting. They are wisely investing in tools that shift routine tasks out of lawyers’ hands, freeing them to focus on more complex work. The strategy combines self-service, smarter staffing, and better tech. Legal teams are finding ways to deliver more, despite fewer people and tighter budgets.