A new report from the Thomson Reuters Institute and IE University Law School finds European legal buyers broadly expect to maintain or increase outside legal spend over the next 12 months, with a net spend anticipation of +8, trailing the global average of +18. Spain leads at +18, while Northern Europe is more cautious. Regulatory work is the fastest-growing practice area at +33, driven by EU AI Act and ESG reporting demands.
Over half of European GCs (51%) say AI implementation will be the biggest differentiator for law firms over the next five years. Yet only 20% of standout lawyers have had substantive AI conversations with most or all of their clients. 82% say their practice area has a clear AI plan, but only 55% feel confident about monetizing it. When firms miss the mark on value, just 4% of GCs cite cost; communication, business understanding, and delivery lead the list.
Nearly two-thirds of standout lawyers (64%) have had conversations with clients about value-based billing or alternative fee arrangements, with 36% describing them as substantive discussions rather than one-offs. GenAI usage is concentrated in legal research, communications, document drafting, and administrative tasks, with 52% of firm lawyers reporting a significant positive impact on efficiency, more than triple any other benefit. Intellectual property is the only practice area in decline, at an NSA of -8. The report draws on 215 GC interviews across 22 countries and 347 client-nominated standout lawyer interviews across 27 European countries.
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