General counsel identify AI as primary legal threat, study shows

Artificial intelligence-related legal battles have emerged as the predominant litigation concern for corporate counsel over the coming three-year period, eclipsing traditional risk areas including intellectual property conflicts, contractual breaches, and class actions, according to a new study conducted by Shoosmiths.

Employment and discrimination claims lead AI concerns

The research, encompassing insights from 360 general counsel and senior legal officers, indicates that more than half of respondents foresee a rise in AI-centered litigation.

The research, published in the firm’s Litigation Risk 2026 report, highlights employment-related AI disputes and discrimination allegations as the most pressing worry, with 87% of participants expressing significant concern. Close behind are disagreements over AI service agreements and data protection violations stemming from AI processing activities.

Geopolitical tensions drive cybersecurity investment

Beyond technology-related risks, geopolitical tensions have captured the attention of corporate legal departments. Nearly three-quarters of organizations surveyed believe state-backed cyber intrusions have already heightened their litigation exposure, with more than a quarter reporting substantial increases in such threats.

These developments have driven seven in ten companies to strengthen their cybersecurity infrastructure over the past twelve months, while an additional 26% have committed to similar upgrades. The trend reflects mounting anxiety following several high-profile cyber incidents affecting major retailers in recent months.

Strategic risk management in an uncertain climate

According to Alex Bishop, who leads litigation, regulatory and compliance matters at Shoosmiths, the current environment of global uncertainty is reshaping corporate risk management. “By examining worldwide patterns and identifying business vulnerabilities, companies can more effectively predict potential conflicts and deploy strategic safeguards to protect their standing and financial health,” Bishop noted.

Shifting priorities beyond cost considerations

The financial stakes remain considerable, with organizations now allocating approximately £600,000 on average for significant disputes. However, the study reveals a shift in priorities: while escalating expenses remain a consideration, they no longer dominate decision-making processes. Legal departments now place greater emphasis on case strength, reputational implications, and anticipated timeline when evaluating whether to pursue litigation.

Expanding legal teams to meet growing demand

Reflecting the surge in disputes across the United Kingdom, European Union, and North American jurisdictions, three-quarters of surveyed companies plan to grow their internal legal departments, while 71% intend to boost their dispute resolution budgets.