Anthropic’s headwinds in pitching Claude to law firms highlight the challenges the world’s largest tech companies face in trying to break into the legal technology market. Selling to in-house teams, however, poses a different challenge and opportunity.

Tech giants are flowing into legal tech so regularly that you can track the passage of autumn just by keeping tabs on their announcements: Google announced a legal offering for Gemini in August, OpenAI expanded its legal offerings in September, and Microsoft launched Copilot for legal this month.

But it was Anthropic, early this year, that was the first to say it was developing tools for lawyers, prompting speculation that Big Tech will render legal tech vendors irrelevant. As I reported exclusively last week, that may not be a forgone conclusion: some law firm innovation leaders are unimpressed with Claude’s offerings for attorneys.

On the in-house side, legal teams might not be as picky about Big Tech as their law firms peers are. That’s because many companies have organization-wide subscriptions for all their employees to Claude, ChatGPT or Copilot, said Shai Mehani, a lawyer who operates In-House Connect, a nationwide organization of more than 40,000 in-house counsel. That makes the expansion into using Big Tech tools for legal work more seamless.

“There are a vast number of in-house folks who just have access to Copilot and they’re using Copilot for legal use cases,” Mehani told me.

In those cases, the legal team is somewhat at the whims of a chief information officer who is deciding which general-purpose AI tool to buy for an entire company, said Varun Mehta, who consults with in-house legal teams on tech change as CEO of Factor.

“I don’t think there’s going to be many situations where the legal department is purchasing these tools directly,” he told me.

ICYMI: Anthropic’s Ambitions in Legal Technology Get a Reality Check

When a California law regulating attorneys’ use of artificial intelligence goes into effect Jan. 1, it’ll affect more than just litigators.

Yes, the law’s restrictions are grabbing headlines for requiring attorneys to disclose AI-use and take steps to verify case law in order to weed out hallucinated case citations. But it also “raises interesting questions for in-house counsel wherever they sit,” Scott Meyers, chairman and CEO of Akerman, told me.

The California law, the first-of-its-kind in the nation, prohibits attorneys from delegating the practice of law to AI, but — rather unhelpfully — defines neither “delegate” nor the “practice of law,” Meyers noted. Still, the restriction creates a potential limit on how much attorneys can ask AI systems to do.

The law also restricts attorneys from entering personally identifying information like birthdays into AI systems unless certain confidentiality requirements are met, an issue that could surface in internal investigations, when companies are handling personal data of their employees.

“That impacts any California attorney regardless of whether they’re in-house in California or at a law firm,” Ashley Eickhof, an antitrust partner at Baker McKenzie who has written about the new law, told me.

Another relevant point for internal investigations: if a company hires an external investigator, attorneys are responsible for ensuring the investigator complies with the AI restrictions.

And it isn’t just attorneys in California who should pay attention: California has a history of pioneering regulations that are copied by other states.

“AI is here and I don’t think it’s going away,” Eickhof said. “I suspect that we will see more statutes like this in the future.”

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