Strategic Counsel in the Age of AI Leading Innovation Not Just Regulating It

As the EU’s Artificial Intelligence Act (AI Act) begins to take effect, legal departments across industries are being called to lead, not simply to interpret. Amid sweeping innovation and an evolving regulatory landscape, general counsel are stepping into a more expansive role. They are no longer just guardians of compliance but have become strategic architects of how businesses engage with transformative technology.

The rise of AI offers immense potential, but it also comes with real risk. With so much uncertainty, the temptation might be to focus on the technical details of compliance. However, the most effective legal leaders are turning their attention elsewhere – to judgment, governance, and agility. Their goal? To ensure the company shapes AI, not the other way around.

Moving from reactive to proactive legal leadership

AI isn’t something that legal teams can afford to sit back and wait to understand. The companies that are making the most of this moment are those where the legal function has moved upstream – embedding itself early in conversations around AI adoption, use, and ethics.

Rather than waiting for clarity, strategic legal teams are stepping forward to shape it. These teams are asking what role AI should play in the business and setting the tone for how it should be used responsibly. Instead of reacting to regulation, they’re helping define internal guardrails and governance principles that make space for innovation while managing emerging risks.

This shift represents a broader evolution of the in-house legal role, going from advice-giving to enterprise-guiding. Especially in environments where regulations like the AI Act are still taking shape, it’s judgment and foresight that matter most.

Regulation as a strategic catalyst

The AI Act has certainly focused minds. With provisions rolling out through 2025 and 2026 – and the threat of penalties of up to €35 million or 7% of global turnover – there’s good reason for urgency and proactivity. But this is about more than avoiding fines. The Act’s sweeping scope, extraterritorial reach, and risk-based classification system (including “high-risk” AI uses like hiring and credit scoring) mean that legal teams have a chance to do more than tick boxes. They can use the regulation as a catalyst to define how their company engages with AI across operations, culture, and strategy. That doesn’t mean to say teams should be rushing into action prematurely, though. A common tension GCs face is how to strike the right balance between preparing ahead of time and avoiding overcorrection before the regulatory dust settles. The answer lies in clarity of intent – what matters is that the business understands its own goals for AI, and that their legal team helps build a strategy that’s flexible enough to adapt as and when new guidance arrives.

Governance over technical expertise

AI regulation brings with it a flood of complexity, but legal departments aren’t expected to become technical experts in model architecture or data pipelines. What businesses need from their legal leaders is something different – a governance mindset. That includes the ability to weigh risk and impact across disciplines, to ask the right questions when the technology moves faster than the law, and to embed legal strategy into business decision- making from the outset.

In short, it’s not about how well a GC understands the tech, it’s about how confidently they can lead amid uncertainty. That leadership depends on legal teams building trusted relationships across July 2025 • www.globelawandbusiness.com 3 Strategic counsel in the age of AI – leading innovation, not just regulating it Rather than waiting for clarity, strategic legal teams are stepping forward to shape it. These teams are asking what role AI should play in the business and setting the tone for how it should be used responsibly.Copyright Globe functions, from engineering and HR to marketing and operations, and guiding those teams with judgment that blends legal expertise with business intuition.

Agility as a legal asset

Just as important is agility. AI is not a one-time challenge – it’s a continuous one. Technologies evolve, regulations shift, and new use cases emerge almost weekly. To stay ahead, legal departments must build frameworks that can flex with change, rather than crumble under it. That means establishing principles and escalation paths rather than rigid rulebooks, as well as demonstrating the ability to shift gears quickly, offering clear, business- relevant guidance even when information is incomplete or evolving.

Some of the most successful legal teams we work with are those who’ve already adopted this mindset, recognizing that agility is not just a trait, but an advantage that allows them to influence innovation early, to steer implementation thoughtfully, and to respond to issues before they become crises.

AI is reshaping hiring, too

Nowhere is this need for agility and judgment more apparent than in how legal teams are hiring. As AI grows more central to both business strategy and compliance, companies are rethinking what they need from their legal talent.

There’s increasing demand for in-house counsel who can think cross-functionally, assess emerging policy, and provide strategic advice in areas with no legal precedent. Legal professionals who can bridge ethics, governance, and innovation are rising in value, and so is their compensation.

This is especially true for roles touching on compliance and employment. With AI tools now playing a role in recruitment, employee monitoring, and productivity scoring, legal teams must be able to evaluate these tools for bias, fairness, and risk. As a result, there’s an acute need for lawyers who understand not just employment law, but the mechanics and implications of AI in the workplace.

The focus isn’t on finding AI “experts” per se, it’s on recruiting legal professionals with strong critical thinking, an appetite for complexity, and the confidence to make decisions in grey zones. These are the team members who will help businesses use AI effectively while staying true to their values.

The GC as strategic anchor

 In this era of transformation, the general counsel’s role is simultaneously expanding and becoming more essential. GCs are not simply interpreters of law, but anchors of strategy. They help the business answer questions that aren’t yet fully formed, shape frameworks that allow for speed without sacrificing responsibility, and bring coherence where the rules are fragmented.

The AI Act is only the beginning. As global AI regulations continue to emerge, the companies that succeed will be those whose legal teams aren’t playing catch-up, but are leading the way.