With 2026 just days away, legal teams face a markedly different data landscape than even a few years ago. The use of Artificial intelligence has moved from novelty to standard practice, and the challenge is no longer whether to use AI, but whether its use is transparent, defensible, and aligned with business objectives. KLDiscovery looks at some themes shaping legal strategy in the year ahead.
Cross-border complexity and regulatory divergence
More disputes and investigations will involve data spread across several countries. Business data will be stored in more locations, under different retention rules and access controls.
Rules for data and AI are likely to continue moving at different speeds across major regions. An approach that works smoothly in one jurisdiction may be viewed very differently in another, making early regulatory planning essential. More sectors will rely on regional or sovereign cloud services that keep sensitive data within specific regions.
Early assessment is becoming more analytical
The sheer volume and complexity of modern data across collaboration platforms, cloud systems, and AI-enabled workflows have made traditional keyword filtering less effective. Tighter timeframes and increased cost pressures mean that early assessment must deliver insight quickly, while data is still in place. Advanced analytics and natural language processing will identify communication patterns and critical themes across the data set from day one.
This earlier insight enables counsel to make effective decisions on case strategy and risk exposure before review begins. It also strengthens information governance activities that happen before review, including data mapping, in place assessment, and culling. Done well, it reduces the amount that moves into processing and review, supporting smaller review sets, faster time to key insights, and lowering manual review and hosting costs.
AI supported document review and human-in-the-loop workflows
In recent years, the use of AI in legal document review has moved rapidly from pilot projects into routine use. The focus is now on whether AI use is aligned with legal strategy, supports business goals, and produces predictable, defensible outcomes.
Over the coming years, courts and regulators are expected to take closer interest in how these AI-assisted workflows are designed and documented. Case teams will increasingly be asked to explain their quality checks and human oversight. Legal teams will need well-defined workflows that ensure transparency in decision making throughout.
The rise of “Shadow Intelligence”
The challenge will shift from Shadow IT (the use of unauthorised applications) to “Shadow Intelligence”. As consumer AI tools outpace corporate software, employees will increasingly feed sensitive corporate data into personal AI agents running on personal devices or private cloud accounts.
In future matters, relevant information may increasingly reside in prompts, chat histories, and AI-generated outputs, rather than just in traditional emails and attachments. This creates a complex new data frontier: trying to retrieve corporate work product that may be mixed with an employee’s personal data. Data and discovery controls will need to evolve to address algorithmic interrogation, determining not only what an employee wrote but also what their personal AI agents were asked to process.
When AI becomes part of the matter
Agentic AI is already embedded in high-risk business systems, including customer interactions, contracts, and pricing. Through 2026, we expect more examples where such decisions sit at the centre of disputes or regulatory action.
Courts and regulators will likely request a clearer understanding of how these systems operate. Parties will need to disclose information demonstrating how an AI system arrived at its decision. Legal teams will need to understand what technical evidence exists for the AI tools their business uses.
Conclusion
These shifts will unfold amid continued regulatory and geopolitical change. Legal teams will need a partner who can help them understand their data landscape and meet legal and regulatory requirements without incurring unnecessary costs or delays.
KLDiscovery supports these shifts by collaborating with legal and compliance leaders to enhance data management, accelerate the identification of early findings, and streamline the implementation of response plans. The aim is to help teams transition from reacting to problems to readiness, where they have clear processes and the confidence to act when matters arise.
