Shell targets 40% cut in legal spending through AI and restructuring

Shell aims to reduce spending across its legal function by around 40% over three years. According to the Financial Times, the programme combines headcount reductions, lower spending on external legal advisers and automation. It is led by Gordon McCue (pictured), who heads the company’s 35-person legal operations team.

In 2025, the legal function employed around 900 people, including compliance and ethics specialists. McCue told the newspaper that tools from Microsoft and Thomson Reuters support tasks such as drafting and reviewing contracts, summarising meetings and emails, and preparing presentations. Estimated time savings average 15-20%. The article also reports that some lawyers are developing internal AI agents to answer recurring questions from the business.

The two percentages should be kept separate. The 40% figure is the overall spending reduction target, while the 15-20% relates to time saved on AI-assisted tasks. Working faster can free up capacity, but it does not automatically translate into an equivalent reduction in costs.

For legal departments, the programme therefore raises an organisational question: which tasks require a lawyer, which can be automated, and which recurring requests can be addressed through tools available directly to the business.

Relationships with external law firms are also part of this transformation. Lower spending on advisers raises the question of which matters to retain externally and which to handle using internal resources and tools.

It remains unclear how much each component will contribute to the final outcome. The Financial Times article does not provide a breakdown of expected savings between AI, headcount reductions and lower spending on external advisers. Assessing the transformation will therefore require looking beyond the financial figures to the legal function’s ability to continue managing risks and meeting the needs of the business.