You need end-to-end encryption anytime the IM server isn't under your control. It's a reasonable assumption that if they could log everything, some manager somewhere has ordered them to do it regardless of legality.
If the threat you're trying to protect against is your local IT sysadmin eavesdropping on your conversations about office politics, the fact that Google Talk may internally log your IMs is close to irrelevant. The NSA might be able to get those logs from Google, but your coworkers probably can't.