More than two-thirds (68 percent) of legal departments said they are facing increasing legal work demands. Likewise, RegTech related practices are gaining ground among legal departments around the world, with seventy percent of departments saying that they are using technology to automate and reduce manual work as a high priority for them in the near future and 51 percent of departments have increased the number of technology tools utilized in the last 12 months.
These are just some of the data that can be found in the fourth edition of the “Thomson Reuters Legal Tracker™ Legal Department Operations (LDO) Index Report,” that looks at the qualitative and quantitative insights into the operations of corporate legal departments.
This latest report has expanded its commentary to examine trends over the last three years. The report reveals that the priorities of corporate legal departments remain consistent – controlling outside counsel costs; using technology to simplify workflow and manual processes; focus on internal data security; driving internal efficiency in delivery of legal services and focus on legal operations.
Controlling costs continues to be the highest priority among legal departments
The report found that controlling costs continues to be the highest priority issue among legal departments, with 90 percent ranking it as a high priority. And they do so through various practices.
For example, more than half of respondents (53 percent) reported they are doing more work in-house, and 41 percent of companies said bringing more work in-house is a high priority.
Likewise, law departments are adopting more technology and RegTech practices with seventy percent of departments said that using technology to automate and reduce manual work is a high priority and 51 percent of departments increased the number of technology tools utilized in the last 12 months.
Despite that, the report found that more than half (57 percent) of corporate legal departments have dedicated legal operations functions. However, the percentage of legal departments increasing their staff specifically to focus on legal operations decreased slightly to 17 percent.
At the same time, 61 percent of legal departments have some priority on relying on alternative fee arrangements (AFAs) as opposed to hourly rates, with the majority of organizations having less than 20 percent of their outside spend through AFAs, according to the report. As well as 68 percent of legal departments said they are facing increasing legal work demands, which is the highest in the report history.
“It is clear corporate legal departments continue to face the pressures of addressing a growing workload. Legal departments, and legal operations teams, continue to explore new ways that people, process and technology can impact the delivery of legal services and management of the legal function to control cost, increase efficiency, maximize effectiveness and ultimately demonstrate value,” said Chris Maguire, Customer Proposition Lead for Large Corporate Accounts at Thomson Reuters. “By benchmarking performance and understanding industry trends, legal departments continue to become more sophisticated in approach to control spend and maximize their organization’s competitive advantage.”
The report also includes benchmarking data from more than $90 billion in legal spending from more than 1,400 legal departments and 62,000 law firms, as well as responses to a July 2019 survey of corporate legal departments that use Legal Tracker, the world’s largest legal index. The survey received responses from 210 legal departments, including 75 companies in the Fortune 1000, and responses across 34 industries, including strongest participation from companies in the Healthcare, Financial Services, Energy & Utilities, Manufacturing, and Retail industries.
Hernaldo Turrillo is a writer and author specialised in innovation, AI, DLT, SMEs, trading, investing and new trends in technology and business. He has been working for ztudium group since 2017. He is the editor of openbusinesscouncil.org, tradersdna.com, hedgethink.com, and writes regularly for intelligenthq.com, socialmediacouncil.eu. Hernaldo was born in Spain and finally settled in London, United Kingdom, after a few years of personal growth. Hernaldo finished his Journalism bachelor degree in the University of Seville, Spain, and began working as reporter in the newspaper, Europa Sur, writing about Politics and Society. He also worked as community manager and marketing advisor in Los Barrios, Spain. Innovation, technology, politics and economy are his main interests, with special focus on new trends and ethical projects. He enjoys finding himself getting lost in words, explaining what he understands from the world and helping others. Besides a journalist he is also a thinker and proactive in digital transformation strategies. Knowledge and ideas have no limits.