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Legal depts face higher workloads with budget challenges; firms moving to the cloud and investing more in legal tech
Trends
Clients
- Increasing legal department workloads but without matching budget increases; inefficiencies in contracting are costing $ and resulting – in some cases – in lost business
- Expectation by GCs of the greater use of legal tech – by themselves and by their firms; GCs often face challenges in getting budget approval to purchase their own technology
Firms
- More and more firms (and clients) are moving to the cloud / software-as-a-service
- Increased investments / spend by firms in legal technology
Both firms / clients
- Continually changing cybersecurity threats
- Greater variety of software choices – at better and better pricing
- Hybrid working - from office / home / anywhere - with online meetings
- Competitive market for top legal talent - so working effectively using technology is even more important
Firm challenges
- Developing a strategy for digital service delivery - both internal and / or client facing
- User adoption / change management
- Resourcing – lawyer time and budget $ - new legal tech projects
- Choosing software (which one(s) to buy; and how to fit it in to the other software)
- Localization – using software in local (non-English) languages and fitting to local legal jurisdiction requirements
- Greater use of e-signatures – many Regulators have moved to accept them and there will be wider use of them but at times there can be uncertainty about whether they are a valid form of execution (e.g. deeds)
Software categories
Software which leading law firms plan to invest in (for more about Lex Mundi member firm see 2021 survey results - click here):
- Automation of Document and Contract Creation
- Collaboration Tools for Document and Contract Drafting / Reviewing
- Document and Contract Workflow Management
- Hybrid working collaboration and conferencing software – MS Teams, Zoom, etc.
- E-Signature tools.
Background
What do GCs want - and how leading firms are responding
Source - conducted with the Harvard Law School Center on the Legal Profession
75% of GC’s are having difficulty handling current workloads
The workload is projected to increase by 25% during the next 3 years
88% of GC’s report plans to reduce their budgets in response to escalating pressure from the C-Suite and Board to do so
Among large corporations (>$20B annual revenue), the C-Suite mandated legal cost takeout has jumped from 11% in 2019 to 18% in 2021
2) Extracts 2021 Wolters Kluwer Future Ready Lawyer Moving Beyond the Pandemic Source
What do clients want from their firms re: legal tech?
- Greater Use of Technology to Improve Productivity (84%)
- Greater Collaboration and Transparency between Law Firms and Clients (80%)
- Increased Emphasis on Innovation (78%)
- Greater Use of Alternative Fee Arrangements (78%)
10% increase over 2020: 91% of legal departments expect to ask firms about their technology use; 82% of corporate legal departments say it’s important the law firms they work with fully leverage technology.
Software which leading law firms plan to invest in:
- E-signature
- Automation of Document and Contract Creation
- Collaboration Tools for Document and Contract Drafting / Reviewing
- Document and Contract Workflow Management
The top trends expected to impact most legal organizations:
- Increasing Importance of Legal Technology – 77%
- Coping with Increased Volume and Complexity of Information – 77%
- Meeting Changing Client/Leadership Expectations – 76%
- Ability to Acquire and Retain Talent – 76%
- Emphasis on Improved Efficiency/Productivity – 75%
Top reason why new technology is resisted in their organizations: “Organizational Issues”