Executive summary
The fourth edition of the Thomson Reuters Legal Tracker™ LDO Index at times offers the most insight when considering not what has changed, but instead what has remained the same.
To understand that, we’ve expanded some of our commentary to include analysis of the data over the four editions of the Index report (Spring 2017, Fall 2017, 2018, and now this edition). We feel this insight could better illuminate where trends have successfully caught on, and in what areas more attention is needed.
As has been shown in each edition of the Index thus far, legal department staff have been increasingly relied upon to do more. Indeed, 68% of legal departments surveyed are facing increasing legal work demands – a high-water mark hit last year as well.
Even with more than half (57%) of legal departments saying they have dedicated legal operations functions, the percentage of legal departments increasing their staff specifically dedicated to legal operations decreased slightly, to 17%.
Further, more than half of the respondents have reported increasing the percentage of work handled in-house in each report, apart from Fall 2017. Not surprisingly, the percentage of those departments increasing their outside counsel spending fell to 47%, the lowest since Fall 2017.
Given that, it was little surprise that controlling cost remains the most common high priority issue among legal departments surveyed, with 90% ranking it as high priority.
To manage this combination of increased workload and more budgetary pressure, legal departments are deploying a number of critical strategies, revolving mostly around people, process, and technology. They are also developing procurement strategies to reduce external cost.
In process and technology, for example, 70% of departments identify using technology to automate and reduce manual process as a high priority; and more than half of respondents said their use of technology tools had increased over the past two years. As testament to the tight financial constraints many legal departments are under, however, fewer of them saw increases in their budget for technology, instead dropping to 27% seeing an increase, compared to 34% in our previous survey.
In managing legal spend, 57% of legal departments identify themselves as proactive in spend management – utilizing billing guidelines, invoice audits & legal invoice review, as well as a standardized process for management of timekeepers and matters. Indeed, spend and matter management were also identified as the foundational technology for corporate legal departments today.
In fact, legal departments listed “general enforcement of billing guidelines” as the top best practice they utilize, with 89% of legal departments identifying it as an effective cost control measure.
Overall, this edition of the LDO Index paints a picture of corporate law departments that, while facing an increasing amount of work that was traditionally completed by law firms, sees these organizations trending in the general direction of law firms themselves – pursuing their desire to increase efficiencies by doing more with less.
Law department priorities ranked
Top law department priorities remain consistent to prior surveys – controlling outside counsel costs, using technology to simplify workflow and manual processes, internal data security, internal efficiency in delivery of legal services, and a focus on legal operations. these five priorities remain at the top of the list, with more than half of legal departments identifying them as high priority.
Indeed, if you look at legal department priorities over time, they could hardly be described as shifting. the top three priorities – controlling outside counsel costs, using technology to simplify workflow and manual processes, and internal data security – were the same as last year’s survey; and the top two priorities were the same since 2017.
