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Report

Legal Department Operations (LDO) Index
Fifth Edition: 2020

Dedicated legal operations comes home

Thomson Reuters Legal Tracker has surveyed legal operations professionals for five years, and this year has seen the largest jump yet in the number of organizations with a dedicated legal operations function, as well as an accelerating increase in the rate of law department change.

The new report, Legal Department Operations (LDO) Index 2020: Dedicated Legal Operations Comes Home, published by Thomson Reuters, examines the changing landscape in the corporate legal field. We surveyed corporate attorneys and legal operations professionals on the their spend management plans and sophistication, department priorities and maturity of their legal operations, and their staffing and diversity plans. The report also provides insight into how the COVID-19 pandemic had an impact on their operations in 2020. The report also provides a listing of the most commonly used metrics for law department operations and best practices used by leading organizations.

Controlling spend in a crisis

In total, 223 legal departments including 81 companies in the Fortune 100 responded to the survey in June 2020, and their information was combined with Legal Tracker benchmarking data, comprised of over $90B in legal spending from over 1450 legal departments.

From those data sources, several key challenges and priorities emerged for corporate legal departments. Those include:

  • Increasing spend management sophistication
  • Major jump in the number of organizations with a dedicated legal operations function
  • Continuing increase in work
  • Need to source and effectively use technology tools

Some of the most relevant findings are highlighted here. Access the full report for the complete picture.

Major challenges and priorities of corporate legal departments

Increase in legal work

Selecting and implementing technology

Spend management

Increasing pace of change

The world of corporate legal operations is entering a new era, in which technology will play an increasingly important role as companies are increasingly tasked with controlling and predicting their legal spend on a matter level. Technology promises so much: cost savings; efficiency; better, faster data analysis; clearer decision-making; and the ability to streamline repetitive tasks.

But attorneys and legal departments in general have been traditionally slow to adopt and use technology tools to support their core work, lagging behind operational and financial corporate departments.

Spend management sophistication

Legal departments generally believe they are getting better on managing their spend, but few are in a position to plan ahead:

  • 0%
    Chaotic
  • 23%
    Reactive
  • 51%
    Proactive
  • 18%
    Optimized
  • 7%
    Predictive

Results also varied substantially by the size of organization; for full details, download the report.

Law department priorities were broadly similar across all levels of spend sophistication, with some interesting differences between reactive and predictive departments.

Controlling outside counsel costs remains the top priority for legal departments, consistent with prior surveys.  The biggest areas of change include driving internal efficiency (up 14% YoY), and focus in internal data security (up 10% YoY).  Biggest change for departments from having “no priority” to some priority include using diversity data as a factor in firm selection (up 11% YoY) and use of alternative legal service providers (up 9% YoY). See the top three legal department priorities below. For the full list, download the report.

In a COVID-19 world, the need to work more efficiently is even more pronounced. Corporate legal departments already had a steadily increasing workload before the current crisis, and have been learning first-hand, under the pressure of mandated work-from-home, just how resilient their systems and how adaptable their people need to be. To thrive going forward, they will need to prioritize both technology and people, building and refining systems that increase the efficiency and value of both.

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