In the latest Legal Department Operations Index report from the Thomson Reuters Institute and the Legal Value Network, we see how these professionals balance a myriad of challenges.
Most research on corporate law departments rightly focuses on the opinions and priorities of the general counsel. After all, they are the corporate officers responsible for directing the legal functions of companies and ultimately looking out for the best interests of the companies.
However, there is another team of professionals that plays an equally important role in ensuring the legal protection of the business: legal operations professionals responsible for translating GC priorities into operational reality.
At the same time, legal department operations (LDO) professionals must also structure their efforts to reflect the broader realities around them, including technology trends, economic influences, and changing firm strategies and alignments. external lawyers.
To better understand how LDO teams balance these often competing interests, the Thomson Reuters Institute, in collaboration with the Legal Value Networkreleased the latest iteration of our Legal Department Operations Index. This report is based on a survey – conducted through an online survey conducted in the United States in June and July – of LDO professionals from companies ranging in size from less than $500 million in revenue. annual business with over $10 billion in revenue across a variety of industries. The report is structured to help determine what LDO professionals view as their biggest challenges and priorities.
Among the main conclusions of this report:
- A large majority of corporate law departments are experiencing an increase in legal workload, while trying to manage a growing portion of their workload in-house rather than relying on external counsel.
- Nearly two-thirds of legal departments report that total department budgets are either stable or decreasing, further reinforcing the situation. do more with less Along the same lines, the number of lawyers remains unchanged in the majority of departments, meaning that increased caseloads are putting increased pressure on in-house lawyers. And even if LDO professionals want to focus more on legal operations, these staffing and budget pressures make that difficult.
- A majority of legal departments also report increased use of legal technology tools over the past year, despite a generally slow pace of adoption of new technologies. Additionally, many departments are increasingly using these tools to help manage workflows.
It’s no surprise that controlling external consultancy costs remains the priority high priority item on the LDO agenda. Fortunately, efforts to control costs – particularly when it comes to law firm pricing – appear to be paying off, although more innovative ways of pricing and tracking legal work remain rare.
However, most legal departments also report that the share of their budget devoted to legal technology remains stable, meaning that corporate legal departments looking to increase operational efficiencies through technology need to see a return on their investment. technology to see the value of their investment increase. spend.
LDO professionals must structure their efforts to reflect the broader realities around them, including technological trends, economic influences, and the changing strategies and alignments of external law firms.
The report also highlights that the specific metrics tracked by LDO teams do cover the financial aspects of the legal department, but those metrics may not be comprehensive enough to provide a broad overview of all areas of responsibility. And other questions about how legal teams operate, threats posed by data security issues (which are a growing concern for LDO professionals), and return-to-office policy remain prevalent, with many legal departments seeing their policies defined at the company level.
This report also shows how better understanding between GC and LDO teams – on the issues of where they may stand, where there may be a difference in perspective and how to compare to their peers – would be a boon to every legal department . . It also highlights potential areas for improvement, particularly related to technology adoption and budgeting, as well as the metrics used to evaluate and report on service performance.
Likewise for law firms, this report provides necessary insight into areas in which in-house legal departments are seeking assistance. Law firms that can step in to provide some of this assistance – for example, by helping track key performance indicators beyond just cost factors – could potentially provide value to their clients well beyond only legal matters for which they are engaged.