June 3, 2021
Innovative thinking and strategic decisions defined Corporate Legal’s COVID-19 strategy. Most everyone faced an initial cut in outside counsel spend, which resulted in the inevitable increase in in-house counsel’s workload, but smart law departments began using technology to solve new inefficiencies and remedy cost concerns. It has been the perfect storm to encourage legal to embrace, not fear, new technology and the industry has proven its resilience with smart choices that are evident in the recent survey conducted by the Corporate Legal Operations Consortium (CLOC). Participants responded from 200 organizations across more than 22 industries and 21 countries.
The in-depth report highlights current and future industry trends, as well as insights into what corporate leaders are interested in and working on. We read through it and wanted to share what we found interesting. Here are four key points where Corporate Legal made the most significant changes this past year:
Increasing Legal Spend and Balancing Work Distribution
Overall, Corporate Legal’s budget balancing between internal and external expenditure was reported at an impressive average equilibrium with a 50-50 split, compared to last year’s 40% internal to 60% external. It also appears that smaller and medium size companies skew more towards a 50-50 split, while larger companies prefer to outsource.
The distribution of work between internal counsel and outside counsel, such as law firms and alternative legal service providers, was surveyed with 41% reporting that they felt the balance of work has remained the same, 39% gave more work to in-house, and 20% outsourced more work. About a quarter of respondents stated that the number of alternative service providers they worked with increased in 2020.
These shifts can be great opportunities for smart legal operations teams to survey their processes and systems to identify and assess chokeholds, inefficiencies, and obsoletions. Evaluate your technologies– there are so many efficiency and security problems that can be solved with an integration – and your vendors – there are so many alternative fee arrangements you can take advantage of to reduce cost while maintaining services. Take advantage of this transitionary period to transform your department’s operations and improve collaboration, security, and relevancy.
Significant Growth of Legal Operations
Across all industries, the survey found that the average corporate legal department employs 104 people. Breaking down the nuance of that number, small companies reported an average of 15 employees, medium companies reported 81 employees, and large companies reported around 200 employees. Not surprisingly the number of dedicated legal operations professionals per department follows a similar trend, with an average of 1 per small company, 7 per medium company (up from just 2 in 2019), and 13 per large company. Even the number of other staff a Legal Operations supports increased this year to an average of 23 attorneys.
It’s clear that legal operations are increasingly becoming a vital part of most organizations. At least half of respondents stated that their Legal Operations colleagues/team functions at the director or manager level. When it comes to corporate hierarchy, 59% stated that Legal Operations colleagues reported to the general counsel and 11% to the Vice President.
Legal Operations is often in the driver’s seat and it’s important to keep on top of trends in the industry and neighboring industries. With the high reach and holistic perspective of the legal department, Legal Operations professionals who were proactive in responding to COVID-19 are reaping the rewards now and setting an example for other companies to invest in their own Legal Operations teams.
Putting a Spotlight on Issues that Matter
As our social discourse grows with new perspectives and further reaches, it encourages us to reevaluate our professional values as well. For years, concerns around adequate Diversity and Inclusion (D&I) in the workplace have been growing. Fortunately, the survey found that 61% out of all respondents have programs surrounding D&I as their top priority, which is a great improvement from last year. There are more eyes and ears on the importance of D&I in legal than ever before, and technology has been a great help in organizing and collaborating efforts to improve workplaces.
The acceleration of digitization across all industries has also had its effects on legal, with 57% of corporate legal departments choosing initiatives to automate legal processes and 54% sharing that they think their department should implement new solutions. This is incredibly encouraging for an industry known for its reliance on abiding by and not setting precedence and bodes well for the future of legal in the global services marketplace. As the adage says, “If you don’t keep up, you may get left behind.”
Due to budget concerns, some Legal Operations professionals have considered leveraging technology tools to help them with streamlining inefficiencies and strengthening security. Participating legal departments reported having at least some kind of eSignature, eBilling, Contract Management, or Document Management software. These kinds of software tools take a lot of pressures and manual administration work off of the table so legal department staff can focus on high-value work and IT can maintain peace of mind. (Don’t forget your information security diligence check before onboarding any new vendors.)
For those brave companies who took and are continuing to take advantage of the past year and a half to declutter, upgrade, integrate, and improve their technologies and processes, the results speak for themselves. It can be finally upgrading your legacy system or trying something new, but when all it takes is a click, you’ll wonder why you ever “put up with it.”
With a long history of working with top corporate legal departments, InfiniGlobe subject matter experts specialize in evaluating current systems and applications and maximizing their technology investment. We listen to our client's needs, pay attention to details, and deliver tailored solutions to their unique needs. For more information, reach out to us at info@InfiniGlobe.com or (833) LGL-TECH.