Key Trends in Legal Departments for 2016

published on Cloud technology, Contract Management, Legal Innovation
Legal departments talk the talk but don’t walk the walk. They like to boast that they’re at the forefront of innovation, but when it comes down to it they often revert to the old ways of fax machines, spreadsheets and filing cabinets. Each year, the Blickstein Group conducts a survey among legal professionals managing complex legal department operations, providing them with a benchmark and highlight the emerging trends in Iegal department operations management. The 8th Annual Law Department Operations Survey provides insights on a variety of legal department issues expected to play a role in the next year.

Legal Departments are Using More Metrics:

Legal department operations managers aren’t just collecting data, but they’re analyzing and embedding metrics and reporting programs in their departments. Since last year there’s been a significant increase in the use of formalized metrics and reporting programs. The most popular metric to track was the percentage of legal spend, followed by the percentage of legal spend versus dispute resolution for company and business units, and the percentage of hours received at discounted rates. Effacts-Blog-Key-Trends-in-Legal-Departments-for-2016-01.png

Challenges to Managing Legal Department Functions:

Respondents were asked to list their top three challenges related to managing legal department functions. One major challenge was driving and implementing change. Legal departments feel they are responsible, because 81.8% of the respondents believed that corporate legal departments will be the primary force behind  innovation and change in the legal sector. The issue that stems from their sense of responsibility is that since legal departments pay the bills, they often escape criticism for a lack of innovation, so the blame shifts to law firms and vendors. The results indicate that respondents are concerned with seeking new opportunities and improve the bottom line to seek fundamental changes. Effacts-Blog-Key-Trends-in-Legal-Departments-for-2016-03.png When the recession hit in 2008, legal departments budgets’ were under increased scrutiny to make cuts even though their workload didn’t slow down. While organizations have slowly recovered from the recession, the expectation that legal departments do more with less has persisted. Many legal departments have taken advantage of the current business environment by bringing about more disruptive changes. Legal departments that are able to embrace and adjust to change are able to realize competitive advantage for their organizations by optimizing the overall spend, using data to inform future decisions, and viewing effective legal management as a core business function.

Use of Technology on a Regular Basis:

Legal departments are very comfortable with using different technology systems on a regular basis (which hopefully includes cutting down the amount of paper processes). Legal department operations managers reported they were least satisfied with their contract management technologies, perhaps because of the challenges involved in implementation. On the bright side, most respondents said they are planning to update, evaluate or implement contract management systems in the next 12 months. Legal departments have learned that simply implementing a variety of systems doesn’t translate into success. According to the survey, 35 percent plan on developing a technology strategy and nearly half say they will develop a plan. However, getting started is often the biggest challenge because there are simply so many options. For legal departments that feel overwhelmed a systematic approach is best, which involves reviewing available options, understanding what they really need and evaluating the return on investment. Effacts-Blog-Key-Trends-in-Legal-Departments-for-2016-02.png

Takeaway:

The overall results of the survey paint a positive picture for legal departments in 2016. Perhaps the best news is the trend towards relying on metrics. As more legal departments continue to turn to data analytics, there will be more evidence that shows just how critical data processing and analysis is to their success.