Legal25 September, 2024
Legal Departments Under Pressure
I. Introduction
Wolters Kluwer has just released the Legisway Benchmark for legal departments 2024, a comprehensive report that reveals where legal departments stand in terms of maturity, process optimization, and digital transformation. Now in its second year, the report allows for comparisons of last year’s results and dives into the common and unique priorities that define the legal landscape.
To obtain a thorough understanding of the status of European legal departments, the survey was translated into five languages (English, German, French, Dutch, and Spanish) and distributed broadly across European nations. More than 350 in-house legal professionals participated in the survey, including more than 50% who hold senior positions in their legal department.
In the ever-changing business climate, the drive for increased productivity and efficiency is the key motivator behind the evolution of legal departments. Providers of legal technology have become indispensable allies, aiding organizations in their expansion and innovation while supporting legal professionals in managing risks.
Key Insights
Legal professionals participating is this study were asked to prioritise their key pain points,
highlighting the most significant obstacles they encounter.
The results are as follow:
- Dealing with increasing workload – 4.8/7
- Dealing with greater complexity – 4.2/7
- Dealing with greater complexity of regulation/compliance – 3.4/7
- Decentralized data, documents, or processes – 3.1/7
- Demonstrating value to the business – 2.5/7
- Collaboration with colleagues/other departments in the business – 1.8/7
II. Common roadblocks within legal departments
As business demands continue to rise, legal teams face immense pressure, which can potentially compromise the quality of services they deliver. This heightened pressure often manifests as an increased workload for the legal department, a trend that has emerged as the most recurrent pain point in the majority of completed responses.
Moreover, dealing with the growing complexity of work and legal matters is another significant challenge, ranking second and third on the list of pressing issues. The complexity of legal activities has increased due to factors such as globalization, technological advancements, and the proliferation of regulations. Dealing with work that is increasingly complex can be an obstacle to fast decision-making and potentially increase the risk of errors.
Another hurdle faced by legal departments is the decentralization of data and processes. Legal documents scattered throughout an organization can significantly hamper the ability to manage risks effectively. The foundation of effective risk management lies in having clear visibility into the documents and other data circulating within the organization.
Further challenges that legal teams often struggle with include demonstrating their value to the business. Legal teams frequently find it difficult to quantify their contributions, which can make securing necessary resources and reports a challenge. Implementing Key Performance Indicators (KPIs) that underline the legal department's impact on risk mitigation and business outcomes could be one strategy to more clearly illustrate their value.
Read all the insights
Find out more about how digital transformation is shaping up in European legal departments with the Legisway Benchmark for Legal Departments 2024
III. Legal Operations Improvements
Change is a constant in legal departments, as the results revealed the most popular process improvements.
- Collaboration
Survey results highlight that 35% of legal departments have already improved their collaboration with third parties, and an additional 41% are planning to do so. Interestingly, legal departments utilizing Contract Lifecycle Management (CLM) software face fewer challenges when it comes to collaboration, with 40% of CLM users reporting improvements in third-party collaboration.
- Demonstrating Value
In 2024, 22% of legal departments had already made strides in demonstrating their value to business stakeholders, with a further 40% planning improvements. This marks a noticeable shift from the previous year, when only 35% were planning to improve this aspect.
- Legal Document Management
The management of documents and contracts is another area of improvement, with 26% of legal departments reporting progress and 47% planning enhancements. This is an increase from the previous year, when 42% were planning improvements, suggesting a continued focus on this area.
- Workload
68% of legal departments want to conquer the high workload and volume of requests, as they are either planning to improve or recognize the need for improvements. In contrast, only about 1 in 5 legal departments have already made improvements in this area, highlighting it as a significant challenge for many teams.
IV. Conclusion
The legal department landscape is constantly evolving to meet the increasing demands and complexities of the business environment. Despite the challenges, legal departments are demonstrating resilience and adaptability by continually striving for improvement in various areas, from collaboration with third parties to managing legal information and demonstrating their value to stakeholders.
The adoption of Contract Lifecycle Management (CLM) software such as Legisway and the presence of a dedicated legal operations function within a team are strong indicators of a department's maturity and commitment to innovation.
Lastly, collaboration with colleagues and securing stakeholder buy-in are areas where legal departments experience the least amount of difficulty. Despite the numerous challenges faced, legal departments continue to successfully foster strong relationships with other departments and secure necessary support, underlining their resilience and adaptability.
You might also be interested in:
Do you know how to leverage legal KPIs?