Obstacle or Opportunity? How legal departments are embracing technology

As legal teams undergo significant transformation, they face a range of obstacles. In recent years, legal departments across the globe have adapted to changes in technology, workload, and their role within the business.

Insights from a recent Lexology masterclass featuring Wolters Kluwer product experts Margo Trebicka (U.K.), Simon Winter (France), and David Jimenez (Spain) shed light on these changes. The session followed the release of The Legisway Benchmark for Legal Departments, which is based on a survey of over 350 in-house legal professionals across Europe. Read on to learn more about the current landscape for legal departments and strategies for thriving amidst change.

Legal departments as strategic partners

A notable indicator of change is whether a legal department has a specific budget for technology. This year’s survey showed a decrease in the percentage of legal departments without a dedicated budget, from 38% last year to 30% this year. Margo noted that this trend signifies a shift from legal departments being perceived as cost-centres to strategic business partners.

Legal departments are gaining position in the business and being seen more as a strategic partner. The more value they seem to deliver, or attract, the more likely it is that they will have a budget.

Feeling the weight of workload

Despite a positive shift in perception, high workloads remain a persistent challenge. Among a list of pain points, respondents rated dealing with an increasing workload the highest (4.8 on a scale of 1-7). It seems that having a technology budget – and using the budget to purchase a tool - does not necessarily indicate a reduction in workload. Simon remarked it’s the “do more with less” mantra that continues to resonate as legal departments grapple with maintaining efficiency in the face of growing demands. “Workloads have increased due to the growing complexity of regulations and processes. For example, in France, one in five legal departments is a one-man show, but they must deal with all aspects of legal work.”

Winning stakeholder approval is a key element of a successful technology implementation and change management. Surprisingly, legal departments rated getting stakeholder approval as the pain point with the lowest priority (1.2 on a scale of 1-7).

Simon explains, “this result is surprising, because legal departments are aware they have to work with other departments and get them on board. Could it be that the other pain points are so pressing that they overshadow the need for getting stakeholder buy-in?”

Streamlining operations

As workloads increase, legal departments are focusing on making improvements to alleviate the burden. Over half of the survey respondents (52%) reported their organisation has plans to improve the way they collect, organise, and retrieve legal information.

Margo noted this represents a change in priorities. “If you asked legal departments what processes they planned to improve a few decades ago, they would have said knowledge. Having easy access to knowledge is readily available these days, so the emphasis has shifted to storing and being able to access information quickly.”

Legal operations is gaining traction

Organisations seem to increasingly recognise the importance of the legal operations role. Overall, 42% of respondents reported their organization has a dedicated legal operations role, with the U.K. in the lead at 52%. David mentioned that while the legal operations role used to be confined to larger companies, it is increasingly common in small and medium-sized enterprises in Spain. “A legal operations role can make the difference between a good and an excellent legal department,” he added.

Margo agreed, noting that legal operations “truly makes a difference especially in terms of efficiency. Legal departments should focus on legal work, while legal operations focuses on streamlining approaches, technology adoption, and spend management. A legal operations manager knows the company and the technology market inside and out. They’re able to assess what technology solution is suitable.”

Opportunities and misconceptions about AI

AI is generating considerable interest among the legal profession, with 40% of respondents incorporating AI into their legal work. The most common applications include administrative tasks, document analysis, and report generation. However, Margo cautioned against getting caught up in the hype. “AI won’t take over most tasks, especially those requiring creativity and in-depth analyses. It can reduce the time spent on administrative tasks by more than half. Imagine not needing to review NDAs for your internal stakeholders – that translates to major time savings.”

The panellists stressed the importance of understanding AI’s true capabilities. “AI is here to stay,” Simon remarked. David likened the current buzz around AI to the early days of the Internet, where initial scepticism gave way to widespread acceptance. Rather than viewing AI as a replacement for legal expertise, it should be seen as a powerful tool for enhancing efficiency when properly utilised.

David concluded, “The most dangerous phrase in business is, ‘we’ve always done it this way.’”

Conclusion

The evolving landscape of legal departments presents both challenges and opportunities.

As these departments become increasingly integrated into business frameworks, the need for process optimisation, efficient information access, and a focus on legal operations is more apparent than ever. By thoughtfully navigating these changes, in-house legal professionals can enhance their value and drive success in a complex, dynamic environment.

For a deeper dive into the state of legal departments across Europe, including insights on maturity, process optimisation, and digital transformation, download a free copy of The Legisway Benchmark for Legal Departments 2024.