Thomson Reuters Legal Tracker LDO Index Notes Budget Squeeze, Prioritization of Cost Controls and Technology
For many corporate legal departments, budgets are not keeping up with the growing volume of work according to the 2018 Thomson Reuters Legal Tracker LDO Index, a report based on anonymized data from Thomson Reuters Legal Tracker, which includes more than 1200 legal departments, as well as survey responses from 217 legal departments using Legal Tracker.
Sixty-eight percent of legal departments surveyed report the volume of work, defined by legal matters, is increasing, but only 35 percent of legal departments report an increase in department budget over the last 12 months.
According to the report, the top five initiatives for legal departments are:
- Controlling outside costs
- Using technology to simplify workflow and manual processes
- Internal data security
- Legal operations
- Drive internal efficiency in the delivery of legal services
“The data emphasizes how legal departments are continuing to manage their responsibilities and work more efficiently amid budget challenges or constraints,” said Chris Maguire, managing director of the U.S. Corporate segment, Thomson Reuters Legal. “One significant area that is seeing substantial growth and investment is the legal operations function. Employing this operational focus, legal departments are leveraging technology and process improvements to more efficiently serve the organization.”
Fifty-one percent of legal departments have dedicated legal operations staff with the remaining legal departments sharing the operational responsibilities among the entire legal department staff.
Based on external spend, 57 percent of legal departments that spend $15 million to $50 million have dedicated legal operations, rising to 71 percent of legal departments with a spend of $50 million or more. By region, the West sees the highest percentage of dedicated legal operations at 61 percent.
An overwhelming 93 percent of legal departments say that controlling outside legal spend is a key area of focus. Most departments (62%) consider themselves proactive, meaning they are using billing guidelines, invoice audits, as well as process management of timekeepers and matters.
Among those surveyed, the top cost control resources utilized include:
- Reduction of invoice expenses
- Moderate enforcement of billing guidelines
- Strict enforcement of billing guidelines
- Standard discounts on proposed timekeeper rate cards
- Reduction of timekeeper rate increases
Half of legal departments (53%) noted their budget for technology is remaining flat, with slightly more than one-third (35%) increasing their technology spend budget.
The top technology solutions utilized by legal departments include:
- E-billing/spend and matter management
- Document management
- Legal hold
- Legal research
And as legal departments continue to pursue new ways to improve, the top emerging solutions they are seeking to procure include:
- Document management
- Contract lifecycle management
- Legal workflow automation tools
- Knowledge management
The full report of the Thomson Reuters Legal Tracker LDO Index can be downloaded here: Legal Tracker LDO Index.