Legal departments continue to face an increased workload, budgetary pressures, and slow technology adoption

TORONTO (October 13, 2022) – According to the seventh Legal Department Operations (LDO) Index, released today by the Thomson Reuters Institute, 65% of respondents indicated the volume of legal work handled by their team increased in the last year. Despite the higher workload, lawyers have not seen a corresponding increase in their budget, with nearly 60% of respondents reporting their legal department budget either stayed the same or decreased.

In response, legal departments are prioritizing controlling their spending on outside counsel (85% listed it as a high priority) and implementing time-saving technology tools to simplify workflow and manual processes (71% listed it as a high priority). Despite the continued prioritization of technology investment, nearly half (47%) report that the pace of advancement in technology and process in their department was either slow, with few changes made each year, or non-existent.

Additional findings of note in the 2022 LDO include:

  • Nearly a third (28%) reported being either dissatisfied or very dissatisfied with the budget and resource allocation for their legal department.
  • Nearly half (49%) of legal departments say they’re prioritizing bringing more work in-house. Despite this, eight in ten (80%) of in-house departments still report that a quarter (25%) or more of their work was handled by an outside law firm.
  • More than 20% say that their legal department’s existing technology is underutilized in at least 13 different technology categories, including systems like electronic billing and legal research, but also other key operational systems such as contract management, document management, practical know how, knowledge management and legal workflow automation.

“The trends we’re seeing in the legal industry are reflective of the current economic realities. Faced with economic uncertainty and an increasingly complex regulatory environment, legal departments are understandably looking for innovative solutions to meet today’s demands,” said Hillary McNally, General Manager for Corporate Legal at Thomson Reuters. “While it is pleasing to see that investment in legal technology remains a priority, it is critical that these tools are properly adopted and utilized. If legal departments are to keep up with the current financial pressures, these technology solutions must be fully implemented.”

The data for the Index is comprised of real-world legal spending analytics gathered from Thomson Reuters’ Legal Tracker and sourced from more than 1,500 corporate legal departments and a Thomson Reuters survey conducted in August and September 2022 to which 107 legal departments responded.

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