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Corporate legal practitioners may find themselves continuing to gravitate toward technology that can lessen their reliance upon outside counsel. However, those initiatives could be hampered by the general lack of understanding surrounding both technology and ongoing innovation efforts inside departments.

Released last week, the 2020 Wolters Kluwer Future Ready Lawyer Survey collected responses from 700 legal professionals working in the U.S. and Europe, with 51% indicating that they expected their corporate legal departments to increase spending on technology over the next three years. Dean Sonderegger, senior vice president and general manager of Wolters Kluwer Legal and Regulatory US, believes that some of that spend will continue to go to "hygiene activities" like matter management or tools designed to track, negotiate or draft contracts.

"I think that that's a lot of where you have traditionally started to see the increase of technology spend in corporate legal," Sonderegger said.

However, it's possible that some of that attention is beginning to be shifted toward technology that can reduce a department's need for outside counsel. Intellectual property docketing software, for example, would allow in-house attorneys to maintain trademarks, copyrights and patent registrations themselves without engaging the services of a law firm.

But like it or not, legal departments may never be able to cut outside counsel entirely from the equation. Instead, they may settle for a better understanding of the work that is being performed on their behalf. According to the survey, 80% of respondents identified greater collaboration and transparency between firms and clients as one of the top changes legal departments expect within the next three years.

What that transparency ultimately looks like may still be up for debate. Sonderegger thinks that there is an ongoing disconnect between firms and corporate legal departments, with the latter hoping that their outside counsel becomes more focused on providing efficient services than the billable hour.

He used the COVID-19 pandemic as an example, which has seen many firms proactively step forward—sometimes with tech-based delivery models—with applicable legal guidance. "I think law firms have done this for years but it's not really as pervasive as corporate legal would like to see it," Sonderegger said.

Meanwhile, corporate legal's own innovation efforts could be met with a lack of enthusiasm by employees or other stakeholders. Organizational issues such as a lack of strategy or a lack of change management were identified by 53% of respondents as the top reason why new tech is resisted in departments, followed by a lack of technology knowledge or skills at 32% and financial issues at 15%.

Lack of tech knowledge could be a particularly arduous hurdle to overcome. For example, while 67% of respondents indicated that big data and predictive analytics would have a significant impact on their department, only 25% indicated that they understood the concept very well. A similar response was garnered with regard to artificial intelligence, where 58% of respondents felt it would have an impact, but only 23% claimed to understand the technology.

In order to continue moving the process of technological innovation forward, Sonderegger believes law departments need a leader in position who understands both technology and legal work. Instead of trying to help employees wrap their minds around the entirety of a complex technology like AI, those leaders may be better served by focusing their message around the end result such tools will have on the efficiency of processes like contracts.

"Those are the types of things that are tangible use cases where a good leader can come in and say, 'This is how we move the dial here,'" Sonderegger said.