The workload of legal departments at top UK companies has increased in the past 12 months, according to a Benchmarker survey commissioned by Legal Week's sister publication Legal Director.

More than half of the departments surveyed (55%) said the overall volume of work had risen, with only one in 10 saying that it had decreased. The survey – conducted in association with Oyez Legal Technologies – also found that many legal departments are now handling an increasing proportion of the work themselves.

This in-house shift is partly due to the cost-cutting that follows a lull in the economy, but also increasingly to service delivery standards if the results of the survey are taken at face value. Nearly three in five (59%) of heads of legal said their primary law firms 'never' or 'rarely' asked them how their service could be improved.

Nowhere is this more evident than when it comes to technology spending – many law firms' efforts at enhancing client relationships through IT are failing to hit the mark.

One of the key findings of the Legal Director/Oyez Legal Technologies survey is that a large number of general counsel fail to equate technology with the delivery of quality legal services.

Asked to rate the major issues faced by the legal department on a scale of 1 to 10 (where 1 is 'not at all important' and 10 is 'extremely important'), the introduction of technology only rated a score of 5.02.

This falls well behind the score of 8.77 for the quality and efficiency of legal services delivered, the need for accurate budgeting (6.77) and the reduction of costs (6.75).

Kelvin McGregor, director of strategic development at Oyez Legal Technologies, believes that these issues are integral to each other.

"Reduction of costs is clearly something that general counsel are focusing on, but it seems that they are not linking it to technology," he says. "They are also not linking technology to the quality and efficiency of the legal services delivered and yet we all know that they are tied together."

One of the problems that legal departments often face on the technology front is that their IT needs are usually subservient to those of the company as a whole.

This may explain why only three out of 10 general counsel say they are 'very well' supported by their organisation's IT strategy and resources.
It seems likely that some of these departments are large enough to have IT staff assigned to them on a permanent basis or are given the freedom to acquire the products and services they need.
Bjarne Anderson, director of projects and operations at the legal department of Barclays, says his team is lucky enough to have full-time staff.

"IT is the way in which more and more departments will be forced to do more things with fewer resources," he says.

Nearly half (48%) of the heads of legal are lukewarm about the level of IT support they receive, saying that they are 'quite well' supported, while some 14% feel they are 'not very well' supported and 8% are 'not at all well' supported.

Departments are not getting much help either from their law firms, which are undoubtedly failing to explore the opportunities they and their clients have to reduce costs through the effective use of technology and associated services.

In another example of how law firms are failing to look beyond their own short-term interests, the number of firms that give their clients proactive advice on how to reduce costs through technology is very much in the minority.

Only 22% of heads of legal say that firms give proactive advice on this area at all. Of the 78% who never receive advice, almost half believe that they should be given assistance, which represents an untapped marketing opportunity for law firms.
Oyez' McGregor believes general counsel need more education about what can be achieved through technology and law firms have a key role in this. "Where else are they going to get the advice from?" he asks.

Another surprise thrown up by the survey is how few law firms actually consult clients over their own IT strategies. Just 13% of legal departments report that they have been consulted by law firms in this way.

Given the amount of money these firms are having to spend just to keep up and the fact that they are buying these products in the hope of improving the delivery of their service, this seems short-sighted.
Of the 87% of heads of legal who have never been consulted by their firms over their IT strategy, more than a third (37%) believe that they should be.
This lack of consultation may go some way to explaining the survey's finding that the much-vaunted 'virtual dealroom' has yet to impress in-house lawyers.

Despite a blitz of marketing by the top law firms, it appears that the day when electronic dealrooms are the standard method of handling a merger or acquisition is still some way off.

According to the Benchmarker survey, less than one in seven in-house lawyers have used electronic dealrooms, either for due diligence or for transaction management.

This finding may be a reflection of a number of things.

First, the resources required to develop dealrooms means that they have remained the province of the top firms, which are attempting to outdo each other by spending more and more on the products.

Second, the drop in M&A activity means that fewer companies will have used them than might have been expected when they were first introduced.
Third, and arguably most importantly, there are still a number of clients who are concerned about using dealrooms.

Anderson says his department is looking at how to use them, but adds that a dealroom would have to meet the strict security measures that the bank has in place.

"The privacy of our clients' data is our highest priority," he says. "The biggest thing that is holding the use of dealrooms and extranets up, but which we will not lower our standards on, is the security aspect."

Those general counsel who have used dealrooms find that they are a help. Asked to rate their usefulness on a scale of 1 to 5 (where 1 is 'of no use' and 5 is 'extremely useful'), dealrooms were given a rating of 3.9 for transaction management and 3.4 for due diligence.

Having said that, the new technology is clearly not bowling them over. In a separate rating of the effectiveness of nine types of new initiatives introduced in the past 12 months -including using secondments or paralegals and using alternative billing arrangements – the use of dealrooms came in ninth and last.

McGregor believes clients are likely to find dealrooms more useful as they get more comfortable with using them.

For now, many of those departments that have used dealrooms are likely to have only used them once or a handful of times.
Demand for dealrooms is still strong, suggesting that the investment made by the top firms has not been wasted.

Of those heads of legal never to have used a dealroom, two in five (38%) claim that they will consider using them in the future.

As the technology becomes increasingly available to a wider set of firms, to the extent that it almost becomes an 'off the shelf' package, so electronic dealrooms could yet look become a fixture in the modus operandi of M&A.