Shouldering More Work, In-House Becomes Selective with Tech Adoption
A new survey indicates that organizations are wielding tech in an effort to bolster productivity as more legal work is kept in-house. But don't expect companies to drastically increase their technology spend over the next year.
June 19, 2019 at 11:00 AM
4 minute read
This week Wolters Kluwer unveiled the results of its 2019 General Counsel Barometer survey, which solicited responses from 193 companies working across a variety of industries in the U.S., U.K., and other European countries.
The upshot is that 53 percent of respondents said they are doing more and more legal work in-house, while many are eyeing technologies that can help cultivate a more strategic or proactive approach to legal work as opposed to the reactive stance that has historically dominated the industry.
“There's a recognition that that isn't good enough, and so there's this movement to not just [get] out of trouble when there's trouble, but making sure that you never get into trouble in the first place,” said Nathan Cemenska, director of legal operations and industry insight at Wolters Kluwers ELM Solutions.
To that end, general counsel appear to be shifting their attention away from day-to-day legal operations. Only 47 percent of general counsel surveyed in 2019 said that they were the primary employees running legal operations within their organizations, down significantly from the 95 percent who said the same just three years ago.
However, general counsels' move to spend more time thinking about strategy doesn't necessarily mean there's an accelerated adoption of legal tech in-house. When asked about the state of their company's investment in legal technology over the next 12 months, 57 percent of respondents indicated that it would increase slightly, 26 percent indicated that there would be no change and only 15 percent said that it would increase greatly.
Those numbers don't preclude an appetite for technology, but might instead be indicative of other factors that are getting in the way, such as budgetary restrictions or a reluctance to dive too deep, too fast.
“If they try to boil the ocean by changing everything at once, it will crash and burn and they'll lose credibility and people will get frustrated,” Cemenska said.
Instead, legal department technology adoption will likely be filtered through some very specific needs. According to 70 percent of those surveyed, the main reason for investing in technology or increasing technology spend revolves around improving productivity.
When pressed for where technology was expected to deliver the biggest advances in efficiency, 64 percent of respondents said contract management— specifically contract creation, management of the renewal process and risk mitigation. Those considerations may also be driving the ways that companies use AI as well.
According to the survey, 44 respondents indicated that AI is having the biggest impact in contract management and review. E-discovery took the second biggest piece of the pie at 27 percent, followed by managing repeatable legal workflow at 22 percent.
“If you've got 200,000 contracts, you can't take make sense of that on your own. You've got to use technology to do that,” Cemenska said.
He pointed to contract analysis tools, where an AI identifies key terms in a document or PDFs to extract and index data, as an example. Once those solutions are in place, it's easier for an organization to proactively mitigate future risk by, say, identifying problematic clauses hidden within existing contracts.
“Now you can go back and make sure you don't make that mistake again by using the software, maybe by going back and identifying all of the previous contracts that had that sort of language and renegotiating them,” Cemenska said.
The desire to cultivate that kind of efficiency has even spread to the way that corporate counsel engages with mobile applications, which one-on-one interviews alluded to in the survey would suggest are not in wide use by legal departments. Still, the most popular mobile tasks are the ones that favor speed.
For example, 34 percent of respondents favored their workload calendar, followed by invoice approval at 27 percent and invoice review at 16 percent. Cemenska indicated that when it comes to mobile apps, it's all about found time and chores that can be completed in a cab on the way to the next meeting.
“It's almost like being on, I don't know, Tinder or something, where you just give it a quick look and say, 'This is good, this isn't, this is good,'” Cemenska said.
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