The Corporate Legal Operations Consortium (CLOC) released its 2019 State of the Industry report last week, which suggests that many corporate legal departments are taking a more strategic approach to folding legal technology into their operation. 

Comprised of responses from 213 companies spanning 30 industries and 18 different countries, the survey found that respondents that developed a technology roadmap spent three times more on technology than other organizations who have yet to put pen to paper. Nearly three-quarters (72 percent) of respondents had developed that roadmap.

Mary Shen O'Carroll, president of CLOC and director of legal operations, technology and strategy at Google, chalked this up to the time and energy involved with bringing new technology into a department's ecosystem.

“Systems and tools require a huge investment of resources to both implement and maintain, so it doesn't surprise me that those who are taking the time to think through and plan for them are getting the budget for them as well,” she said.

There may also be interesting correlations between roadmaps and the use of AI. Out of the 12 percent of survey respondents who indicated that they were currently using AI with their tools and processes, 84 percent also had or were in the process of developing a technology roadmap.

Whether or not the proliferation of roadmaps will help to further the adoption of AI remains to be seen. Less than half (45 percent) of survey respondents indicated that they were exploring AI to reduce workload, improve performance or gain additional insights.

“It's still early days for AI in legal departments,” O'Carroll said. “While there is a ton of promise, the initial investment is still very high and most companies are still focused on implementing some of the more foundational systems and tools.”

That doesn't mean companies aren't spending plenty of cash, though. Per the survey, the average legal technology spend for mid-size companies with in-house engineering resources in 2018 was $1 million, while those without such resources spent an average of $977,000.

Still, O'Carroll pointed out that a robust marketplace for third-party solutions has somewhat negated the need for corporations to invest resources in producing their own systems and tools.

“With the growth in demand fueling the market, we're seeing more developments, more market entrants, and more offerings that have the potential to meet our needs off the shelf,” O'Carroll said.

The breadth of the market is particularly apparent in the two most popular solutions categories identified by survey respondents: e-billing and contract management. While respondents appear to be using e-billing (78 percent) and contract management (65 percent) solutions in almost equal measure, the contract management domain is much more fragmented. The 112 companies who identified themselves as using a contract management tool sourced those solutions from more than 30 vendors, but just five e-billing vendors accounted for 60 percent of the market share.

Regardless of the difference in the marketplaces, e-billing and contract management tools share a practical utility that might be driving their popularity.

“Companies of all sizes, in all industries and all over the globe, all have outside counsel spending, contracts, and signature processes to manage, and each of these systems offers significant return on investment through data transparency and general efficiencies,” O'Carroll said.

Third party solutions aren't the only place where corporate legal departments expect to invest in the future. According to the CLOC report, 53 percent of respondents are using an alternative legal service provider, a 34 percent increase over last year. That usage is expected to continue expanding.

“The use of ALSPs is no longer foreign and new, so there is more trust in the quality of work and more companies have accepted them as part of the resource mix,” O'Carroll said.