Technological transformation is firmly on GCs' agenda

Technological transformation is firmly on GCs' agenda

In-house legal teams face increasing pressures

New research has laid bare the pressures in-house legal teams are facing, as the digital revolution begins to take hold in the legal market. The research, commissioned by Konexo, the unique global alternative legal services provider – a division of Eversheds Sutherland – reveals that almost two-thirds (63%) of in-house practitioners feel that the pressures they face today have increased compared with just 12 months ago.

An increasingly challenging landscape

The combination of increasing volumes of work for in-house legal teams and a business environment with a growing focus on efficiency and an increasing regulatory burden on companies is contributing to this pressure. The research shows that 62% of in-house teams are experiencing greater pressures to reduce operational costs than 12 months ago. The main challenges identified in the modern environment for in-house legal practitioners were a lack of resources (cited by 41%), cost pressures (38%), and perhaps as a consequence, team culture, which was listed by 43% of respondents.  

The changing role of a GC

Not only is there significant pressure on resourcing, but at the same time legal teams are increasingly finding that their role is transforming. Over half (55%), of in-house teams feel they play a more strategic advisory role in their organisation compared with 12 months ago, and 59% feel their legal team is more integrated within the wider business function. However, this shift towards becoming more strategic brings further challenges to meet in enabling the legal function to effectively manage their workstreams.

The role of Alternative Legal Service Providers (ALSPs) and legal technology

The majority feel legal technology has a key role to play in the modern in-house legal function, and there is a sense of optimism about this. Indeed, 63% of those surveyed believe that legal technology can increase operational efficiency, and an overwhelming 96% say that legal technology will improve their working environment, both now and in the future.

However, there also are concerns over the challenge of effectively adopting and utilising new technologies, as 63% say legal technology will fail without consultative expertise. Nevertheless, since only a small minority of respondents (19%) were planning to respond to the pressures by outsourcing more to their legal firms, it is clear that for the majority the future lies in embracing legal technology.

The use of technology in in-house legal departments is evolving from enabling centralisation, through tools such as document and email management tools (currently used by 61% of respondents), to moving towards greater use of document automation tools, which 54% believe their organisation will implement in the future. There is also a focus on the need to use data analytics more intelligently.

Less than half of those surveyed currently believe that their organisation is utilising data effectively to monitor workflow, manage knowledge and demonstrate their value to the business. Employing new technologies and working with suppliers in new ways will free up the time of in-house lawyers and enable them to prioritise strategic work. Nearly half (46%) of respondents are engaging with ALSPs to assist them with the evolution of legal technology and its growing applicability to in-house legal functions and 59% of respondents stated that alternative legal service providers will improve the quality of work for in house teams by undertaking the routine, lower risk work.

Graham Richardson, Partner and Head of Konexo, comments:

“General Counsel today are operating in a rapidly evolving business landscape. Despite developments in the sector, legal services have not yet been at the forefront of this evolution. However, as legal teams are increasingly asked to do more with less, technology, new operational processes and big data are rewiring how in-house legal professionals conduct their work.

“There is significant scope for innovation in the industry and there is a real opportunity for in-house teams to assume a more strategic purpose in their organisations and outsource more, but not back to the traditional law firm model. Technology driven ALSP, with fixed-price models, will be a big part of the solution and we will continue to see the rise of legal managed service providers.”

Download the full report, The New Landscape: an in-house perspective, here.

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