Tag: Surveys

Five Legal Operations Trends Uncovered in the CLOC 2021 State of the Industry Report

Posted on June 10, 2021 by - Business Process Management, Enterprise Legal Management

What are the latest legal operations trends affecting corporate legal? According to the Corporate Legal Operations Consortium’s (CLOC) 2021 State of the Industry Survey report, the median external spend increased by 84%, more work has moved in-house and legal departments continue to grow.

In collaboration with the Association of Corporate Counsel, the survey solicited responses from 200 organizations, 48 of which were Fortune 500 companies, across more than 22 industries in 31 states and 21 countries. Respondents spanned a wide range of industries, with the most (26%) coming from the technology sector.

1. External Legal Spend Up by 84%, But Internal Legal Spend Catches Up

While outside legal spend varied widely across survey participants, the overall results showed a marked increase in external legal expenditure in 2020 as compared to 2019. Median outside spend nearly doubled in the past year, up to $14.5 million from $7.9 million the previous year. (For those looking to control legal costs, here’s a good place to start.)

The median internal legal spend wasn’t far off, coming in at $13.3 million. While there was some variation based on the size of the companies, overall legal spend across all survey participants broke down exactly 50-50 between internal and external legal expenditure. In the previous year, the split came in at 60-40 in favor of external spend.

2. In-House Counsel, ALSPs Taking on More Work

Despite increased external spend, companies are bringing more work in-house – something indicated by past legal operations trends founded by CLOC. In fact, 39% of respondents reported moving more work in-house in 2020, compared to 28% the year before.

The prominence of alternative legal service providers (ALSPs) continued to slowly increase over the past year, highlighting other significant legal operations trends. For example, when it came to ALSPs, 71% of respondents reported using the same number of ALSPs as in the previous year. However, 24% increased the number of ALSPs they used and 21% reported shifting more work to ALSPs as opposed to law firms. Three-quarters of the participants said that the law firm/ALSP balance remained the same as in the previous year.

3. Legal Operations Trends Point to Larger Legal Departments

Among the companies surveyed, the average size of the legal department was 104 full-time employees, with smaller companies reporting fewer legal department employees and larger companies reporting larger legal departments. The entertainment/media, insurance and biotech/pharma/life sciences sectors reported having the most full-time employees in their legal departments.

Increases in legal department headcount mirrored those of last year – 40% of respondents in 2021 said they increased their number of dedicated legal operations full-time employees, just as they did in 2020. The most notable increases in headcount were seen at mid-sized companies. The average size of legal operations teams also increased across both industry sectors and company sizes.

4. Clarity Around Legal Operations Responsibilities – Proof of Function’s Maturity

Not surprisingly, the top-five most common services provided by legal operations were the same in 2021 as they were in 2020, according to survey participants. This signals the growing influence and prevalence of legal operations on the whole – meaning there’s a consensus in the industry on the role and value of the responsibility.

The most common legal operations services include:

  • Process development and project management
  • Data analytics
  • Technical and process support
  • Vendor management
  • Financial management

5. Priorities for 2021 and Beyond

According to the legal operations trends uncovered by CLOC, in-house legal departments are also looking ahead to shifting priorities. Implementing a Diversity and Inclusion program was ranked as the top priority in 2021 for 61% of respondents, up from a fifth-place ranking the previous year. Other priorities included automating legal processes (as exemplified by this contract lifecycle management case study), implementing new technology and right sourcing legal work.

You can read the entire survey report here.

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Legal Ops in 2020: A Look at How Law Departments Have Weathered the Storm

Posted on January 12, 2021 by - Business Process Management

There’s no question that 2020 was an unusual year for organizations across all industries – and their law departments. From being forced into working from home overnight to embracing new technologies at an accelerated pace, law departments have adapted in ways they never imagined.

The Blickstein Group recently released its 13th Annual Law Department Operations Survey, titled “Weathering the Storms of 2020.” The findings show that, despite the pandemic’s unprecedented challenges and novel demands, corporate law departments have weathered those storms well.

As the survey points out, the world changed dramatically in the year since the 2019 Law Department Operations Survey. The impacts of those changes, however, were less dramatic. Here are just some of the critical insights about legal ops in 2020.

The Biggest Challenges

Survey respondents were asked to identify their most significant challenges in 2020 relating to law department functions, and notably, COVID-19 was nowhere near the top of the list. Instead, the top-three challenges identified were:

  • Cost containment and savings/managing the budget – 60.3%
  • Business process improvements – 56.2%
  • Departmental resources (e.g. funding for personnel/technology, personnel retention) – 38.4%

Concerns about cost containment are nothing new, as managing costs and budgeting have long been a focus for legal ops professionals. The same is likely to remain true throughout 2021 and into the future, making Enterprise Legal Management solutions – which simplify legal operations by analyzing legal spend, minimizing company risk and driving process efficiency – valuable investments.

Delivery of Work Product

Disruption to everyday business practices and routines seemed to come from all sides in 2020, but law departments didn’t let that stand in their way. When asked if they noticed a diminished ability of their internal legal teams to deliver work product due to the pandemic and working from home, a staggering 94% of respondents said no.

Much of this ability to avoid disruption can be attributed to advanced technologies that support remote legal operations management work, allowing legal departments to deliver the high-quality work product from anywhere. Automation and AI also played a major role in seeing legal ops through the pandemic. For example, a tool like Review AI automates contract review, cuts contract review time by up to 70% and increases accuracy in reviewing, redlining and editing all types of contracts. These tools are critical to improving efficiency and eliminating manual tasks that would otherwise present barriers to remote work

Focus on Diversity

The pandemic wasn’t the only thing grabbing headlines in 2020. Diversity and inclusion were perhaps more in the spotlight than ever before. While companies across the country struggled to figure out how to best address diversity and inclusion within their ranks, what was clear was that more and more law departments were turning the focus to these issues. When asked what employee-related metrics they track, 72.7% reported tracking diversity, up significantly from prior years’ surveys.

While there’s no one-size-fits-all solution for improving diversity and inclusion, technology can play a significant role in achieving progress. At Onit’s recent Hack the House competition, one team – Team Diversity – built a solution to expand opportunities for diversity and an equal opportunity workspace using Onit Apptitude in just three weeks. (You can see a demo here.) This is only one example of how legal ops professionals can use institutional data to address workplace challenges and track progress on important issues.

Law Firm Rates

Law firm rates have increased in 2020, according to law departments. When asked how overall law firm rates changed in the past year, only 3.6% of law department respondents reported any decrease. In fact, 69.7% reported an increase, while 26.8% said that rates remained flat. Participants indicated they expect this increase to continue in the next 12 months, with 46.4% expecting an increase.

There’s no reason to think these trends won’t continue for the foreseeable future. That means it’s more important than ever to be able to track invoices and ensure that your law firm’s charges are accurate and in-line with your billing guidelines. With Onit Enterprise Legal Management, you’ll have the data you need to show the value your law firms are providing to the organization in exchange for the rates they’re charging.

For more insights on the state of legal ops in 2020 and how the pandemic has impacted law department operations, you can download the entire survey here.

Three Surveys of Interest for Legal Operations Management Professionals

Posted on December 10, 2020 by - Business Process Management

Data is the cornerstone of operations, which is why this blog post focuses on three surveys of particular interest for legal operations management professionals.

Data, Business Strategy and Higher Profitability 

In the 20th Global C-Suite Study, IBM surveyed more than 13,000 C-suite executives around the world to learn more about their organizations’ use of data and how they drive value from it. The study identified four stages of the data journey, including highly sophisticated Torchbearers who have aligned their data strategy with their business strategy, and Aspirationals, those who are just beginning to capture and explore the value of their data.

Unsurprisingly, the Torchbearers lead all other levels in revenue growth, profitability, innovation and managing change.

How do they manage this? The study provides numerous details, but one area in particular is especially helpful. To gather, share and eventually drive better business performance with data, Torchbearers adopt and extend their business platforms to external parties like partners and customers. It provides this example: “A platform that links real estate agents, home inspectors, insurers, and mortgage lenders, for example, puts the customer at the center of a more seamless experience.”

This approach can be replicated with similar success within the microcosm of corporate legal. With a unified, intuitive platform, corporate legal can collaborate across the enterprise (marketing, sales, R&D, HR and more) and outside of it with law firms, legal service providers and other stakeholders. Not only is the level of support and responsiveness enhanced, but legal operations are collecting valuable data to analyze for performance, spend and more.

Modernizing Legal Service Delivery

The 2020 Legal Operations Survey from Deloitte found that 86% of in-house counsel see “an opportunity to modernize legal services provided to their stakeholders.” However, they still have obstacles to overcome, such as a high-volume of time spent handling manual tasks (71%) and a lack of metrics to provide insight into completed work for in-house lawyers and external parties.

Legal operations professionals might find this data point especially interesting:

“77% of respondents felt their legal systems were not integrated with a consistent data taxonomy to allow for visibility into workflows and real-time data.”

The Pandemic Proves Just How Valuable Legal Operations Management Professionals Are to Their Employers

A new survey covered by Law.com shows the pandemic’s effect on corporate legal.  Altman Weil’s survey gathered responses from more than 100 CLOs, finding that 66% of them say the pandemic has decreased their companies’ revenues. Unsurprisingly, 44% say they will reduce 2021 budgets. A decrease in money correlates with these data points:

  • One-third said they have requested additional discounts from law firms
  • 11% said their law departments had to lay off employees
  • 77% said their workloads have increased

One bright spot: Legal operations professionals are invaluable during times like these and law departments recognize this. The survey found that:

“None of the CLO participants reported that their companies had laid off a legal operations manager during the past year. Meanwhile, 75% of legal departments with 50 or more lawyers had at least one legal operations manager in the house and half of all CLOs said they had someone in that role in their department … ”

Investing in legal operations has been an ongoing trend. For example, the CLOC 2020 State of the Industry Report found that:

The size of Legal Operations functions has continued to increase through a combination of full-time employees (FTEs) and contractors as teams demonstrate more impact.

Conclusion

Legal operations management professionals continue to approach their data-driven discipline with innovation. Here are three examples.

  • The Onit Hack the House hackathon, where they had three weeks to create Apps that address critical business challenges across IP, HR, compliance and more. (Voting on the winning App is open to everyone, by the way. Your vote enters you for a chance to win an electric scooter. The link also includes demos.)
  • Three teams of legal operations experts debated the best way to control costs for a fictional corporate legal department. You can see who won here.
  • The Legal Marketing Association Annual Conference featured a presentation with a head of legal operations, a partner for an AmLaw 200 law firm and a Legal Lean Sigma expert to explain how they worked together to create stronger relationships and results. You can read more about that here.