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Corporate Law Depts Adopt Key Legal Tech Less Than Half the Time

Sam Skolnik BLOOMBERGLAW.COM

Not one of 14 well-known types of legal technology has been adopted by half of corporate legal departments, according to a new benchmark survey.

Between 38% and 44% of respondents use even the most popular forms of legal tech—eSignatures, and contract and document management tools—and just 14% used analytics, the survey found.

That finding was a surprise, especially given the growing use of technology in both corporate legal departments and law firms, said Catherine J. Moynihan, associate vice president of legal management services for the Association of Corporate Counsel, which sponsored the survey along with the legal search firm Major, Lindsey & Africa.

“We expect that those numbers will go up” in future surveys, Moynihan said.

The survey, conducted between January 30 and April 12 of this year, included more than 500 law departments. Respondents reported a median of four lawyers per legal department, and a median legal spend of $1.6 million in 2018—half of which was paid to outside counsel.

Companies spent the biggest portion of their internal legal operations budgets, a median of 79%, on in-house lawyer compensation and benefits, as opposed to non-lawyer salaries and other costs. 

Sharing the Work

The survey also gauged how certain legal tasks were divided up between in-house teams, their outside counsel, and alternative legal service providers. Ninety-seven percent of respondents, for example, said they handled contract review and drafting tasks, while in 16% percent of the time, outside counsel performed those tasks. This work went to alternative service providers only 3% of the time.

Other workflows were distributed more evenly, including in litigation-related case and project management.

Respondents included law departments inside many well-known companies like General Mills, John Deere, and Panasonic. Almost two-thirds of the corporations that responded were based in the United States.

About 40% of the organizations surveyed, which also included some colleges, religious organizations and other nonprofits, earned total gross revenues of $1 billion or more, including 12% with revenues of more than $10 billion.

The respondents will provide updated data to ACC on a regular basis, said Moynihan, so that trends can be tracked. Formal updates will be published every two years, she said.

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