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Corporate Law Departments

Legal Department Operations (LDO) Index 2020: Dedicated legal operations comes home

· 5 minute read

· 5 minute read

The 5th (and latest) edition of the LDO Index notes a very strong increase in the number of legal departments that now use dedicated legal operations staff

The pace of change within corporate legal departments has not been swift. Indeed, over the course of several years’ worth of analysis of these departments in Thomson Reuters Legal Department Operations (LDO) Index report, little in the way of significant change has been recorded.

Until now. The fifth and latest edition of the Legal Department Operations (LDO) Index 2020 chronicles a dramatic change in how legal departments are operating, and notes a very strong increase in the number of departments that now have dedicated legal operations staff.

The report shows that the portion of legal departments with dedicated legal operations staff now represents 81% of all legal departments surveyed, a jump from 57% of legal departments with such operations in the 2019 report. (Interestingly, last year’s number was only six percentage points higher than that in the first LDO Index, in 2017, underscoring how dramatic the growth have been over the past year.)

Indeed, these numbers clearly demonstrate how employing dedicated legal operations teams has quickly become table stakes for legal departments in a corner of the industry in which rapid change rarely happens.

Akin to that, 55% of legal departments surveyed in the latest report now call their current pace of current “moderate”, indicating demonstrable change, or “fast”, indicating large-scale advancement.

Priorities remain constant

Despite this new-found appetite for change, the top priorities cited by corporate legal departments remained relatively consistent to past surveys, according to the latest report. Not surprisingly, controlling outside counsel costs is at the top of the list, with a heady 89% of departments calling this a high priority. As part of this, 92% of legal departments say they now routinely report on total spend, breaking down the totals down by law firm.

Other high priorities identified by more than 50% of legal departments surveyed included data security, internal efficiency, use of technology, and a focus on legal operations.

Turning to the challenges they face, legal departments say a growing workload continues to be atop the list, with 68% of departments reporting an increasing volume of work (as defined by the growth in the total number of legal matters undertaken over the past 12 months). As a result, many departments are raising their level of outside counsel spending and expanding the number of law firms they employ, while also bringing more work in-house and increasing budgets for internal technology implementation.

Among these technology plans, tools that allow for spend & matter management are on top of the departments’ shopping list, with contract management, document management, legal hold, and legal research rounding out the top five. Nearly half (44%) of legal departments have increased their use of technology tools in the last 12 months, while 30% have increased their legal technology budget, according to the report.

You can download the fifth edition of Thomson Reuters’ Legal Department Operations (LDO) Index report here.

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