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October 28, 2019

Corporate Legal Departments Increasingly Relied Upon to Do More, says 2019 Legal Tracker Legal Department Operations (LDO) Index Report

DALLAS, Texas, October 28, 2019 — More than two-thirds (68 percent) of legal departments said they are facing increasing legal work demands. This is among the findings from the fourth edition of the “Thomson Reuters Legal Tracker Legal Department Operations (LDO) Index Report,” that looks at the qualitative and quantitative insights into the operations of corporate legal departments.

This latest report has expanded its commentary to examine trends over the last three years. The report reveals that the priorities of corporate legal departments remain consistent – controlling outside counsel costs; using technology to simplify workflow and manual processes; focus on internal data security; driving internal efficiency in delivery of legal services and focus on legal operations.

Other key findings of the study include:

  • Controlling costs continues to be the highest priority issue among legal departments, with 90 percent ranking it as a high priority
  • More than half of respondents (53 percent) reported they are doing more work in-house, and 41 percent of companies said bringing more work in-house is a high priority
  • Law departments are adopting more technology. Seventy percent of departments said that using technology to automate and reduce manual work is a high priority and 51 percent of departments increased the number of technology tools utilized in the last 12 months
  • More than half (57 percent) of corporate legal departments have dedicated legal operations functions. However, the percentage of legal departments increasing their staff specifically to focus on legal operations decreased slightly to 17 percent
  • 61 percent of legal departments have some priority on relying on alternative fee arrangements (AFAs) as opposed to hourly rates, with the majority of organizations having less than 20 percent of their outside spend through AFAs
  • 68 percent of legal departments said they are facing increasing legal work demands – the highest in report history

“It is clear corporate legal departments continue to face the pressures of addressing a growing workload. Legal departments, and legal operations teams, continue to explore new ways that people, process and technology can impact the delivery of legal services and management of the legal function to control cost, increase efficiency, maximize effectiveness and ultimately demonstrate value,” said Chris Maguire, Customer Proposition Lead for Large Corporate Accounts at Thomson Reuters. “By benchmarking performance and understanding industry trends, legal departments continue to become more sophisticated in approach to control spend and maximize their organization’s competitive advantage.”

The report also includes benchmarking data from more than $90 billion in legal spending from more than 1,400 legal departments and 62,000 law firms, as well as responses to a July 2019 survey of corporate legal departments that use Legal Tracker, the world’s largest legal index. The survey received responses from 210 legal departments, including 75 companies in the Fortune 1000, and responses across 34 industries, including strongest participation from companies in the Healthcare, Financial Services, Energy & Utilities, Manufacturing, and Retail industries.

The 2019 Legal Tracker LDO Index Report can be downloaded here.

Thomson Reuters

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Thomson Reuters
Jenn Riggle
jenn.riggle@thomsonreuters.com
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