Legal departments face rising tide of challenges in their transformation efforts, EY Law and Harvard Law School Center on the Legal Profession survey finds - Seite 2

Mounting operational and budget pressures
The economic challenges of the past year have added to mounting pressures on budgets – and there has been a steep rise in the cost savings that General Counsel are looking to target. A significant majority (88%) of General Counsel are planning to reduce the overall cost of their legal functions over the next three years, driven mainly by pressure from the CEO and board. The average cost saving being targeted among large organizations – those with more than US$20b in annual revenue – is 18%. This represents a significant increase from the 2019 EY Reimagining the Legal Function Report, which showed large companies targeting savings of 11%.

Technological deficits and contracting inefficiencies
The report finds that more than half (59%) of General Counsel believe that greater use of technology is a way to reduce costs. However, only 50% of law departments have increased the use of technology over the past 12 months, and only 30% of in-house counsel say they have the technology required to do their job. More than eight in ten (83%) say they lack the skills needed to automate processes, while 41% report they lack the data and/or expertise to develop a case for investment into legal technology.

A lack of investment in technology is also impacting revenue growth. Almost all respondents (99%) say they do not have all the data and technology needed to optimize their contracting function. In addition, 97% say they face challenges securing budgets for investment in technology, with C-suite buy-in cited as the biggest contributory factor.

Transforming the legal function and enabling business growth
The wide-ranging challenges to transformation are compounded by rising volumes of work. General Counsel expect legal department workloads to increase by 25% over the next three years, but they anticipate a rise in headcount of just 3% over the same period. Also, three-quarters (75%) of legal departments say growth in workloads will outpace budgets with 87% saying they spend too much time on low-value, routine tasks. As employers fight to attract talent, almost half (47%) say that the increasing volume of low-value work has impacted employee morale.