Wolters Kluwer and the European Legal Tech Association (ELTA) have published a new benchmark report that looks at the impact of digitalisation on European corporate legal departments, which finds that budget allocation is the main challenge to acquiring legal technology
Drawing insights from an extensive survey encompassing over 520 in-house legal team members, which took place between May and August 2023, the report examined the current state of digital transformation within in-house legal teams.
More than a quarter (27%) of legal departments said they do not have a digital strategy in place. Of those who said they did have a digital strategy in place, 38% said that the digital strategy was only in place for the next 12 months and is not long-term.
Notably, just under half (46%) respondents said their department now has a “legal operations function”, which includes teams who are responsible for technology adoption and optimizing digital processes. However, securing tech budget is said to be a major challenge for legal departments, according to 57% of respondents, and 38% revealed the absence of a specific budget earmarked for digital tools. This number rises to 43% when respondents stated that their department’s annual legal spend was higher than €100,000.
Legal departments are currently using a wide range of methods to manage their contracts and legal documents. 43% are using shared drives, while 30% are using contract lifecycle management software. Less popular methods are the paper archive, used by 11% and spreadsheets, used by 5%.
Return on investment is the most important factor influencing the legal department’s decision to purchase technology products and services, according to 66% of respondents. Slightly less than half say training and support and customisation are important factors. The least important factors that influence the decision to purchase include the financial viability of the vendor, the ongoing relationship with the vendor, and speed of delivery.
Respondents had a wide range of opinions about how they expect artificial intelligence to impact their profession, however the outlook is generally optimistic. They believe AI can help improve efficiency, reduce time spent on mundane tasks, and accelerate workflows. Most seem to think the transformation will occur gradually over the next few decades, and some predict that AI will replace some junior legal department and legal secretarial roles in the near future.
Commenting on the findings, Sergio Liscia, vice president & general manager of legal software at Wolters Kluwer Legal & Regulatory said: “Although the necessity and benefits of digital tools are clear to legal professionals, findings of the survey indicate that legal departments are still at a relatively early stage in their digitalisation journey. Nevertheless, it is evident that legal professionals are aware that technology will be a key ally in addressing their challenges, including the most urgent ones such as process structuring, centralising legal data, and managing heavy workloads.”
To access the report, which includes all the key data about the survey participants, click here: https://www.wolterskluwer.com/en-gb/know/legisway-benchmark-for-legal-departments