Our 2017 Law Department Benchmarking Survey in association with the Texas General Counsel Forum covered expanded topics, going broader and deeper into many areas affecting law departments today. The questions went beyond spend and headcount into areas including:
- Organizational Structure and Alignment
- Staffing By Practice Area
- Firm Usage and Engagement
- Alternative Fee Arrangements (AFAs)
- Preferred Provider Programs
- Resourcing By Tasks
- Technology Use
- Department Challenges and Initiatives
The 158 companies responding to the survey are a wide representation of the law department market. There was greater participation by small to medium size companies and representation of 11 industry segments, including industrial and chemical, healthcare and pharmaceutical, business services and media and government.
Law Departments Continue to Pursue Strategic Operations Initiatives Amid Budget Constraints
Consilio’s 2017 Law Department Benchmarking Survey finds that law departments are focused on strategic initiatives to improve operational performance in an environment of increasing demand and budget constraints. As legal budgets have experienced increased pressure for efficiency, many law departments, especially the larger ones, have embraced solutions such as alternative fee arrangements, including fixed fees and volume discounts, preferred provider programs, insourcing, outsourcing and technology. Law departments of all sizes are embracing operations initiatives to seize control of the legal service delivery model and its impact on the enterprise.
When asked to rank the top challenges that law departments will face throughout 2017 and 2018, budget constraints unsurprisingly rose to the top, with 49% of respondents listing them among the top three challenges. Next was data/information security and privacy at 39%. Increasing and changing regulatory demands, the foremost concern in our 2015 report, remains a major challenge, with more than a third of respondents listing it among the top three.
Outside Counsel Financial Management
Almost two-thirds of respondents said they have AFAs in place or plan to implement them in the next two to three years. Flat fees, volume discounts and blended rates are among the most widely adopted AFAs. Fewer law departments are using more resource- and data-dependent techniques such as performance bonuses, although they registered strong interest in adopting them in the future.
Law Department Technology & Service Providers
Technology usage is significant with more than 5 technologies being used by more than half the participant respondents: legal hold, board management, entity management, eSignature and matter management. Document management topped the list of technologies planned to be implemented with process automation workflow, contract management, eSignature and GRC policy management following. More than half of respondents say they had developed, or were planning to implement a technology roadmap which is always a good, strategic place to start.
Alternative service providers have made strong inroads into discovery data processing and hosting, document review and technology-assisted review. Almost a quarter of respondents are outsourcing discovery and other tasks offshore or onshore. All companies, no matter the size, reported lower usage of technology assisted review and document review internally. For document review, large companies have utilized alternative service providers more frequently than small and medium size companies whom are still relying on outside counsel for document review.
For more information about the Law Department Benchmarking Performance Series or our solutions to assist law departments on their challenges, contact Robin Snasdell at firstname.lastname@example.org.