• Investment in technology a strategic priority for international in-house counsel to improve efficiencies and team performance
  • But two thirds (64%) have difficulty in securing budget and one third are concerned about lack of IT skills in their team
  • Disconnect identified between what law firms are investing in and what clients actually need

As the role of the in-house legal team across the globe continues to evolve towards being a trusted strategic adviser to business, a new report from Eversheds has found that GCs are facing significant barriers to making the most of the efficiencies and the productivity boost that technological innovation could provide. Lack of company buy-in to secure the required budget, a deficiency in specialist digital knowledge, and a digital skills gap in their team are all identified as obstacles to progression.

The Looking Glass 2016 report from Eversheds and Winmark assessed the views of more than 200 senior legal leaders from international in-house and private practice teams to find out how digital technologies are transforming the delivery of legal services around the world.

With the top strategic priority for in-house counsel being to increase team efficiency and impact (68%), they are acutely aware of the benefits investing in digital technology could offer their team and the wider business. 87% want to use it to find better ways of storing and retrieving information, 61% want to automate work to save time so they can focus on high-level strategic work, and 60% see it as instrumental in improving work-flow management. Although this technology will be used to take on some of the day-to-day tasks of the legal team, 90% of GCs surveyed are confident that their staff numbers will either grow or remain stable, as the role of the in-house team changes.

However, despite being keen to maximise the opportunities technology can offer to help position the legal team as advisers at the very heart of a business, the report identified several major barriers in-house lawyers are facing. As well as the two thirds (64%) that have difficulty securing budget, a further three in five (59%) find it difficult to integrate new technology with existing systems, and 56% lack the time needed to truly harness technology to its full capability.

And, although many in-house lawyers have the skills needed to use the technology, when it comes to procurement decisions, more than half (51%) feel out of their depth and unable to judge the full potential of digital innovations (or unable to dedicate the time to understanding this) and how they can improve their working processes. Almost half (44%) are concerned about their team or company’s resistance to change, with one third (33%) concerned their team do not have skills required to use the technology appropriately.

Lee Ranson, managing partner at Eversheds, said:

“The global financial crisis brought in-house counsel to centre stage in many organisations, and as a result we’re seeing an “Americanisation” of the GC role, with in-house teams expected to offer overall strategic advice at the right hand of the CEO.

“The core role of the in-house team – dealing with compliance, data security, etc. – is only getting more onerous. In-house teams need to free up the highly-trained individuals within their teams to focus on work of strategic value and, increasingly, to focus on providing business advice. The digital innovations offered by legal services providers can be instrumental in driving efficiencies to achieve this.

“GCs should desire to position themselves at the heart of business strategy and, this is where they should pitch investment in technology. It is not solely a legal issue. Talking to budget holders in their language – in terms of value to the business, ROI and alignment with strategy - makes it possible to reframe the conversation as one of investment in the bottom line rather than cost..”

The report also showed that two thirds (67%) of law firms said investment in technology is a strategic priority. However, the findings identified major differences between the digital resources firms provide and what clients actually need.

75% of clients required more access to online templates and examples, but only 37% of law firms currently offer this. Similarly, clients want live status tracking, with 54% wanting online access to the status of all matters, but just 40% of firms provide this service. Over half of in-house lawyers (51%) desired a dashboard of all interactions with a firm, which was only offered by 20% of firms, and 42% of clients want to be able to automatically generate tailored reports – something that is only offered by one quarter (26%) of firms surveyed.

Charlotte Walker-Osborn, head of Eversheds’ global telecommunications, media and technology sector continued:

“While it’s encouraging that law firms recognise the need to invest in technology, the report showed that legal services providers need to get better at prioritising client needs when developing digital technologies. There is a significant disconnect between what many law firms think clients want and what they would actually find useful. If law firms can provide digital services that genuinely add value to in-house lawyers, not only will it help strengthen client relationships but it will also help those firms build the case for investment in their own digital technologies and training.

“This is something already ingrained in Eversheds’ business model, so we can look beyond the horizon to anticipate the key changes that will impact in-house teams.”

John Jeffcock, CEO at Winmark, said:

"The gap between in house legal functions and law firms has increased. The reason for this is that the speed of evolution, which includes technologies, of in house legal functions has risen and may continue to accelerate with the surge in appointments of legal COOs. So the gap could get even wider if law firms fail to keep up.

The better law firms are keeping pace and some are even supporting in-house functions on their journey. However, many are being held back by their governance and financial structures. To succeed, a modern law firm needs to run faster and invest more. This in reality may mean less or faster partner consultations and reduced profitability as money is redirected from partners to clients and to investments in future competitiveness."

Suzanne van Montfoort, research manager at Winmark, said:

“Future GCs will need to be more well-rounded than their predecessors. Expert legal advice increasingly needs to be complemented by business acumen, as well as by an understanding of how technologies can be integrated into new ways of working that deliver advantage to the organisation. This requirement for a broader GC skill set will translate into consequences for legal team structure, recruitment, and training.”