EY Law and Harvard Law School survey shows that C-suite are reluctant to invest in legaltech
Fewer than a third of in-house counsel globally believe they have the technology they need to do their jobs effectively, with nearly all legal departments facing challenges to secure budgets for tech investment, according to a new report from EY Law and Harvard Law School.
The EY 2021 Law Survey found that 70% of in-house counsel don't have adequate technology, with 97% saying that they are struggling to secure investment in legaltech.
That comes at a time when legal departments are facing increased expectations to do more with less – workloads are expected to rise by 25% over the next three years, with three-quarters of respondents not expecting budgets to keep pace with that additional work. Respondents said the biggest impediment to securing tech budgets is buy-in from the C-suite.
Cornelius Grossmann, EY Global Law co-leader, said: “As the world starts to move toward economic recovery, enabling growth will be a crucial priority for organisations all over the world. If organisations are to thrive and businesses are to remain compliant, law, procurement and commercial contracting departments will need to ensure they are ready to face an ever-growing list of regulatory risks.”
He added that business leaders must transform their legal departments if they are to operate efficiently, be competitive and retain talent.
More than half of GCs (59%) believe that greater use of tech can help them reduce costs, yet only half of legal departments increased their use of technology over the past 12 months.
In addition, that lack of tech investment means GCs and in-house counsel are often wasting time on work that could be automated – 87% of respondents say they spend too much time on low-value, routine tasks.
Kate Barton, EY Global’s vice chair for tax, said: “If legal departments are to remain effective in our increasingly global, complex and interconnected regulatory environment, they must act fast to transform their legal operations and invest in the right technology. Only then will they be able to keep pace with a fast-growing list of regulatory, cyber and operational risks confronting organisations today.”
The survey included responses from more than 2,000 business leaders from 17 industries and 22 countries and included interviews with 1,000 law department leaders.
Research published by Thomson Reuters last month found that nearly a third of legal departments globally are upping their spend on technology, with 44% increasing their use of tech tools. This was against the background of frozen or declining overall budgets and rising workloads, both as a direct result of the Covid-19 pandemic.
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