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A New World of Digitalization for Legal Departments: A KPMG Benchmarking Survey

Digital transformation and strategic technology investment in global legal departments for enhanced efficiency and compliance.

June 29, 2021

Given the trepidations the pandemic has brought us, it is best to face the future with the help of the Global Legal Department Benchmarking Survey which was participated by companies from around the world in different industries. The survey provided distinctions among the responding legal departments in Europe, and Asia.

Legal Department’s Responsibility

Legal departments have become an important part of every organization. They do not only mitigate risk but also strengthen relationships within and outside the organization.

The report gave a deep insight into the current roles of legal departments. 18 % of them answered that they manage the contract documents after contract conclusion and termination. And 44% stated that the contracts are managed by the respective business unit and are therefore not accessible to the legal department. 6% of respondents said that contract management is not assigned to a management function in their company.

Legal Ops & Technology

Along with the goal of improvement comes the smart utilization of technology. With the great benefits of technology, 74% of legal departments who responded use IT tools mainly for communications and 65% use them for legal research tools. 55% also plan to apply tech to information extraction from documents, 54% for document automation, and 45% for data analysis.

The image is a graphical representation of IT solutions that legal departments are using, planning to use. The solutions range from "Communication tools" at 74% in use to "Blockchain, smart contracts" at 2% in use. Each solution is represented by four colored bars indicating percentages for "In use", "Introduction planned", "Under consideration", and "Not planned". For instance, "Document automation" is 24% in use, 28% introduction planned, 26% under consideration, and 22% not planned.

In general, most legal departments are still on the fence about spending more on legal technology and when they were asked about these the top 3 reasons are: 45% said that they decided to do other initiatives instead, 36% have no idea what to invest, and 15% lack knowledge. The survey showed that 67% have not allocated funds for it so only 33% had earmarked funds for their department. Of those that had a budget, the average amount was US$248K and the amount set aside is just 13% of the total budget spent.

Trends and developments

When it comes to challenges, legal departments do not come up short. Handling multiple areas of legal practice while safeguarding the interest of the company and its clients simultaneously. Not to mention, complying and keeping up with numerous rules and regulatory stipulations from time to time.

The survey asked what the heads of legal prioritize in planning for the future of their departments to lay out the foundation of identifying current challenges. It showed that the top one is Further Internationalization of legal function with 85% followed by Optimizing processes and workflow with 84% and 80% gave importance to Providing proactive legal advice to the business.

The image shows the top organizational and strategic priorities for legal departments. Challenges include "Further Internationalization of legal function" at 85%, "Optimizing processes and workflow" at 84%, and "Providing proactive legal advice" at 80%. Other priorities encompass cost optimization, workload management, knowledge sharing, and budget handling. Colored bars depict the distribution of priority levels for each challenge.

As for investments, 75% will increase funds for the success-critical expertise and knowledge of lawyers, 65% wants to invest in improving control and efficiency of their processes coming close to that number are heads that plans to increase the transparency of work processes. 61% also plans to increase automation.

Budget Concerns

GDPR spearheaded the focus on protecting consumers' data and this resulted in an obvious increase of new laws and regulations in the past years due to the rise of usage in technology. This also meant that legal departments' efforts on compliance. The expenditure of the legal departments of all the companies surveyed averaged US$2 million per US$1 billion in sales. The average internal expenses of the legal departments surveyed are US$291K per lawyer.

There is clearly a visible path that the legal industry is on its way to adopting new technologies which are concurrent to the global digitalization happening across other industries. A more in-depth insight was tackled by InfiniGlobe CEO, Mori Kabiri, in a Forbes article where he shared the importance of adapting to the changes after the disruption created by the COVID-19 pandemic.

After choosing the best technology, implementation is not a one-size-fits-all process that is often not considered by many. Large-scale changes would need better expertise and perspectives from professionals. Our consultants have decades of legal technology assessments for many law departments of fortune 500 corporations, reach out to us at or at (833) LGL-TECH.


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