Lawyers guilty of snubbing tech: report

Canadian lawyers talk a big game on innovation and technology. But when push comes to shove, few in-house lawyers at big companies see investing in technology as a top priority.

This is a surprising finding from a Deloitte survey of top in-house lawyers and representatives of law firms. Even though a majority of the lawyers surveyed profess that investing in technology can boost efficiency, only 15 per cent say they’ve made technological improvements a top priority within their organizations.

At about 100 respondents, the survey sample size might seem quite small. But the survey was targeted at Chief Legal Officers or CLOs — that is, the C-suite level lawyers who control a company’s legal budget and manage its in-house legal team. These days, legal conferences are stuffed with discussions and lectures about how law is going through rapid change.

Firms that have made investments are keen to talk about it, too. On Tuesday, Paul Rawlinson, the chairman of global law firm Baker & McKenzie LLP, was in Toronto to talk about the opening of the firm’s new “collaboration lab” in Toronto.

Yet the Deloitte study shows that when you poke beneath the surface, a lot of Canadian lawyers still don’t know what the future has in store for the profession.

Deloitte’s focus on the general counsel community is especially interesting. In-house legal teams have to fight for budget and attention within the companies they serve, and this should put them on the vanguard of change within the broader legal profession.

“Our view is that in order to stay relevant, legal departments must align with the key performance indicators of the broader business,” the report states.

CLOs accept that technology could improve the efficiency of their workflow, contract management, regulatory compliance, and litigation management, the report finds. Yet even though 90 per cent of the respondents said they have the authority to invest in such technology, more than 50 per cent said they don’t expect to change their investments in technology over the coming year.

A whopping 90 per cent of CLOs say they’re happy with the service their companies receive from outside law firms. But external counsel might want to hold off on the high fives.

Less than 50 per cent of in-house legal departments are conducting any detailed analysis to assess their external legal spending levels, and that’s mainly due to a lack of relevant and readily available data, the report states.

It’s easy to see how this could change. Companies of all shapes and sizes are embracing analytics, and these will eventually find their way into legal departments. CEOs will be demanding that general counsel produce hard data that proves the external counsel are adding value.

Karen Werger, managing partner of the financial advisory practice and legal services sector leader with Deloitte, said in-house lawyers are under pressure. “In certain organizations, they’re still regarded as cost centres. They need to look for ways to add value to become a strategic partner to the business.”

And finally, law firms are changing their organizational structures in ways that could benefit in-house departments in their hunt for talent. In the near future, outside law firms will likely have fewer equity partners at the top, and fewer junior lawyers at the bottom.

A lot of the “commoditized” work that used to be done by junior associates within a law firm will be outsourced to contractors. In-house legal departments, meanwhile, are keeping more work within the company that used to go to the external counsel.

Talking about innovation is one thing. It’s up to lawyers to grab the opportunities that are staring them in the face.