Steven O’Donnell reflects on the Altman Weil CLO Survey and the changing landscape of legal operations
As Mitratech’s Director of Product Marketing, I look forward to market research that provides consistent insight into the strategic priorities and trends that are impacting legal departments, especially as it relates to technology. Now in its 18th year, the annual Chief Legal Officer Survey by Altman Weil is one of the best sources for data for corporate legal research not only for the level of detail, but for the consistency of surveys questions and approach year after year.
Several trends surfacing in the results validate Mitratech’s own observations in the market.
First, legal departments are growing in both size and the complexity of their operations and interactions across the business. Attorney hiring continues to rise, with 38% of legal departments planning to add attorneys in the next 12 months, but more interesting is the growth in the role of legal operations managers, where there has been a 12% increase in the legal departments that have one in place compared to the prior year.
We have observed record growth in legal operations industry organizations such as CLOC, and saw the increased focus placed on legal operations at ACC’s Annual meeting last summer. The primary reason for staff additions is to cover increased workload, and thus improving internal legal department efficiency continued to be a core driver for the Chief Legal Officers surveyed.
Of the ten options CLOs were presented to improve law department efficiency, the most common response (58% of departments) is a greater use of technology tools. This finding validates our continued efforts to enhance our matter management capabilities and user experience.
The second strong trend in the research is the continued CLO focus on cost control and price reductions from outside counsel. Part of this is being driven by the overall growth business growth we are enjoying in the current economy, but the majority of legal departments are increasing their internal budgets in 2017. For the first time in 10 years, CLOs are predicting increases in outside counsel spending in 2018, with 40% increasing budgets. Some of the most frequent techniques used in outside counsel management include requiring outside counsel budgets, providing billing guidelines, and using AFAs (alternative fee arrangements).
What was very revealing for me however, was how CLOs do not see their top law firms as being serious about changing their legal service delivery model with 70% scoring firms poorly. Furthermore, when asked how many of their top 10 firms provided an analysis of spending data that was useful to the legal department in the past 12 months, 68.2% said none of our top 10 firms.
Mitratech is now providing the means for firms to impact that poor result by offering Viewabill as part of our standard e-Billing offering to firms that connect with our legal department clients. Viewabill allows firms to establish a new status quo, enabling delivery of legal services that represents value to both the firm and the legal department. By helping to address this market problem, we can help CLOs spend more time supporting business objectives and advising company leaders, which research proves to be a major source of value in the legal department.