Study Finds More than Two-Thirds of Legal Department Leaders Seek Advanced Technology Solutions to Alleviate Capacity Demands

Rhea-AI Summary

FTI Consulting (NYSE: FCN) has released findings from The General Counsel Report 2023, focusing on the pressures faced by legal departments. The study reveals that 67% of legal leaders are integrating automation and advanced technologies to enhance productivity while managing tight budgets. Key insights include that 47% are hiring specialists in their legal teams, while 60% rely on external law firms to address capacity constraints. Despite only 20% reporting current use of artificial intelligence, 57% anticipate increasing its adoption. The pandemic's legacy continues to challenge compliance and retain employees in hybrid work environments.

Positive

• 67% of legal leaders integrating automation and advanced technology.
• 47% hiring specialists to boost legal department capabilities.
• 60% relying on external law firms for risk and capacity management.
• 57% expect to increase use of artificial intelligence.

Negative

• Current use of AI in legal departments remains flat at 20%.
• Challenges in employee retention and compliance management due to remote work.

Part Three of The General Counsel Report from FTI Consulting and Relativity Reveal Trends in In-House Counsel Management of People, Providers and Automation

WASHINGTON, March 16, 2023 (GLOBE NEWSWIRE) -- FTI Consulting, Inc. (NYSE: FCN) today announced additional findings from its Technology segment’s annual study of corporate legal departments, in partnership with global legal technology company Relativity. Based on a detailed survey and one-on-one interviews between Ari Kaplan and chief legal officers at large corporations, Part Three of The General Counsel Report 2023: Global Legal Departments Alleviate and Respond to Critical Pressure Points revealed that legal department leaders are grappling with a delicate balancing act of boosting output while keeping budgets conservative, which has led many to accept flexibility as a vital ingredient to their success.

As discussed in Part One of The General Counsel Report 2023, the vast majority of respondents conveyed that their legal departments are experiencing a strain on capacity, resources and budgets, often as a result of the growth that their organizations have driven over the past two years. Today, a requirement to continually adapt is manifesting in the legal department across adoption of advanced technology, employee engagement, compensation frameworks and outsourcing decisions. More than two-thirds (67%) of respondents said their organizations have specifically evaluated the role of automation and advanced technology in enabling a higher standard of professional quality of life, alleviating capacity demands and increasing talent retention.

“Chief legal officers have become incredibly agile in how they navigate a rising tide of risks, demands, resource constraints and team needs,” said Sophie Ross, Global Chief Executive Officer of FTI Technology. “Notably, as they look to increase productivity without burning out their department, general counsel are more open than ever before to automation and advanced technology solutions that can reduce the burden of time intensive tasks. At the same time, most in-house counsel are incorporating a mix of solutions alongside technology, including appointing internal specialists across their department and maintaining strong relationships with trusted outside counsel and other service providers.”

Key findings covered in Part 3 include:

• Nearly half (47%) said they are hiring specialists within the legal department to support specific efforts and needs, while 20% are hiring generalists.
• 60% of respondents also listed reliance on law firms, as well as reliance on other outside providers, as among their top strategies for managing risk and capacity constraints.
• A notable portion of the current workload allocation within legal departments skews toward contracting, with one-third of participants reporting they spend at least 40% of their time in this area, while half spend more than 30% of their time on contract-related work.
• Despite that current legal department adoption of artificial intelligence remains flat — only 20% reported they are currently using AI, a slight decline from previous years — 57% said they expect to increase their use of AI.
• 45% advised that their organizations, and their legal departments specifically, have experienced new challenges associated with remote work, including 30% who said prolonged remote and hybrid work have directly influenced how they address their regulatory compliance and data privacy risks.
  

David Horrigan, Discovery Counsel and Legal Education Director at Relativity added, “The COVID-19 pandemic may have come to an end for many around the globe, but the research contained in Part 3 of The General Counsel Report 2023 indicates workplace changes resulting from the pandemic have had a continuing impact on corporate legal departments. In recent years, The General Counsel Report has provided a barometer of the COVID effect on corporate counsel, and some of these trends continue in this year’s report, including in personnel matters, with chief legal officers noting challenges in retaining employees and meeting compliance obligations with a remote workforce, while, at the same time, finding hiring advantages in the flexibility of a remote and hybrid team.”   

The complete edition of The General Counsel Report 2023, including Part 3, is available here.

Demographics and Methodology
From Aug. 22, 2022 through Sept. 7, 2022, Ari Kaplan personally interviewed 30 leaders serving as the general counsel or chief legal officer of their organizations. Forty percent work in organizations with more than $1 billion in annual revenue and 60% work for companies with more than 1,000 employees.

About FTI Consulting
FTI Consulting, Inc. is a global business advisory firm dedicated to helping organizations manage change, mitigate risk and resolve disputes: financial, legal, operational, political & regulatory, reputational and transactional. With more than 7,600 employees located in 31 countries, FTI Consulting professionals work closely with clients to anticipate, illuminate and overcome complex business challenges and make the most of opportunities. The Company generated $3.0 billion in revenues during fiscal year 2022. In certain jurisdictions, FTI Consulting’s services are provided through distinct legal entities that are separately capitalized and independently managed. For more information, visit www.fticonsulting.com and connect with us on Twitter (@FTIConsulting), Facebook and LinkedIn.

About Relativity
Relativity makes software to help users organize data, discover the truth and act on it. Its SaaS product, RelativityOne, manages large volumes of data and quickly identifies key issues during litigation and internal investigations. Relativity has more than 300,000 users in approximately 40 countries serving thousands of organizations globally primarily in legal, financial services and government sectors, including the U.S. Department of Justice and 198 of the Am Law 200. Please contact Relativity at sales@relativity.com or visit www.relativity.com for more information. 

FTI Consulting, Inc.
555 12^th Street NW
Washington, DC 20004
+1.202.312.9100

Investor Contact:
Mollie Hawkes
+1.617.747.1791
mollie.hawkes@fticonsulting.com

Media Contacts:
Ashley Allman
+1.206.369.5209
ashley.allman@fticonsulting.com

Relativity Public Relations
pr@relativity.com

 

FAQ

What are the key findings of FTI Consulting's General Counsel Report 2023?

Key findings include that 67% of legal departments are integrating automation, 47% are hiring specialists, and 57% expect to use more AI.

How do legal departments manage budget constraints according to the report?

Legal departments are hiring specialists and relying on external law firms to handle risks and capacity constraints.

What percentage of legal departments are currently using artificial intelligence?

Currently, only 20% of legal departments report using artificial intelligence, a slight decline compared to previous years.

What challenges do legal departments face in the remote work environment?

Legal departments are experiencing challenges in employee retention and managing compliance obligations due to remote and hybrid work.