Gartner: Legal tech spending to increase threefold by 2025
Legal departments are expected to increase their technology budgets threefold through 2025, in order to support workflows and meet productivity demands, states Gartner in a new report, titled Predicts 2021: Corporate Legal and Compliance Technology.
While spending on legal technology has been on the up in the last five years, increasing 1.5 times from 2.6% of in-house budgets in 2017 to 3.9% in 2020, Gartner predicts it will increase to around 12% of in-house budgets by 2025, a threefold increase from 2020 levels.
A combination of factors, including those brought on by the pandemic, have increased the urgency for legal departments to embrace technology, with general counsel facing unprecedented pressure both in terms of managing legal workload and driving efficiency in their departments.
While the pandemic has created more work for in-house legal departments at a time when headcounts are likely to remain flat, there is also a long overdue need for legal departments to “modernise, digitise and automate legal work”, says Zack Hutto, director, advisory in the Gartner Legal and Compliance practice.
“Even discounting the new pressures brought about by the pandemic, the trend of increased spending on inside counsel is a tailwind for in-house legal technology spending,” says Hutto. “Many legal leaders won’t have any scope to further increase headcount or outside counsel spending right now, so they are quite likely to look to technology to maximise the productivity of their existing investments in personnel.”
According to Gartner, developing a comprehensive, multi-year technology strategy that can adapt to changes in the corporate environment and advancements in the tech market will be critical to success.
Legal departments to replace 20% of generalist lawyers
In addition to increased spending, Gartner’s report predicts that by 2024, legal departments will replace 20% of generalist lawyers with non-lawyer staff, allowing legal departments to do more with scarce resources. From 2018-2020, the percentage of legal departments with a legal operations manager, responsible for tech staff, grew from 34% of legal departments to 58%.
Simultaneously, some departments at large firms are increasing the percentage of in-house specialist full-time employees, replacing laws firm expertise, firstly to in-source the areas of highest outside counsel spending and secondly, in anticipation of legal and regulatory changes.
“Specialist legal work is typically lower in volume but higher in complexity, it is therefore not the best starting point for standardization and automation.” states Hutto. “The higher-volume, lower-complexity work that is typically carried out by generalist lawyers is where non-lawyer staff will drive efficiency gains for the department, by digitizing key workflows and expanding the use of automation.”
How changing your company's software code can prevent bias
Two-third of tech professionals believe organizations aren’t doing enough to address racial inequality. After all, many companies will just hire a DEI consultant, have a few training sessions and call it a day.
Wanting to take a unique yet impactful approach to DEI, Deltek, the leading global provider of software and solutions for project-based businesses, took a look at and removed all exclusive terminology in their software code. By removing terms such as ‘master’ and ‘blacklist’ from company coding, Deltek is working to ensure that diversity and inclusion are woven into every aspect of their organization.
Business Chief North America talks to Lisa Roberts, Senior Director of HR and Leader of Diversity & Inclusion at Deltek to find out more.
Why should businesses today care about removing company bias within their software code?
We know that words can have a profound impact on people and leave a lasting impression. Many of the words that have been used in a technology environment were created many years ago, and today those words can be harmful to our customers and employees. Businesses should use words that will leave a positive impact and help create a more inclusive culture in their organization
What impact can exclusive terms have on employees?
Exclusive terms can have a significant impact on employees. It starts with the words we use in our job postings to describe the responsibilities in the position and of course, we also see this in our software code and other areas of the business. Exclusive terminology can be hurtful, and even make employees feel unwelcome. That can impact a person’s desire to join the team, stay at a company, or ultimately decide to leave. All of these critical actions impact the bottom line to the organization.
Please explain how Deltek has removed bias terminology from its software code
Deltek’s engineering team has removed biased terminology from our products, as well as from our documentation. The terms we focused on first that were easy to identify include blacklist, whitelist, and master/slave relationships in data architecture. We have also made some progress in removing gendered language, such as changing he and she to they in some documentation, as well as heteronormative language. We see this most commonly in pick lists that ask to identify someone as your husband or wife. The work is not done, but we are proud of how far we’ve come with this exercise!
What steps is Deltek taking to ensure biased terminology doesn’t end up in its code in the future?
What we are doing at Deltek, and what other organizations can do, is to put accountability on employees to recognize when this is happening – if you see something, say something! We also listen to feedback our customers give us and have heard their feedback on this topic. Those are both very reactive things of course, but we are also proactive. We have created guidance that identifies words that are more inclusive and also just good practice for communicating in a way that includes and respects others.
What advice would you give to other HR leaders who are looking to enhance DEI efforts within company technology?
My simple advice is to start with what makes sense to your organization and culture. Doing nothing is worse than doing something. And one of the best places to start is by acknowledging this is not just an HR initiative. Every employee owns the success of D&I efforts, and employees want to help the organization be better. For example, removing bias terminology was an action initiated by our Engineering and Product Strategy teams at Deltek, not HR. You can solicit the voices of employees by asking for feedback in engagement surveys, focus groups, and town halls. We hear great recommendations from employees and take those opportunities to improve.