Anirban Ghoshal
Senior Writer

70% of legal departments don’t invest in digital transformation: Report

Sep 16, 20224 mins
Digital TransformationLegal

Lack of budget and resistance to change are top barriers to digital transformation in most legal departments across the US, according to new research.

A gavel rests on open law book. [law / regulation / compliance / legal liability]
Credit: Andrey Popov / Getty Images

More than 70% of US legal departments across enterprises spanning various industry sectors have not made any investment towards digital transformation in the last two years, according to a joint report from The Association of Corporate Counsel (ACC) and legal-technology company Disco.

The report captures insights from a survey of 278 law department leaders and legal operations professionals and shows that larger companies were more open to transformation initiatives than smaller ones.

Survey respondents from about half of companies with revenue of less than $1 billion said that they have not invested in, or have made only minimal investment in, digital transformation, according to the report. Respondents from only 7% of companies of this size reported making significant investments in digital transformation.

Thirty-four percent of respondents from companies with revenue of $1 billion-$10 billion said they had made no or minimal investment in digital transformation, with 10% of respondents in this category reporting significant investment in transformation.

Otherwise, survey respondents from 9% of companies with revenue of more than $10 billion said they had made minimal or no investments in digital transformation, and 17% of those polled in this category reported making significant investments in digital transformation.

Resistance to change, lack of budget top barriers to transformation

Resistance to change and lack of budget were the top barriers to digital transformation in these legal departments. More than 70% of respondents who said that their departments had not made any investment in transformation initiatives explained that they were satisfied with how litigation-related work gets done presently. Of these respondents, more than 35% cited lack of budget as the second-biggest reason for lack of focus on on digital transformation, followed by issues such as lack of long-term strategy, lack of executive support for transformation, and lack of transformation expertise.   

More than 76% of departments surveyed said that getting the right mix of talent along with the right technology is key to serve the growing demands of the business. About 4% of these respondents voiced skepticism about technology being an asset to improving litigation and internal investigation outcomes.

Data and project management top transformation initiatives

Data and project management were ranked as top transformation initiatives by 30% of respondents who had said that they have made some investment in digital transformation over the last two years. More than 65% of these respondents said that data management and information governance was their top priority when it came to transforming digitally, followed by 47% of respondents saying legal project management was another important focus area.

Other focus areas include performance analytics and reporting, automation, and e-discovery—use of electronic means to gather and exchange information about evidence.

Data and project management top transformation initiatives

The legal departments that made investments into digital transformation initiatives said they reaped benefits such as increased efficiency, cost savings, increased productivity, minimization of risk and increased chances of better litigation outcome.

At least 48% of those respondents who said that they have made investments in transformation initiatives ranked increased efficiency as the most immediate benefit of their expenditure.

Around 35% of these respondents cited cost savings, followed by 28% reporting positive outcomes in data management and security as benefits of transformation initiatives, according to the survey.

Almost 13% of such respondents said that they saw an increased chance of better litigation outcome post digital transformation projects being undertaken.