Two-thirds of legal departments that have significantly invested in transformation initiatives to improve their litigation and investigation operations have focused on data management and information governance initiatives, according to a recent report.
The high priority placed on data management projects in the last two years was seen across legal departments of different sizes, the report published by the Association of Corporate Counsel (ACC) and the legal technology company DISCO found.
Kristin Zmrhal, DISCO’s VP for product strategy, noted that these findings come as general counsel and chief legal officers are increasingly leading data management and security initiatives at their organizations.
Legal chiefs are also grappling with an evolving data privacy landscape that includes a growing number of state-level laws in the U.S. and the General Data Protection Regulation (GDPR) in the European Union.
Additionally, Zmrhal said legal departments are particularly focused on data management practices in response to the increase in remote work and use of collaborative applications for communications.
Keeping track of electronic data created by workers is necessary for companies to effectively comply with legal hold requests.
“Because many of the technologies that we're using today — Google, Microsoft, Slack — have in place preservation mechanisms, companies are looking to leverage the out-of-the-box technology that comes along with them to reduce their overall risk,” Zmrhal told Legal Dive.
Businesses are also turning to third-party providers for assistance with managing legal holds, which is one reason Zmrhal said DISCO acquired Hold360 and Request360 earlier this year.
Boosting efficiency
The DISCO and ACC report features results from 278 law department leaders and legal operations professionals surveyed in late May through mid-June about how they have engaged in transformation within their departments. ACC members in North America and Europe were targeted.
Efficiency was the top benefit legal departments that pursued transformation initiatives achieved, according to the ACC and DISCO report.
Zmrhal said this aligns with in-house teams’ increased focus on data management, as many are seeking to generate detailed information about workflows and processes that will help them achieve greater speed.
“Data is the driving factor behind how you can even identify where you're going to apply resources for transformation initiatives,” she said.
For example, Zmrhal said contract lifecycle management (CLM) is an area where a large number of legal departments want to become more efficient.
Before launching initiatives in the CLM space, including those aided by new technology, most in-house teams try to gather data about the time needed to process and execute contracts.
“You're not going to be able to measure the effectiveness of transformation if you don't actually have the data to start with,” said Zmrhal, who previously worked on a Google legal department team for responsible process improvement and data management.
Automation projects
Another way in which in-house teams are working to boost efficiency is automation, which 41% of legal departments that took substantial transformational steps invested in during the last two years.
Zmrhal said automation is particularly useful for legal teams that need to more with less amid uncertain economic times.
One area in which DISCO has seen strong demand from legal departments for automation is with responses to legal hold notifications, tracking and data preservation.
The company can help legal teams automate the process for ensuring custodians are notified of their hold obligations and acknowledge receipt of the notices, among other legal hold tasks.
“If you scale this over tens or hundreds of legal holds every year, you've now saved hundreds, if not thousands of hours,” Zmrhal said.
Overall, 62% of legal departments plan to invest in automation in the next two years, including 75% of large organizations.
The only area in which more departments plan to invest in the next two years is data management and information governance at 70%.
Room for improvement
The ACC/DISCO report also revealed that seven in ten legal departments only experienced a limited investment in transformational initiatives in the last two years.
Roughly 70% said that was because they are satisfied about how their litigation-related work is currently handled.
One-third of respondents said budget constraints were an issue, while around 25% blamed a lack of a long-term strategy and not enough support from executive leaders.
“Six in ten departments that had undertaken a minimal amount of investment in transformation think of further transformation efforts as a priority, and the numbers are significantly larger for those who have already taken steps to transformational change,” the report said.
