EY: legal departments face rising tide of challenges in their transformation efforts

As they look to transform in the wake of complex digital and regulatory change, legal departments across the globe are facing a mounting list of operational challenges.

It emerges from the 2021 EY Law Survey, conducted with the Harvard Law School Center on the Legal Profession that interviewed more than 2,000 business leaders were during the first two months of 2021 – including more than 1,000 law department leaders from businesses representing 17 industries across 22 countries.

The survey shows that a large proportion of General Counsel lack confidence in their department’s ability to identify, measure and handle the complex risks facing their organizations. Almost two-thirds (65%) say they do not have the data and technology to respond to a data breach.

Furthermore, the economic challenges of the past year have added to mounting pressures on budgets. A significant majority (88%) of General Counsel are planning to reduce the overall cost of their legal functions over the next three years, driven mainly by pressure from the CEO and board.

More than half (59%) of General Counsel believe that greater use of technology is a way to reduce costs. However only 30% of in-house counsel say they have the technology required to do their job; more than eight in ten (83%) say they lack the skills needed to automate processes.

The wide-ranging challenges to transformation are compounded by rising volumes of work. General Counsel expect legal department workloads to increase by 25% over the next three years, but they anticipate a rise in headcount of just 3% over the same period.

A further critical challenge cited revolves around how law departments can act as enablers to the business. Little more than half (52%) of General Counsel believe their day-to-day work is aligned with the broader business strategy.