Before COVID-19 hit, corporate law departments across Europe had indicated they were laser-focused on improving the efficiency and effectiveness of their operations and demonstrating their value to their organisation.
In interviews of European legal department leaders for the Thomson Reuters Acritas’ Sharplegal Global Elite survey in 2019, over half of respondents (52 percent) named efficiency as a strategic priority. Once the pandemic struck, safeguarding was increasingly mentioned as a priority for legal departments as they sought to mitigate the risks resulting from the economic disruption.
Shedding more light on this, the ‘2020 State of European Corporate Legal Departments report‘, newly published by Acritas and Thomson Reuters, shows how critical these twin objectives of efficiency and effectiveness have become for corporate law departments across Europe.
The report shows that cost control is a principal driver of efficiency, and only 29 percent of European respondents said their budgets will increase in 2020, and 25 percent said they expect their budgets to decrease. Interestingly, this trend varies significantly from country to country and when it comes to cross-border work, fewer law departments are looking to cut their budgets. In this one area, in fact, European organisations are actually outspending their global counterparts.
Yet, the survey also shows that efficiency is not just about cost control. Innovation and technology are crucial components of the march toward efficiency too. Indeed, legal technology plays an increasingly important role for corporate law teams, and European companies are spending on average five percent of their internal budget on technology, in line with their global peers.
Further, many European law departments are seeking to leverage their technology to better automate and commoditise their work, and thus shift their focus toward enhancing the department’s effectiveness as well.
For European legal department leaders, effectiveness has come to mean supporting the strategic goals of their company and eliminating barriers to progress. In practice, this means being a quick, agile, practically minded business partner that’s willing to collaborating more closely with other departments and take a multidisciplinary approach to providing professional services to their board colleagues.
So, what can corporate law departments in Europe learn from each other and from their global peers about improving efficiency and effectiveness? The report details three ideas that law departments can use to move the ball forward:
- invest in technology;
- collaborate with other functions across the business; and,
- review any alternative legal service providers (ALSPs) that the department utilises.
As corporate budgets remain under pressure from the pandemic, understanding the role that ALSPs play in law departments’ value proposition is likely to remain critically important.
Download your copy of the ‘2020 State of European Corporate Legal Departments’ report, here.