Heading into 2019, corporate legal departments expect to spend less on outside counsel but more on legal IT systems and software.
For the first time, legal departments spent less on outside counsel than on their in-house teams in 2018, according to the Gartner 2018 State of the Legal Function Survey.
Outside counsel spend still accounts for 49,8% of spending, but that’s down from 55,2% two years ago, and more than 70% of legal departments expect that spending to remain relatively flat or decrease over the next three years — even as budgets increase.
The biggest increase in spend is on legal IT systems and software. More than 40% of survey respondents expect spending on legal tech to increase by 10% or more over the next three years.
Legal leaders are also starting to invest in digital skills and capabilities: 27% have a technology/innovation counsel — with the role assumed by someone within the legal function or by a specialist outside of legal. And 19% now have a data analytics expert.
Business priority is the single biggest factor in prioritising — reflecting the evolving role of the legal department as a strategic business partner.