Gartner: Legal departments to replace 20% of lawyers

In a new report titled Predicts 2021: Corporate Legal and Compliance Technology Gartner outlines the top predictions for corporate legal and compliance technology through 2025.

Some of the most interesting takeaways from the report are that legal departments are expected to increase their technology budgets threefold through 2025, in order to support workflows and meet productivity demands, and that they will replace 20% of generalist lawyers with non-lawyer staff and technology, to allow the department to do more with scarce resources.

The COVID-19 pandemic has altered the trajectory of technology adoption in legal departments. And, according to the report, application leaders responsible for legal and compliance technology must build a strategy that addresses pain points on the path to better legal and business outcomes.

In the Business Chief article Gartner: Legal tech spending to increase threefold by 2025, director and advisory in the Gartner Legal and Compliance practice Zach Hutto explains how there is a long overdue need for legal departments to modernise, digitise and automate legal work. A combination of factors, including those brought on by the pandemic, have increased the urgency for legal departments to embrace technology, with general counsel facing unprecedented pressure both in terms of managing legal workload and driving efficiency in their departments. In the Gartner report it is therefore predicted that spending on legal technology will increase to around 12% of in-house budgets by 2025, a threefold increase from 2020 levels. But in addition to increased spending, Gartner’s report also predicts that by 2024, legal departments will replace 20% of generalist lawyers with non-lawyer staff, allowing legal departments to do more with scarce resources. From 2018-2020, the percentage of legal departments with a legal operations manager, responsible for tech staff, grew from 34% of legal departments to 58%.

“Any legal leaders won’t have any scope to further increase headcount or outside counsel spending right now, so they are quite likely to look to technology to maximise the productivity of their existing investments in personnel,” according to Zach Hutto. “The higher-volume, lower-complexity work that is typically carried out by generalist lawyers is where non-lawyer staff will drive efficiency gains for the department, by digitizing key workflows and expanding the use of automation.”

According to Gartner, developing a comprehensive, multi-year technology strategy that can adapt to changes in the corporate environment and advancements in the tech market will be critical to success.

However, as pointed out in another interesting article in The Wall Street Journal recently, it’s not always easy with technology investments to spend the money on the right projects, see The many ways companies waste money with technology spending. Even though this article talks about digital acceleration in businesses in general, the conclusions apply to technology spending within legal departments as well. Any organization or department needs to ensure that it understand what its own concrete business goals are and understand how the technology will support them before moving forward with any software implementation.