Legal Shifts Spend In-House and Toward Technology

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 accounted for 49.8% of spending, but that was 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 prioritizing — reflecting the evolving role of the legal department as a strategic business partner.