Legal budget challenges

2023 Survey Reveals Corporate Legal Budget Challenges

IPRO, an industry-leading eDiscovery and data governance technology solutions company, announced the results of a survey conducted jointly with the Association of Certified E-Discovery Specialists (ACEDS) that reveals legal professionals face a wide variety of challenges related to modernizing operations with new legal technology while also navigating budgetary constraints.

Corporate legal departments have already been through several turbulent years. The volume of corporate data, driven by the emergence and widespread adoption of new tools like Slack and Microsoft Teams as employees transitioned to working from home, has exploded. Meanwhile, service providers have implemented artificial intelligence to improve legal technology and expand capabilities to keep up with the increased volume of data.

"As the legal industry continues to evolve, corporate legal professionals have an unprecedented opportunity to embrace transformational change and leverage technological developments to their advantage," IPRO CEO Dean Brown said. "But at the same time, as our survey reveals, legal professionals are under significant pressure to justify any additional spending on new technology."

IPRO and ACEDS jointly surveyed corporate legal professionals to explore the perceptions and key challenges they are likely to face this year, the expectations and priorities they set for 2023 and how they see technology supporting their team in achieving the set goals.

"This survey is as timely as it is relevant," said ACEDS president Mike Quartararo. "With eDiscovery and legal technology professionals everywhere wondering what the market economics of 2023 and beyond will look like, this survey provides a useful snapshot of what might be expected as we move forward," he added. 

Nearly half of the respondents (47%) work at companies with an annual revenue of more than $500 million and 58% work for companies with a legal team of 10 or more people.

The key findings of the survey, conducted in December 2022, are as follows:

  • More than half (53%) of surveyed corporate legal professionals named budget as the main factor that will impose the biggest challenges for their departments in 2023.
  • 74% of respondents said increasing their use of technology is their top priority this year.
  • Nearly 50% of respondents say meeting deadlines with increasingly complex data is becoming more difficult.
  • Budget issues (33%) and the complexity of technology (29%) are among the main reasons why legal teams choose not to adopt AI-powered eDiscovery solutions.
  • 40% of surveyed in-house legal practitioners said their organizations in-source most of their eDiscovery to limit outside counsel expenses.
  • 41% are considering reducing the number of law firms they work with in 2023 and an additional 25% of respondents surveyed plan to reduce the amount of money spent on outside counsel in 2023.
  • 32% of survey respondents said "leveraging technology to facilitate targeted collections" is a primary step to limiting and/or controlling the over-collection of ESI.
  • Approximately 36% of survey respondents have adopted AI-powered eDiscovery technology as a way to reduce costs and obtain relevant information faster.
  • 35% said internal investigations triggered by an external factor is the most common practice area selected for the application of AI-driven eDiscovery technology.
  • About one-third of the respondents who adopted eDiscovery tech say they are neither happy nor unhappy about how their teams use it in their day-to-day tasks.

As organizations increasingly struggle to manage and control all their data, adopting a systematic and consistent approach to information governance will become more important than ever in 2023. In-place search solutions in particular can assist legal teams in creating a better overview of their data and its sources in an instance.

"Today's chief legal officers are trying to balance a number of conflicting priorities. They know they need to modernize the technology their legal departments use because the volume of data generated by employees continues to grow at a rapid pace," IPRO Chief Commercial Officer Ethan Treese said. "At the same time, we are in the middle of an uncertain economic period that is forcing companies to cut back on their budgets, which makes it even harder to justify investments in technology.  At IPRO, we believe that smart companies will recognize that investing in the right technology now will save money in the future."

Follow the link to access the 2023 State of Corporate Legal Industry Report.

Also read top viewed Ai Legal article: The Role of AI in Legal Research.

Back to blog