Research Reveals Insights into the Impact of Legal Tech on Australian In-House Teams

Digitally mature teams have the highest productivity and the lowest headcount, while digitally immature teams have the lowest productivity, largest teams, and most FTEs. The surprising news: the most digitally mature are most at risk for talent attrition.

SYDNEY and NEW YORK, Nov. 12, 2024 /PRNewswire/ — Australia’s corporate legal teams are investing millions in legal tech, with the expectation that it will improve productivity, cut costs, and make work easier for their in-house legal teams. New research finds those expectations are valid and legal tech investments are paying off, but with unexpected human costs.

Digital transformation is delivering high productivity and efficiency gains to Australian corporate legal departments, but also leading to higher stress and flight risk among senior leaders and teams. Conversely, legal teams that aren’t on the digital cutting edge report the lowest productivity—but they also have high job satisfaction and the lowest flight risk (just 5% of employees in these firms are actively looking).

And legal teams of all maturity levels are increasing budgets to buy more legal tech—and not just AI—although AI is finding its way into every category of legal technology. In-house legal teams are investing in lawyer power as well as tech power, for a variety of reasons, but all related to their team size and tech savvy.

Those are just a few of many useful insights uncovered by a new Australian national study, The Impact of Digital Maturity on Australian In-House Legal Teams, designed and fielded by InsightDynamo and commissioned by Axiom.

"The data show that the money legal leaders are investing in legal tech is paying off—both in ways they wanted and ways they didn’t anticipate," said Jacob Flax, Managing Director and Country Head of Axiom Australia. "They’re getting the automation and high output on lower-risk work they wanted, so their teams can focus more on the strategic, higher-risk work that requires human reasoning, creativity, and talent. The unintended consequence: Their small teams still feel overworked, are more stressed out, and most are actively looking for their next job. To counter this, respondents at all maturity levels are complementing legal tech investments with investments in FTEs, outside counsel, and flexible legal talent providers like Axiom."

The researchers surveyed the use of 16 popular legal technologies across 16 Australian industries, gathering data that represents a cross-section of the Australian in-house legal sector. Researchers looked at the intersection of legal tech, productivity, and efficiency to determine what impact, if any, legal tech was having on Australian legal teams. The data was then used to analyse the digitally mature, digital centre, and digitally immature among Australia’s in-house legal industry.

Metrics reported include productivity, resourcing, stress, flight risk, alignment to the CTO/CIO and other C-suite members, budgets, talent and hiring, revenue, industry ranking, and tech profiles. The results were at times as unexpected as they were insightful. The study shows that in-house teams fall into one of three maturity levels:

1. Australia’s digitally mature legal teams (17% of sample) have embraced and actively use all 16 legal technologies, typically operate with smaller, highly efficient teams, and are most often led by Chief Legal Officers. They’re still investing in legal tech and actively engaging law firms and ALSPs to augment in-house skills and capacity.
2. Australia’s teams at the digital centre are the norm: Most Australian legal teams are squarely in the digital centre, with 56% of respondents falling into this category. They have large, highly productive teams that don’t take full advantage of the substantial amount of legal tech at their disposal. The continue to invest in legal tech, while also relying on law firms and ALSPs to compensate for talent gaps and capacity constraints.
3. Australia’s digitally immature legal teams (28% of sample) lag in technology adoption, productivity, have high job satisfaction and the lowest stress, are usually led by General Counsel or their deputies, and have large legal teams. Even though they’re digitally immature, they seem to recognize their position and are increasing investments in legal tech, while also leaning on law firms and ALSPs to support their in-house teams.

"While digital transformation drives efficiency, it can also drive in-house lawyers to the exits," Flax said. "Transforming legal departments requires more than deploying new technologies. It’s about finding the right balance—using technology to improve productivity, while using legal service providers like Axiom to improve capacity and provide specialized skillsets that improve team success. Putting together the right combination of technology and talent has become critical to building a high-performing in-house team that will thrive over the long haul."

For more insights, download a complete copy of the The Impact of Digital Maturity on Australian In-House Legal Teams," suitable for reading on a smartphone, tablet, or desktop computer. It is available at no cost at https://www.axiomlaw.com/en-au/resources/articles/australian-in-house-legal-digital-maturity-report.

For more information or to talk to an Axiom representative, visit https://www.axiomlaw.com. For more information about Axiom, please visit our website, hear from our experts on the Inside Axiom blog, network with us on LinkedIn, and subscribe to our YouTube channel.

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