Legal operations teams face significant challenges aligning with in-house legal department leadership and managing the rapid adoption of AI technologies, even as they gain influence and budget within the department. Specifically, unhealthy power dynamics are hampering collaboration, productivity, and job satisfaction among many legal ops professionals.

This is according to Bridging the Divide: Optimizing Legal Department Performance through Legal Ops, AI, and In-House Collaboration, a new national study of 200 legal operations professionals—100 from companies with annual revenue of $250M to $1B, and 100 from companies with annual revenue of more than $1B—conducted by Wakefield Research and commissioned by Axiom.

This report explores insights into some of the crucial aspects of corporate legal ops teams and the profession itself, including budgeting and resourcing strategies, the working relationship between in-house and legal teams, legal technology adoption, the people and factors that influence technology implementation, AI policies and usage, career satisfaction and job hunting, and more.

These insights highlight the crucial role legal ops plays in driving innovation and efficiency across the legal department, while exposing a key challenge—namely, gaps in business alignment and collaboration among many legal ops and in-house legal teams that can impede the success of the legal department and the business it serves.

The good news? The insights offered in Wakefield's report highlight immense opportunities for improving team unity, which can advance a legal department's efficiency and effectiveness, accelerate digital transformation, and enhance job satisfaction and retention. In a nutshell, the research found:

1. A Culture Gap: Nearly all legal operations professionals surveyed reported experiencing tension or conflicts with their legal teams due to power dynamics or decision-making authority, with 41% stating this tension occurs often. Not surprisingly, 99% of respondents believed bridging this gap would improve overall organizational performance.
   
   
2. An AI Gap: While the study found AI adoption to be surging, few organizations have clear policies in place to govern the implementation of AI technologies. Nearly all legal teams reported using AI tools, yet 6 out of 10 (64%) businesses surveyed lack AI policies. Only 3% of respondents said the AI tools used by their legal teams have been explicitly approved, creating a "side of the desk use" problem that poses significant compliance and IP risks.
   
   
3. A Career Satisfaction Gap: Career mobility, the culture gap with in-house leadership, and high stress levels are contributing to current and potential retention issues. Almost a third (32%) of legal ops pros reported extremely or very high stress and burnout levels, 64% said they're open to new roles or actively job searching, and nearly half (49%) indicated their team struggles with retention. This data suggests a potential wave of legal ops attrition could be in the offing when economic conditions improve.

On the upside: While 96% of legal departments reported budget cuts and hiring freezes over the past year, legal ops budgets are on the rise. Most legal operations professionals (83%) reported a budget increase last year, with an average increase of 5%. About the same number of legal ops pros (81%) anticipate another increase in the next budgeting cycle, with the average increase projected at 6%. This might reflect increased recognition of legal ops as a vital in-house partner, especially in light of the growing role of AI and digital transformation in law.

"In-house and legal ops teams need tight alignment to meet the challenges of an increasingly complex regulatory, legal, and technology landscape," said Ashlin Quirk, Senior Vice President and General Counsel of Axiom. "The regulatory environment is changing fast across practice areas, technology is disrupting the business of law, and cost and talent pressures keep rising. To optimize in-house operations, legal ops leaders need to be equal partners with their in-house lawyer colleagues in the decision-making processes that drive innovation, optimize budgets, and flex capacity."

The full report, Bridging the Divide: Optimizing Legal Department Performance through Legal Ops, AI, and In-House Collaboration, is available at https://www.axiomlaw.com/resources/articles/2024-legal-operations-survey-report.

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