Survey highlights rise in legal tech adoption and spending trends within legal departments

Privacy remains the top function overseen by the Chief Legal Officer

Survey highlights rise in legal tech adoption and spending trends within legal departments

The Association of Corporate Counsel (ACC) and Major, Lindsey & Africa (MLA) have released their annual legal benchmarking survey, providing insights into the composition, workload allocation, and technology spending within legal departments.

This fifth edition of the report highlighted the increasing adoption of legal technology, particularly AI-powered tools, and the distribution of legal spend.

The survey, which gathered responses from 421 legal departments across 24 industries and 32 countries, revealed key trends in legal department management. Legal technology, though a small portion of overall legal spending, is gaining traction, especially among smaller companies that allocate a higher proportion of their legal budgets to tech solutions. Core legal functions such as privacy (57 percent), compliance (56 percent), and ethics (52 percent) remain the top responsibilities within legal departments, similar to last year. The executive summary provided detailed data on headcount and structure, cost management, work allocation, use of law firms and alternative legal service providers (ALSPs), and diversity metrics.

“The ACC/MLA Law Department Management Benchmarking Report continues to adapt to capture critical and timely data law departments need to improve efficiencies. In today’s ever-evolving business and legal environment, law departments are continuously being asked to do more with less,” said Veta T. Richardson, president and CEO of ACC.

“This report provides CLOs and general counsel the comprehensive and nuanced insights they need to make informed decisions regarding staff specialization, work allocation, internal vs. external spend, legal technology spending and adoption, and so much more,” Richardson added.

Lee Udelsman, managing partner in MLA’s In-House Counsel Recruiting group, noted the evolving role of in-house legal departments since the pandemic, stating, “Starting in the pandemic years, in-house legal departments saw their roles expand as they were called upon to deal with a range of unprecedented issues. Now, we continue to see the responsibilities of an in-house legal professional further evolve as they grapple with new challenges around the advent of burgeoning technologies like AI.”

The survey highlighted that intellectual property and litigation lawyers make up 14 percent and 7 percent of legal staff, respectively. Outside counsel spending constitutes 87 percent of the total external legal budget, with litigation being the most costly category. About 53 percent of legal tech spending is within the legal department budget, with larger companies favouring shared services models. The adoption of specialized legal tech tools, such as compliance office tools (37 percent), matter management systems (36 percent), and AI-powered solutions (34 percent), is on the rise.

Privacy remains the top function overseen by the CLO, with compliance and ethics also being significant responsibilities. The survey reports an increase in total legal spend from US$ 3.1 million in 2023 to US$ 3.8 million in 2024, with larger companies (revenue between US$ 5 billion to US$ 10 billion) spending nearly US$ 32 million on legal services.

There was a slight increase in tracking diversity metrics, with 32 percent of departments reporting this practice in 2024, up from 28 percent in 2023. However, progress in holding outside counsel accountable for diversity remains limited due to the lack of formal metrics and enforcement.

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