Corporate legal departments will feel the impact of three major trends in 2023, according to Gartner, Inc. The trends range from ongoing disruption, to flat budgets, to information-related regulation.
“At the broadest level, legal resources will remain flat due to modest budget increases in the face of rising personnel, technology and service provider costs, lawyer exhaustion and record-high attrition, and an environment of cost-consciousness with some industries implementing hiring freezes,” said Raashi Rastogi, director, research in the Gartner Legal Risk & Compliance Practice. “Meanwhile, the demand for, scale and complexity of legal work is increasing due to more time spent managing disruption, new information-related regulation, and changing risk appetite.”
Disruption Will Continue to Weigh on Exhausted Legal Teams
There have been a range of disruptions that lawyers have faced in the past year that are set to continue through 2023. Despite expectations that disruptions will be less continuous in 2024 and beyond, in a Gartner survey of 140 lawyers in July 2022, respondents expected to spend 100% more time managing business disruptions going forward than they did pre-pandemic (See Figure 1).
These disruptions include events such as the ongoing Russian invasion of Ukraine; supply-chain shocks that are causing macroeconomic difficulty; along with high inflation and the specter of recession. There is also intense societal pressure that is redefining what is expected from businesses in terms of their social and environmental practices.
Legal must define a “disruption response service” – a process that defines how/whether to support a disruption, and how to allocate resources to it. Legal needs to identify and invest in the activities that drive disruption response, such as keeping on top of regulatory changes, changing risk appetites more frequently, educating business partners on new risk considerations, or coordinating response with business partners when having to deal with abrupt changes such as sanctioned entities.