Most Legal Departments Unprepared to Support Digitization, Says Gartner Report
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A large majority of legal departments—81 percent—are not prepared to support their companies as they go through the digitization process, according to a report released Wednesday by research and advisory firm Gartner.
Gartner studied 1,715 digital projects across industries, geographies and types, interviewed or surveyed over 100 general counsel and privacy officers, and surveyed 100 legal stakeholders on information governance.
Abbott Martin, research vice president at Gartner, said in an email to Corporate Counsel that there are many challenges in bringing a legal department up to speed when a company goes through the process of converting all their documents into a computer-readable format for storage and use.
“It might change the internal control points Legal uses to manage risk. But perhaps most fundamental, widespread digitization can change the type of company you support. Where once you had been a retail legal department, now you need a retail and technology legal department. This means new sets of legal work, new acquisition targets, new supply chains, and new legal frameworks. The legal department has to adjust to all of these changes,” Martin said.
Only 19 percent of respondents indicated that they are ready to support their company’s digitization efforts.
Martin said that new laws across the globe, such as the EU's General Data Protection Regulation (GDPR) and the California Consumer Privacy Act (CCPA), have made it more difficult for legal departments to adapt.
“I wouldn’t say the privacy frameworks make it easier. GDPR and CCPA certainly bring more attention to the legal and privacy aspects of digitization and digital business transformation. So that brings legal into strategic business conversations (if they weren’t already there). And codified, universal standards make legal interpretation and internal process management easier. But practical enforcement of GDPR is still unclear and CCPA could portend more (not less) regulatory fragmentation in the privacy space," Martin said.
General counsel preparing to make their organizations digital-ready should implement four key changes to their legal department's processes, the Gartner report states. They include clarifying stakeholder roles; building rapid-response capabilities by addressing obstacles such as lack of time; developing digital skills and shifting away from traditional legal duties; and designing an information governance framework "that trades an inflexible rules-centric approach for a decision-centric model, that is better able to keep pace with digital projects," according to the report's news release.
“Information governance is the other critical element of digital readiness. Many companies are investing in individual capabilities to manage risks in a data-rich environment, such as building a stronger privacy program or increasing spending on cyber security,” the report states.
Despite very public data breaches such as the recent Equifax and Marriott Hotels breaches, however, the report states that only 37 percent of legal and compliance leaders say they have an organized information governance structure in place.
