Peter Hall, COO
A cooling global economy may make new legal tech investments harder to justify. So how can GC’s keep digital transformation initiatives on track?
Legal’s traditional tech aversion came to an abrupt halt when the pandemic arrived. COVID forced lawyers to re-consider their resistance to automating certain legal activities — and most teams saw significant benefits as a result.
While digital transformation embeds itself in the profession, another macro crisis is looming. Inflation, recession, and the coming pressure on legal budgets will make the business case for new legal tech investments harder to argue.
However, a study by analysts Gartner found that the proportion of legal and IT budgets spent on technology is set to increase drastically by 2025. Delaying new initiatives will only give competitors breathing room to become more efficient, innovative, cost effective, and data-driven.
Having started down the digital path, GCs have to keep going. The challenge now is to decide which technologies will drive real business outcomes.
Technology and effective legal operations are inseparable
The real value of digital transformation lies in analytics, automating workflows and creating repeatable processes. But to get full return on any legal tech investment you first have to know where your inefficiencies are and to understand the opportunities to create a fit for purpose future legal function. Positioning the legal function so that it is focused on key business challenges requires a fundamental shift in thinking – reallocating work is a temporary fix. GCs need to rethink their sourcing strategy to take low risk volume work away from specialists, streamline workflows, and introduce self-service into the business.
Creating a future target operating model and aligning this with a technology roadmap increases the likelihood of technology successfully supporting legal operations.
If for example, adopting self-service is identified as a better way to serve the business, GCs will need to look at implementing the appropriate tools and designing new workflows to deploy them.
Where the priority is to reduce the cost of low-risk transactional work, they will likely need to look at platforms that facilitate access to external legal services — without impacting quality or service levels.
How do you ensure legal tech investments add value?
01 Get more from what you already have
Improving or extending your capabilities may require additional technology purchases, but before you buy, consider the software and services you already have. Are you using them to their fullest? Do your teams and stakeholders need training? Are there areas where you could simply add a module to an existing application? If you do need to purchase something new, it’s vital to analyse how well it will integrate with current tools. Can you weave it into existing workflow seamlessly, or will it require a new set of procedures?
02 Deployment is more important than implementation
Once the data migration is done, switching a new application on and giving users access is relatively easy in a world dominated by the cloud. To get full business value, the real challenge is considering the impact on processes and workflow. Take for example a new contract lifecycle management solution. Contract processing and approvals undertaken by other functions are often the biggest time waster. If it’s going to deliver the efficiencies it promises, you may need to deploy the CLM system beyond the legal team.
03 Effective change management is a differentiator
For that reason, it’s important to factor in everyone affected by a new tech investment before you make it. All the relevant stakeholders that legal partners with should be consulted to understand what kinds of capabilities they would want, how the solution might affect their workflow, and what insights they would like to have from any associated data analytics. Involving stakeholders in the selection process is critical for change management and can also help avoid functional data siloes. Most importantly, making the effort now will save time and money lost to excessive management time, extended implementation, sub-optimal licensing, and low adoption rates.
04 Work with someone who’s done this before
Once you’ve given serious consideration to the technologies, people, and processes impacted by new legal tech, you’ll be ready to start procurement. But from end to end it’s a time-consuming process with a lot of complexity to navigate.
That’s why we tell clients to think about digital transformation as an ongoing initiative, with each new investment simply the next step in a process tied to the evolution of the business.
At Cognia, we understand how this works. Our multi-disciplinary teams combine technology consulting and legal expertise to help you define your requirements, streamline your workflows, select the right tools, and configure them for the specific needs of your legal operation.