Over the past ten years, advancements in legal technology have changed the face of the legal sector. The invention of ‘the cloud’ and ‘software as a service’ (SaaS) has increased the ability for small teams to access technology. New technology is also being developed specifically for the needs of in-house legal teams. With this increase in technology, in-house teams can realign activities to ones that advance core business objectives and add demonstrable value. This means that the business can reach legal outcomes faster. In this two-part series, we will explore how to approach technology in your in-house legal team and better understand where it can help create value for your business.

What Problems Need Solving by Legal Technology?

When beginning to consider what technology to implement within your in-house team, do not look at the technology yet. Instead, ask yourself which problems need solving.

Answering this question should take the form of a diagnosis exercise which identifies the different pain points within your teams. As every legal process is part of a larger commercial one, both the in-house legal team and relevant commercial teams should be involved in this process.

The following questions are a good starting point for the exercise, and should be answered candidly by both teams:

Topic Questions
Time Management What are your most time-consuming tasks? Why?
Is this due to the volume, the complexity or the number of stakeholders involved?
How easy is it to track how much time your team spends on a task?
Collaboration How difficult is it in your company to work with a high number of stakeholders?
What types of tasks take up your time when working with different teams or different individuals within the business?
How do you ensure everyone plays their role in the process?
What is the sign-off process?
Allocation of Resources Where do you feel like your time is being spent inappropriately?  
Where do you feel like the time you are spending on a task is not proportionate to the value this task is bringing to the business?
Knowledge Management How often do you require specific legal expertise?
How difficult is it to access the relevant data from the business?
Do you feel like you start from scratch each time or are there any records of decisions, documents and processes?
Workflow Management At what point in the process do you most commonly face problems (e.g. preparing documents, getting sign-off)?
Who takes accountability for delivering legal services?
Are each team aware and aligned on the goals that they’re trying to achieve?

 

The answer to these questions will help identify which problems you need to solve. This will help you decide whether or not technology can assist in solving your problems.

Will Legal Technology Improve My Team’s Return on Investment?

Technology requires an investment. The problem is that it is difficult to quantify the return on investment (ROI) of legal technology because it is hard to quantify the gain generated by a lawyer. The quality of the drafting of a contract or the complexity of legal advice does not easily translate into a dollar amount.

The first step in investing in technology is to understand its potential in terms of ROI for the business. Then, it can be formulated accordingly. The easiest way is to put a dollar value on legal work by reference to a lawyer’s time.

For example, it currently takes five hours for a lawyer in your team to draft a contract, which costs the business $400. To make your case on investing in technology, you should highlight that implementing contract management technology will take one hour for that same lawyer to do that same task. Then, the $320 that you saved on could be allocated to another revenue-generating task.

What About the Rest of the Company?

Many teams will only implement legal technology within the legal team. However, there is often a much higher ROI outside of the legal team. Technology will not only enable you to do more and to do it faster, but it will also help you do it better. There is much higher value to be derived from efficient legal activities by achieving a better outcome across the business as a whole.

For example, implementing tools to review all your leases and highlight key terms will help your bargaining power when negotiating with landlords. Furthermore, having standard non-disclosure agreements ready can help you be faster than competitors in accessing a new market or an opportunity.

Key Takeaways

To decide whether or not investing in legal technology is appropriate for your business, it is essential to understand what:

  • problems you are trying to solve; and
  • the business will gain from solving these problems by investing in legal technology.

This analysis is critical, as it will make it easier for you to decide which tools would assist your legal and commercial teams. We explore those tools and the selection process in Part 2 of this series. If you have any questions about implementing legal technology, contact LegalVision’s legal transformation lawyers on 1300 544 755 or fill out the form on this page.

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