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Can your chief digital officer help unlock the value of your legal function?

We often boast that the legal function has enormous value they can add to a business with the right level of engagement and tools. We see many of our customers digitizing their business as a cornerstone for creating a thriving business environment and driving future success. 

This includes the business legal function, where integrating legal into the business requires breaking down the walls the business has created around the legal team. Doing this requires business-wide investment and collaboration from the lawyers, C-Suite, and business units.  But there is a key player amongst these we haven’t yet discussed - the Chief Digital Officer (CDO). 

Engaging the CDO ensures consistency across the business as they act as the champion between legal, the organization, and external technology providers, creating an optimal environment for technology integration.  

A CDO sits adjacent to a Chief Information Officer (CIO). Where the CIO is responsible for the running and maintenance of a company’s technology, the CDO is trying to change how the business operates for the better, harnessing digital tools to create velocity and return on investment (ROI). They look at the business and ask questions such as “how digitized are we?” or “are people working on high-value things from a knowledge perspective rather than doing tasks that could be automated?” When asking these questions, the CDO will soon see that whilst most business units are well on the digital journey there is often one big opportunity sticking out from the rest, and that is the legal department. 

Nobody wants legal perceived as the handbrake of the business.  Unfortunately, it often is. Where the sales team is operating with Salesforce, the finance department uses NetSuite and payroll, human resources may employ Workday, and the core business functions may use SAP or enterprise resource management systems, legal is still typically using Microsoft Outlook to manage their tasks. The implication of this is that whilst other areas of the organization can operate at a high velocity, aided by software that creates more efficient processes and automates manual tasks, legal is miles behind and slowing things down. 

Risk, compliance, contracts, and M&A documentation all going through legal creates a bottleneck as they are manually reviewed by in-house lawyers using dated systems or no system at all. This isn’t for a lack of legal technology solutions, however, as in reality, there is a feast of niche legal solutions waiting to be adopted by in-house teams. The problem can be understanding what software would best suit an organization (based on both legal team size and variety of legal work) and how to effectively implement it. This is where the CDO steps in. 

Change begins at the top, and the CDO will immediately look to the GC and ask if they are capable and willing to digitize their business function. The CDO needs to understand how technology will elevate the legal function. They will ask if tech will help take this company to the next level? If that answer is yes, next is the how, and this involves deciding how to operate and which technology will best serve the team, providing transparency of data and one source of truth across the entire business. 

Adoption of the software will be critical and require the GC’s leadership and understanding of the benefits that a change process will reap. Making this adoption as frictionless as possible by the whole business is the aim of the CDO, but to do this successfully requires the team working towards a common goal. Here’s how they can help:

Champion the legal team onto the top table

Onboarding change champions will fall under the CDO’s remit, finding someone who is respected by their peers in the legal team and who understands how the team will operate in the future with technology adoption. The union of the GC and the change champion acts as the panadol for the legal department while they get used to the teething pains of working with new software and look to leadership to demonstrate best practices. 

Building a rock-solid case for change

Digitizing the legal team is largely to do with getting the team on an even playing field with the other business units, but it also presents many other benefits to the business that the CDO will be angling for. A 2020 Thomson Reuters LDO survey into the demand for legal services during the pandemic shows controlling outside counsel costs, focusing on internal data security, and driving internal efficiency in the delivery of legal services are high priorities. 

The desire to control outside counsel costs and insource more work is increasing as corporations balk at high private practice costs and seek to retain legal knowledge of their organization internally. This is an ideal opportunity for the GC’s new way of working to free up investment to fund new technology, and resources too.  

Digitization of the in-house team means implementing technology that can process the high-volume monotonous work which has traditionally been shipped off to law firms with their masses of graduates. It also protects data and Intellectual Property (IP). In-house teams have always been at risk of losing IP when staff leave, often dealing with massive gaps in their knowledge of the business and client proceedings when an integral lawyer moves on. By having better data recording, management, and tracking, this risk is largely eliminated. 

Setting up for future success

Setting up the in-house legal team for growth is another benefit of digitization. Using legal tech results in a more efficient team. This, in turn, frees up spend which could be used on the expansion of the team itself, decreasing the dependency on outsourcing legal work. Having legal tech in place will also appeal to talent, especially younger generations who are tech-savvy and want to be working with efficient, modern systems. 

The relationship between the CDO and the in-house legal team is crucial to the success of technology integration. It takes the vision of the CDO, for both legal and the wider business, conjoined with the comprehension and willingness of the legal team themselves, to truly digitize in-house, changing the way things work for the future. 

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