Shaky economic ground certainly describes our current climate: businesses are feeling the pinch and looking for ways to cut costs and drive value. As a result, legal teams are under pressure to optimize efficiencies and find cost-effective solutions.
We know from previous times of economic hardship, namely the 2008 crash, that legal teams will see an increase in workloads, particularly in litigation where every last zero on a contract will be scrutinized. At the same time, as budgets tighten, the demands to do more with less will intensify.
It's not all doom and gloom, however. Depending on how one views the situation, additional pressure on the legal function may be exactly what fuels the need to thrive. "The impending recession can give us the motivation to work on the efficiencies we'd been planning," says Shaun Plant, LawVu's Chief Legal Officer, in a recent LawVu webinar on how legal functions can not only survive but thrive through a recession.
There is real gold in this approach. McKinsey & Company's 2019 research showed that resilient companies which took steps to survive the crash have genuinely thrived as an outcome.
So what does a function need to do in order to 'thrive'?
If your legal team is under scrutiny to cut costs, eliminating low-value, high-frequency work is the place to start. Doing that begins with ditching clunky and expensive legacy tech; using multiple-point solutions hinders teams under pressure.
Streamlining spending by servicing only one technology subscription is a smart move. Not only will legal teams save money, but making the move to one centralized contract, matter management and legal workspace also saves time. If one thing is crucial to surviving a recession, it's to work smarter.
Bring on a legal ops' expert
Hiring a legal ops manager is the most obvious solution to creating efficiency and driving value. Many executives blanch at the initial cost of bringing on a legal operations professional or implementing legal tech. Mollie Tregillis, Director – Legal Optimization Consulting at MinterEllison, said that the Return On Investment (ROI) is not a big deal in this situation; legal ops professionals generally pay for themselves in no time.
Data is the key. Lawyers are not data or operational analysts, so why is there an expectation they can turn legal data into rich, opportunistic information? A legal ops professional who specializes in legal data can analyze it and see where time and money are slipping through the cracks and where opportunities lie.
Driving productivity through insights is where the legal ops hire can really prove their value. The compilation and analysis of data can paint a picture of a legal department's operations, from areas of repeat work, outliers, and tasks that could be done more efficiently. This also allows legal to cross-reference what they are spending their time on so it aligns with company goals. Data builds a business case for legal tech and automation.
There are simple ways to optimize productivity before you've even introduced legal tech, namely creating self-service templates for business users. Consider what frequent requests the legal team deal with and create a standardized response to these. These may be routine contracts or knowledge articles. Generally, an in-house counsel deals with these types of requests. Automation saves time and provides in-house counsel with the opportunity to work on the strategy - the juicy stuff.
Prepare for an influx of specific work
Looking to the past is a sure way to prepare for the future. Plant points out that during the 2008 Global Financial Crisis, legal teams found themselves inundated with litigation and insolvency work as companies dealt with liquidating businesses.
Prepare for this. Do you have the right resources to deal with litigation? Do you have a good relationship with an outside counsel you trust? Could Alternative Legal Service Providers serve you in this situation? Ensure that you have a plan for managing litigation work as it begins to pile up.
Back yourself up
Harnessing data through legal tech and a legal operations specialist not only gives you efficiency and accuracy but proof. Collate the data on the value the legal team is adding. Produce reports on the performance of the function, engagement with the wider business, successful negotiations, and legal spend.
A legal team that can employ the strategies outlined above will find that when the uptick comes - and it will, eventually - they are in the best possible position to navigate growth. Surviving will allow them to thrive.