If you’re not sure how to convince your business to pay for the implementation of legal tech, we’re here to help you create a business case that will pique the interest of your CFO.
Building a solid business case for legal tech requires communicating the value and return on investment for the business. While this will differ for individual legal departments, there are four universal measures that apply to every legal department and their organization.
Time savings and increased efficiency
Modern matter management systems harness automation and templates to speed up contract creation and low-value, high-frequency work. Evidence from comparing processes shows that without automation, legal teams are spending 3x as much time creating a matter, 10x more time creating a report, and 2x as much time searching for information.
One of our clients formed a new in-house legal team a few years ago. With an annual operating budget of $237 million in 2017 and a workforce of over 800 people, the in-house team faced a large diversity of legal work, tight deadlines, and a high volume of requests for advice. Their General Counsel felt the team was spending too much time triaging files, and they needed something that would allow them to focus on the actual tasks instead of the admin required to get a file underway.
The client implemented a single platform to assist with legal workflow and matter management, the intention being to provide the team with more visibility and leading to greater efficiency. Upon implementing technology to streamline their processes they reported that they were immediately aware of the advantages of having all moving parts working together and could clearly demonstrate at least one hour saved per legal team member per week.
Accurate data governance and discipline around processes allow the team to be more efficient. By implementing technology, a 10-person legal department tells us they can demonstrate a conservative 10 percent efficiency gain across the entire legal team, which adds up significantly when you work out your colleagues' hourly rate.
McKinsey reports that employees spend 1.8 hours every day searching and gathering information. In a platform which contains your matters, contracts and documents, a search shouldn't take more than 5-10 seconds to find the document you are looking for.
Lawyers are in the business of risk management, especially in-house lawyers who act as the watchdog for their organization. Therefore, an important part of your business case to implement legal tech is highlighting the elevated risk management practices that legal workspaces enable.
A legal workspace handles all legal matters, requests, issues, and contracts that pass through legal’s hands, giving you centralized, captured data. Aside from ensuring that key dates are never missed, legal workspaces will also assist you to manage all of your obligations, undertakings, and project management.
Without visibility and data, the ability to proactively manage any associated risk becomes exponentially harder, if even possible, and the resulting consequences can be both detrimental and irreversible. If the “who”, “what”, “when”, “where”, and “why” of a litigated matter is stored across email inboxes, shared drives, and excel spreadsheets, staying on top of this data is arduous and easily mismanaged. Establishing a system of record for all matters eliminates risk by centralizing all data and your team gains insights, efficiency and security in having a one-stop-shop for all things legal.
Metrics and data-driven decisions
Data has multifaceted benefits for a legal department and organization. When looking at legal through the lens of predictive (or prescriptive) analytics maturity, in-house legal departments are generally working from a place of hindsight. That is, looking back at what has previously happened. It’s the same place other departments were decades ago.
We describe a metrics journey as moving through the stages of hindsight, through to insights, foresight, and eventually to the optimum stage of amplified intelligence and automation. This is where your data can not only see the future but be focused to proactively contribute to the important strategic decisions being made within your organization.
To create a convincing business case for legal tech, one should propose how the use of metrics can improve the legal team in line with the business’s strategic goals. For instance, data can be used for legal work prioritization, reducing external legal spend, risk management, automating and streamlining manual processes; and even freeing up your legal team to work more flexibly which can enhance their wellbeing.
What ties these four selling points together is that legal tech creates ROI for both the legal team and the business itself. Document generation significantly reduces time otherwise spent manually doing these tasks, a central place for all data reduces time spent searching for information, and an online workspace allows for real-time collaboration. Sharing the ROI that tech will bring to your legal department is speaking your CFO’s language.