Legal Tech Has Reached a Tipping Point: What’s in It for You?

Great legal operations have become essential to the success of an organization.

As a company that works with more than 1,200 corporate customers and more than 14,000 law firms around the globe, we have been able to see and be a part of enormous changes in the growth of in-house legal teams and their responsibilities. These changes have been in response to a variety of forces, including an increasingly complex web of domestic and international regulation, company growth, an expanding view of the role of legal, and the increased workloads corporate legal teams must contend with as a result. ​ The legal services industry in the U.S. is expected to account for $288 billion in revenue by 2018, up 13 percent since 2014, according to the U.S. Census Bureau.

As legal departments and their responsibilities have expanded, so too have the definitions of success. Today’s legal departments are frequently under internal pressure to be better strategic partners for the enterprises they serve. They now have to function as true business units, with defined KPIs and the need to control costs and optimize responsiveness and productivity.

At the same time, technology adoption is surging across all sizes of in-house legal departments as corporate legal has become serious about the business of legal operations. An Altman Weil 2017 survey of CLOs found 57 percent had increased their use of technology in the past year to create efficiencies; Gartner predicts that global Enterprise Legal Management (ELM) adoption will grow by 50 percent by 2020. On the law firm side, 56 percent of respondents to a recent New York Law School survey were targeting new hire associate candidates with proficiency in legal technology.

Against this backdrop, easily implemented, easily adopted, SaaS (Software as a Service) solutions are becoming the norm, and technologies including legal workflow automation, machine learning, and business intelligence are replacing outmoded and all-to-often manual processes. These solutions are giving rise to increased efficiency, better-controlled internal costs and outside spend, and greater visibility and governance over every aspect of the corporate legal “ecosystem.”  We see this combination of forces as creating a tipping point for the digital transformation of legal, such that there is an expectation that problems in this sphere have a technology solution.

Legal Rising

Great legal operations have become essential to the success of an organization. There’s a “legal rising” movement at hand, as corporate legal looks for the solutions and best practices to elevate both business performance and its influence and impact within the enterprise.  

One very tangible sign of that movement comes in the form of the rapid growth of the Corporate Legal Operations Consortium (CLOC), whose membership has grown from 40 to 1,800 in just the past 3 years. In that time, CLOC has stepped in to take a leadership role and provide a platform for thought leadership and collaboration among the legal operations community, and for pushing the collective expectations of technology partners.

But not all legal departments are identical, and when it comes to technology, one size (or capability) does not fit all. That’s why finding and successfully implementing the right solution is so difficult for many departments, especially with the proliferation of legal tech providers and products that we’ve seen over the past few years.  Enter the keywords “legal technology” at startup jobs site AngelList and 863 companies will appear, a number that keeps growing.

This explosion of competing solutions often leads to confusion, as CIOs, GCs and Legal Ops leaders all search for secure, robust, and bottom-line-friendly answers to their growing operational challenges. To put it another way, while legal departments have less and less choice in whether to embrace technology, they are faced with increasingly overwhelming choices when it comes to what technology to implement. Many are backed into a corner by the very real pressures that come with the costs of the status quo:

  • Legal departments lacking a matter management or Enterprise Legal Management (ELM) platform can spend three times as much time simply creating a matter, using manual processes.
  • They spend ten times as much time creating a report, and often lack accessibility to basic information such as numbers of open matters, and workload by practice area.
  • They can spend twice as much time hunting down information to appropriately research outside counsel.
  • They lack visibility into outside counsel spend – and thereby miss out on savings of 5 to 10 percent annually on that spend, attainable simply by having a proper e-billing solution in place.

At a more fundamental level, the legal department that fails to adopt the right tools is perceived as being behind other cost centers in terms of technology, responsiveness, and accountability. Rather than being able to lead the enterprise, they’re relegated to a back seat, a “necessary evil” other departments must contend with.

The Advantages of Embracing Digital Transformation

The gains of adopting the right technology, on the other hand, can be extraordinary. By implementing a proven legal operations platform, even a modestly sized 10-person legal department can expect to realize $250,000 per year in staff time savings and reduced legal spend, based on proven results like:

  • A 75 percent reduction in the effort to open and assign new matters and budgets.
  • A 90 percent reduction in the time spent generating reports for business users.
  • A 75 percent reduction in the time spent storing and referencing matter documents.
  • A 50 percent savings in attorney time spent searching for and reconciling matter data. 
  • A savings of 30 minutes per invoice through electronic review and approval of invoices.
  • And as we mentioned, an immediate reduction in outside counsel spend of at least 5 percent through automated invoice review and enforcement of billing guidelines.

Beyond these obvious and measurable benefits, perhaps the greatest benefit to legal departments is the potential to shift how the department is viewed, to be seen as more efficient, businesslike, and more responsive partners for everyone in the organization. The right technology adoption can lead to them outstripping other departments in terms of innovation and efficiency, resulting in a legal department that serves as an exemplar for the rest of the company.

Ideally (and in our experience, often in reality) this newfound business partnership, coupled with the application of technologies such as workflow automation, enables the legal department to become a net exporter of innovation in the enterprise, enabling legal best practices and compliant processes to proliferate throughout a company. There’s no need to knock at the door of the legal department when you know your operations are already compliant, thanks to enterprise-wide tools the legal department first evangelized.

The Tipping Point

Many articles about technology trends describe an approaching tipping point, whether that be for virtual reality adoption, wearables, 3D printers, or so many other technologies we hear about. Regarding the tipping point in the digital transformation of legal operations, however, you’ll note that we’re speaking in the present tense. We are currently experiencing a deep and broad transformation of an entire industry that’s happening in the present, not speculated about in the future, and there’s no going back.

While this transformation may be impacting different legal departments in different ways – with some much farther along in the journey of their own operational transformation than others – there can be no doubt that there are proven technology solutions that can dramatically change the impact of the legal department, nor can there be a doubt that finding and deploying the right solutions has become an expectation of the professional legal operations role. What’s in it for you? The opportunity to meet and even exceed the growing demands placed on legal: to rise to the level of true business partner, to succeed in transformation, to see success differently. When all is said and done, this is the opportunity to make a difference in the success or your companies far beyond the borders of the legal department. Legal rising.

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As Chief Executive Officer, Jason leads a talented management team to drive growth and innovation for Mitratech and its clients. Jason joined Mitratech in 2012 and has more than 15 years of experience leading legal technology, software and services businesses.