Over the next few years, leading in-house legal functions will focus more aggressively on continuously balancing resource decisions for specific areas of work, whether they rely on in-house counsel, in-house non-lawyers, law firms or lay service providers. In addition, they will enhance legal technology and innovation skills within their teams by upsetting existing staff. expertise in other internal functions (e.g. through rotation programs) or external parties (e.g., through secondment); or hiring new talent pools. Gartner experts expect legal departments to triple their spending on legal technology by 2025. Developing a multi-year legal technology strategy that can evolve with changes in the business environment and advances in the technology market will be critical to success. Legal departments should avoid ad hoc technology purchases that are misaligned to help the function achieve its short- and long-term business goals. In addition, most legal departments do not plan well for such initiatives. A common mistake is to follow a legal technology roadmap without sufficiently considering the needs of businesses or end users. Typically, companies that look at how a technology improves certain business functions or business outcomes perform better than companies that don`t. A recent Gartner survey predicts that legal departments will triple their spending on technology by 2025. These expenses enable the purchase of workflow and automation tools, contract lifecycle management systems, legal applications in addition to business application platforms such as Microsoft, SAP, Salesforce and ServiceNow, as well as the adoption of specialized non-legal technologies for legal challenges related to artificial intelligence (AI), ML, advanced analytics, process automation and other emerging technologies. Law firms are also increasingly using other legal service providers (ALSPs) to effectively outsource routine services such as document review, contract management, litigation support, electronic disclosure and disclosure, investigative support and legal research, intellectual property management, and even financial transaction analysis as part of legal due diligence.
business combinations. “Eighty-seven per cent of the legal departments we surveyed in 2020 expect their total number of full-time internal employees to remain the same or decrease,” says Hutto. “Traditionally, larger workloads could only be managed through increased internal productivity or expensive external advice. Advances in natural language processing and machine learning (ML) technologies offer a third way to address these critical challenges. Consider a role in legal operations. What was once a new addition found almost exclusively in tech or financial services companies has achieved mainstream status, with 58% of departments surveyed across all industries fulfilling this role in 2020, up from 34% in 2018. To get the best return on CLM investment, legal departments need to prioritize functions that match the maturity of their processes, as opposed to a “big bang” approach that will likely only achieve a fraction of the expected value. In-house legal departments have long been resilient and risk-averse when it comes to automation, but the impact of the pandemic has forced many to shift gears in 2020 and pursue or at least actively consider further automation of certain legal activities, particularly those related to large corporate transactions. The challenge now is to decide which technologies to use to achieve real business results.
The coronavirus pandemic has created new pressures that have led more legal functions to pursue or consider automation, even though they have long resisted changes in this area. The following five predictions can help business leaders plan their legal technology investments and broader transformation efforts. The prevalence of the role tends to increase with the size of the organization. What could be the next innovation role in corporate legal teams? A Gartner study notes an increase in investment in legal project managers (up 56%) and data scientists working in the legal department (up 30%). To leverage some of the broader transformation investments of other functions, specialized legal technology providers will increasingly build legal applications on business application platforms from Microsoft, SAP, Salesforce and ServiceNow. These will appeal to large companies that want to leverage existing investments and ensure easier integration. The growth of new legal technologies, the use of ALSPs, and reliance on the cloud have security implications. At the same time, the current economic and geopolitical turmoil makes law firms an even more attractive target for traditional attackers and nation-states.
So: There is no reason to go it alone. Some leading legal departments find willing (if not enthusiastic) innovation partners in the law firms and non-firm service providers their departments already work with. Gartner`s research highlights the impact of technology innovation on organizations` legal and compliance goals. In particular, it examines the positive and direct impact of legal technology on companies` legal productivity and efficiency, its potential to increase compliance risk and complexity, and its transformative role in the legal value chain. “The new pressures of the coronavirus pandemic have certainly acted as a catalyst for this change,” said Zack Hutto, consulting director at Gartner. “Legal and compliance teams have rarely been at the forefront of modernization, digitization and automation. The pandemic has flattened staffing budgets and increased legal workload. Technology is the most obvious solution for many legal departments. The trend of increasing workloads and fixed budgets puts efficiency at the forefront. This means that legal departments need to improve their processes, legal technology implementation, analytics and other digitization strategies to cope with this increased workload. Specialized technology providers have long dominated the legal technology market, with the largest general-purpose enterprise software providers having limited advancements in corporate legal services.
However, the demand for legal transformation and compliance now goes beyond the departments themselves, as CEOs, CFOs, and CIOs recognize the strategic value of law and compliance. Corporate lawyers who do not properly plan their technology investments risk wasting money on ill-adapted and poorly adopted systems. The hype of tech marketing leads to high expectations and ambitious deadlines that can rarely be met. Efficiency concerns have already led teams to consider the optimal and optimal use of their teams` time and expertise, including shifting work from lawyers to non-lawyers. However, promoting significant improvement and innovation efforts is likely to require skills or perspectives that differ from those typically nurtured in traditional legal education. Failure to address unrealistic stakeholder expectations about a technology`s payback period can help identify problems or poor performance with a new technology. Legal leaders can find themselves in a vicious cycle where stakeholder disappointment leads to a new retirement and deprives teams of important inputs to refine and adjust investment over time. The proportion of legal budgets devoted to technology will increase significantly by 2025, according to a 2020 Gartner survey of legal leaders. Eight to seven per cent of legal departments in 2020 expected their total number of full-time internal employees to remain the same or decrease. “The COVID-19 pandemic has put even more pressure on already overburdened in-house legal teams, with staffing levels unchanged,” Hutto said.
“Lawyers are finding that other departments are succeeding with their technology investments and have also made significant strides in the legal technology market.
Comments are closed.