Technology is a must-have in today’s in-house legal departments. With growing amounts of data to review and a variety of third parties such as law firms, service providers, internal business units, and other stakeholders involved, corporate counsel must leverage technology to protect and serve their organization.
Likewise, it goes without saying that the right technology has the potential to make a significant difference in legal department operations. It not only increases productivity but ensures accuracy and efficiency in all processes across the board, adding value to the department and the business overall as a result.
To support in-house counsel in navigating the shift into a more digital, automated workplace and identifying key challenges companies face in this respect, ACC partnered with Exterro, a leader in legal governance, risk and compliance software, to deliver the 2021 Legal Technology Report for In-House Counsel.
With survey responses from 250 in-house counsel and legal operations professionals across 18 countries, the report examines the key trends, top technologies, implementation processes, and challenges faced by in-house legal professionals in the technology context.
The role of technology in today’s uncertain times
The COVID-19 pandemic acted as a catalyst for digital innovation in legal departments all over the world. According to Giorgio Rizzello, Legal Director EMEA for Johnson & Johnson, and panellist of the Exploring Innovative Technology session at the 2021 ACC Europe Virtual Conference, companies had to act quickly in consulting IT specialists to universally adopt applications that had been available for years while also introducing new technology to keep their businesses afloat during the health crisis:
“The pandemic imposed legal departments to work in a smarter way. […] using cloud-based applications which have been there for many years was not always the rule. It has now become a rule during the pandemic. Our legal department has never been so connected, working together in the same document, and becoming familiar with using cloud-based applications, team-working applications in very efficient ways. So, I do think the pandemic has probably helped legal departments to speed up innovation.’’
With the COVID-19 pandemic, unavoidable climate change, and the constant evolution of business and regulatory environments, in-house counsel must ensure legal defensibility for their organization. To achieve this, technological advances in the areas of e-discovery, matter management, and privacy should be placed at the forefront of any business strategy.
As per the Legal Technology Report, e-Discovery technology ranked number 1, with matter management and privacy technology rounding out the top 3 technology areas required for ensuring defensibility. The emphasis on litigation and privacy showcases in-house counsel’s awareness of the increasing demands that regulators and rapidly growing data volumes are putting on the organizations they are advising.
Top technology uses in legal departments
Matter management, e-billing, and contract management have been declared as the most effective areas of technology by the legal professionals that use them. According to the report, 66 percent of those who use matter management tools, 64 percent use e-billing, and 61 percent of legal operations professionals using contract management tools rated these as the most effective technology areas for legal departments out of a list of 14 options.
Moreover, most legal departments wish to leverage technology to improve contract management, data privacy, and litigation activities. Contracts are the top area where participants want to leverage software more effectively (77 percent of the respondents), with privacy (40 percent), and litigation (25 percent) rounding out the top three.
When assessing the type of technology required, one must not overlook the differences between the category of legal professionals that will use it. The report has shown that lawyers aim at leveraging software more effectively, especially with regard to contracts, privacy, and compliance issues.
In contrast, legal operations professionals are less focused on these areas, but twice more likely to leverage technology more effectively in litigation. Likewise, matter management tools seem to be most helpful in reducing costs, according to lawyers, while legal operations professionals highlight the importance of e-billing technology in achieving the same objective.
Challenges in purchasing new tech solutions
The report found that companies with revenue of less than US$1 billion tend to involve between 2 and 5 individuals and take less than six months to purchase new legal technology. This becomes increasingly complex in larger organizations, which tend to involve more individuals in the decision-making process.
As a result, the average implementation waiting period can be anywhere from three to 12 months and involve more than five people for larger organizations. The time-consuming process can constitute a considerable pain point for legal professionals seeking a timely solution to everyday challenges.
Another aspect highlighted has been the fact that software applications are often not connected to one another. This leads to challenges in having to familiarize oneself with a variety of user interfaces. All being unique, this can be confusing and cumbersome for users, particularly when they experience a lack of IT support. Many respondents indicate that they would rather have a single comprehensive and unified software platform, and this is true across all legal roles.
Technology in legal departments – the bigger picture
While nearly two thirds of respondents reported that having legal technology in-house is now a must-have, and over 50 percent admitted that they are interested in buying legal software in the next 12 months, the adoption of new technology by legal departments globally still leaves a lot of room for improvement.
For one, one in six study participants indicated that their legal processes are largely experimental, with no management or dedicated budget, while 76 percent said that their processes are somewhere in the middle of the advancement scale.
At its core, technology plays the role of a business enabler. It should be easy to use, as well as solve existing problems and everyday pain points. When the right solutions are introduced, legal departments are given the ability to work more accurately and efficiently, which in turn gives everyone more time to focus on higher-value activities.
‘’A prerequisite for implementing digital innovation are lawyers who are eager to learn,’’ says Gloria Sánchez, Head of Legal Technology & Transformation at Banco Santander, and panellist of the Exploring Innovative Technology session at the 2021 ACC Europe Virtual Conference.
Companies looking to achieve optimal results in introducing new technologies to legal departments will require an efficient implementation strategy and top-down management support and training. It is important to identify how individual users adapt and interact with new technology and meet them where they are – start with the early adopters so they can help be ambassadors for their colleagues, followed by the early and late majority, and conclude with those most resistant to change.
To learn more about this topic, these ACC resources might have the solution you’re looking for:
From Business Intelligence to e-billing, from knowledge management software to workflow tools – do you want to know what legal tech your peers have implemented? We asked, they answered.
The in-house legal practice is changing. The more-for-less challenge is becoming increasingly intense. In response, savvy in-house counsel are creating and implementing new and clever ways to deliver legal services. These exciting in-house innovations not only address current in-house challenges but also help future-proof the career trajectories of their creators. But sometimes, there is no budget for innovation and technology. What then?
Check out the ACC Maturity Model Foundational Toolkit on Technology Management. The toolkit can save you time and money when optimizing processes, technology, and human capital to improve efficiency and cost-effectiveness.