Digitalization was gaining momentum prior to 2020, with the ever-increasing pressure to do more with less. However, COVID advanced that transformation more in one year than we have seen in the last ten. Even with progress being made to vanquish the virus, it is probably safe to say that remote working will not abate fully when the pandemic subsides. Data from the Association of Corporate Counsel (ACC) shows that just under half of corporate law departments plan to keep their COVID-era work-from-home (WFH) policies in place even after the pandemic has passed.
That, combined with ongoing budgetary pressure and heavy demand for legal services, means legal transformation will only intensify. Now more than ever, technology is shaping the parameters of a business’ strategy and growth. Real digital transformation is necessary to survive and thrive.
Dirk Naumann, general counsel, Orange Business Services, recently shared his observations on legal trends accelerated by COVID in the ACC Docket.
“For legal and risk management functions,” he writes, “the pandemic has changed how emerging trends are viewed by the business. Where requests to embrace change may have been met with a shrug before — if a reaction at all — COVID-19 has magnified those trends and elevated them. As drivers of a low-touch-high-efficiency ‘next normal,’ general counsel and compliance officers will need to adapt the way their teams work.”
Let this be nothing short of a wake-up call for law departments. For all the attention legal technology received in recent years making the rounds in business law journals and various communities, many law departments are still deeply cautious, wary of investing time or money into technology solutions. ACC’s 2020 Legal Operations Benchmarking Maturity Report, a study of over three hundred legal departments’ technical progress across 15 functions, found that very few legal teams could call themselves “advanced” across all functions. No surprise, compliance, the cornerstone of most departments, was the most mature function, with 28.7% of respondents in an advanced stage. However, innovation management is the least mature, with only 5.4% reporting an advanced stage. It will be interesting to see what, if any, impact COVID has on innovation management maturity in the coming years.
But what solutions are legal departments adopting?
According to the 2021 ACC CLO Survey, 42 percent of CLOs plan to adopt new legal technology solutions to improve department efficiency over the next year; 10 percent have already recently done so. Among those planning to do so this coming year, 67 percent are looking to invest in contract management technology, followed by document management and eSignature tools respectively.
A parallel trend is the increasing application of enterprise technology to legal work. Given cost and efficiency pressures, which the pandemic worsened in many sectors, many legal departments have discovered and implemented platforms with integrated features, such as the Microsoft 365 suite, or adapted other enterprise tech like ServiceNow, to meet their needs. These are technology solutions that require little to no additional investment. They are also quick to implement, and help staff gain the experience to properly select legal-specific solutions in the future.
According to Gartner research, at least 25 percent of spend on corporate legal applications will go to non-legal technology providers by 2025. These trends were picking up speed before the COVID pandemic.
Another common solution – although it does require investment – is to hire legal operations professionals. The 2021 ACC CLO Survey also shows that legal operations hiring has risen steadily among legal departments for years, in tandem with increasingly complex regulation and, yes, increasing reliance on tech solutions. The definitive and quantifiable value added by these professionals on improving function maturity was also seen in the ACC Benchmarking data.
In addition to software and increasing involvement of operations professionals, we’re likely to see in this second year of the pandemic, is a formalisation of innovation in legal departments. This refers to ongoing organisational processes to develop innovation ideas, rubrics to vet them, protocols to prototype and test them, and a defined way to roll them out. The most promising solutions have involved new applications of extant technology, like artificial intelligence (AI) and robotic process automation (RPA).
Formalised innovation has an intuitive, non-technical side as well: it forces siloed teams to work together. Many large legal teams are divided into autonomous, non-communicating bailiwicks; a standing innovation management function, with its focus on holistic solutions, dissolves the barriers through multi-functional task forces or standing committees.
If your legal department needs to make rapid and steady progress in digitalisation, formalised processes might be a good place to start. ACC recently hosted a session on Building an Innovation Management Function in legal departments in the EMEA region. Innovation may be happening in pockets of your legal department, and it may even be a priority, but building a cohesive, cross-functional innovation process, featuring ongoing sourcing, evaluating, prototyping, testing and rolling-out new solutions could be your department’s next step. And it doesn’t require dedicated staff!
Otherwise, these ACC resources might have the solution you’re looking for:
Get started with these 10 tips on leveraging the technology you have
- Check out the ACC Maturity Model Foundational Toolkits on Innovation Management, Knowledge Management and Technology Management. The toolkits can save you time and money when optimising processes, technology, and human capital to improve efficiency and cost-effectiveness. (Included in ACC Membership)
- Read the newly released 2021 ACC Chief Legal Officer Survey Report. Spoiler alert: Contract management is the top legal tech area in which CLOs plan to invest.
- Learn about digital transformation strategies and innovative tools for the legal department at the 2021 ACC Europe Annual Conference. (Registration required.)
Regardless of geographic location or industry, COVID-19 has forced everyone to rethink their short- and long-term strategies to ensure effectiveness. While this digitalisation and change in approach was on the radar for some, especially larger law departments, COVID moved up everyone’s timeline to the here and now. Those who continue to adapt and be agile in their approach to technology and rethinking internal processes will be able to position themselves for success beyond COVID.