Digital Transformation (DT) requires corporate law departments to rethink the entirety of the legal work performed on behalf of the business enterprises they serve, both in terms of substance (what legal work is done, if it should be done, what isn’t being done) and process. DT represents an evolution of an organization’s law department from reliance on manual processes and point cost reduction measures to embracing new operating models powered by technology to have a sustained, meaningful, and measurable impact on business results.
Survey results from a 2020 Gartner report suggest that law department leaders recognize the need to innovate in the face of expanding business needs. Many recognize the requirement to modernize their own operations and deploy technology to aid the delivery of legal services. Yet, those same surveys indicate much lower levels of confidence among law department leaders that their organizations are capable of successfully executing a comprehensive DT strategy.
In many cases, this hesitancy may result from the increasing challenges of cost-containment facing many law departments that operate in a business climate of rising legal uncertainty and regulatory scrutiny. This is exacerbated by a marketplace full of undifferentiated legal services’ technological solutions that law department leaders are unable to effectively deploy to enhance their organization’s legal needs.
As a result of this tension between the acknowledged need to reform and reluctance to fully embrace transformation strategies, many law departments find themselves doubling down on manual process reform and labor arbitrage via outsourcing or contract labor to achieve cost savings that still require substantial and ongoing human efforts to monitor and sustain.
Although such strategies can be effective to reduce costs in the short term or on individual matters, they are merely the first stage of a mature DT strategy. Some corporate law departments automate existing processes through matter management systems, workflow automation, document repositories, legal spend analytics, and other tools to move further along the DT maturity scale. These legal departments achieve greater cost savings, consistency and speed of legal response to business needs.
An even smaller cohort fully embrace mature DT strategies and implement comprehensive systems for smart data storage with auto-tagging and analytical capability, real-time insights into resource productivity, and self-service portals with AI-augmented technology for low touch/no touch legal support for common business questions. These organizations move beyond traditional risk mitigation and embrace a proactive, predictive approach to legal service that is far more impactful on the organization’s operations and financial performance.
By embracing DT, law departments evolve from cost centers into true revenue-generating business partners for the organizations that they serve. To learn more, visit the Digital Transformation page.