Managing costs while demonstrating value to the organization. Balancing C-level digital transformation mandates with day-to-day legal casework and resource constraints. Growing complexity, volume, and cost of disputes and investigations. Expectations to be strategic advisors and proactive problem-solvers, not just reactive responders. An increasingly complicated regulatory landscape, along with geopolitical events and economic conditions. All resulting in overwork and exhaustion since the COVID-19 pandemic.
Today’s law department is at a tipping point.
The evolution of enterprise legal management software
Enterprise legal management software vendors evolved several decades ago in response to growing demands on corporate legal departments, with the goal of streamlining legal tasks, creating efficiencies, and reducing costs. The 1980s and 90s saw the development of dedicated matter management systems, and in the early 2000s, legal spend management became a key component, driven by the need to control costs by analyzing legal invoices and working with outside counsel to improve efficiency.
Today’s enterprise legal management systems are sophisticated platforms, often cloud-based, that integrate matter management, spend management, and other tools like contract management and e-billing. They may also include litigation management, document management, and regulatory compliance tools, and leverage AI and workflow automation to further streamline legal operations.
However, at the end of the day, given the mounting pressures on general counsels and chief legal offers, even the most sophisticated enterprise legal management systems have not been able to keep up with the pervasive inefficiencies of legal departments: the over-reliance on law firm partnerships get the work one regardless of cost or task.
Moving the needle to advance business outcomes
Law departments are slowly embracing transformation, in large part by adopting technology to make their lives easier, like enterprise legal management software and other AI-enabled technology.
But to really move the needle to advance business outcomes, forward-thinking law departments are looking at enterprise legal management not only as a software solution, but rather as comprehensive strategy for managing a law department encompassing resource management, processes, workflows, data analysis, and technology to optimize legal operations, including tasks like contract management, legal spend oversight, matter management, risk assessment, and compliance–all with the objective of improving efficiency and effectiveness of the legal team.
As part of enterprise legal management, law departments are establishing a baseline and roadmap to get from where they are to where they want to be. As part of this process, they are evaluating resources–who is best suited for which task, in-house counsel and legal professionals, their law firms, or their service providers.
Reengineering enterprise legal management
A significant portion of corporate legal departments are actively changing how they source legal services. According to a UnitedLex survey, 58% are prioritizing strategic changes to resource allocation, and 52% are re-evaluating their sourcing strategies overall. This often means a clearer division of labor: routine, less risky tasks are delegated to specialized firms or vendors, freeing up their primary legal counsel to focus on more intricate legal analysis.
As part of this enterprise legal management strategy, 52% of in-house teams are outsourcing routine legal tasks to specialized providers. This approach aims to lower legal expenses while improving efficiency and accuracy by leveraging specialized expertise and technology. These outsourced tasks can include a wide range of activities, from eDiscovery tasks and document review, to handling routine matters such as third-party subpoenas and data subject access requests, drafting responses to repetitive pleadings, contract review, intellectual property prosecution assistance, and support for M&A filings and related investigations.
This strategy of segmenting complex legal work into specialized areas and assigning each segment to the most appropriate provider allows legal departments to maximize efficiency and achieve significant cost savings.
A paradigm-changing model
Despite strides made by bifurcating work to law firms and service providers, unlike their business unit counterparts, legal departments typically lack access to a range of sophisticated, high-value expertise from elite consulting firms that serve as strategic business partners to holistically tackle operational challenges.
A handful of specialized service provider partners, coined enterprise legal service providers, are taking on more than just routine legal tasks or managed services, and are driving value in new ways for the law department and the organization as a whole.
These providers bring strategic, sophisticated consulting expertise to audit existing internal and outsourced resources and infrastructure, reengineer existing operating models, develop new law department metrics, and reengineer other operational elements. They also bring depth and breadth of domain expertise in all legal areas, from contracting and IP to litigation, investigations, and compliance, and a global infrastructure to deploy platforms fully integrate with the legal business processes they support.
By taking a holistic, strategic approach to enterprise legal management, law departments are better positioned to meet today’s demands.
