Legal technology does help in-house counsel get more done in less time. But that’s just scratching the surface. Legal tech is here to change the paradigm and enable legal professionals to become even more of strategic partners that drive the business, not react to market changes.
In this chapter of our Legal Operations Guide, we look at the Legal Operations technology stack and discuss the benefits of legal technology for in-house counsel and Legal Operations teams.
What is legal technology?
Legal technology is the use of software tools and apps to support legal professionals, whether in-house counsel, law firms, compliance experts, or Legal Operations teams.
A rather broad term, legal tech covers a wide range of applications, including document automation, vendor management, compliance, eDiscovery, billing, data privacy automation and contract lifecycle management. And that’s just for starters.
What is the role of technology in the legal sector?
Legal technology lends itself well to high-level, general functions within a company, such as vendor management, risk management, compliance, mergers and acquisitions, and employee management.
But it is also employed for more specific use cases – think compliance with a particular labor law or an in-house policy on how vendors should be assessed, or professional privilege law requirements.
Given this flexibility, legal technology supports not just the legal experts, but the entire organization. It empowers everyone, from General Counsel and C-level management to HR specialists, compliance officers, and accounting departments, by automating, standardizing, and speeding up the day-to-day work.
As a result, all of these experts have more time to focus on strategic tasks, as well as work on projects that require case-by-case consideration.
What does legal technology look like in practice?
To see the benefits legal tech brings to in-house counsel, let’s have a look at a typical week for an in-house legal expert.
Legal departments are asked to advise on various projects, from mergers and acquisitions to customer relations and employee management. Some of these are first-time requests, for example when a new piece of legislation comes into effect, such as GDPR or CCPA.
But most of the time, legal departments are swarmed with recurring tasks, such as creating employee contracts or NDAs for various purposes. In fact, the EY Law Survey found that these requests take up 20% of in-house counsel’s time.
As they are asked to advise on a number of ongoing projects, legal departments receive dozens, if not hundreds, of requests from across departments. Most of the time, there isn’t a central channel through which these requests pour in, so in-house counsel receive them through phone, email, or other means of communication.
This leads to information getting lost, and time wasted on manual, recurring tasks that are still essential for the business. In many cases, there can be a drop in legal experts’ morale, and inefficient communication across departments. And as markets speed up and organizations grow, legal departments are strained even more.
Unfortunately, the situation doesn’t seem to be changing on it’s own any time soon. EY Law found that General Counsel expect workloads to increase by 25% over the next 3 years, yet headcounts are only expected to increase by 3%.
This makes legal tech all the more necessary. With legal technology implemented, legal departments can automate and standardize these incoming requests, by building a legal “front door.” Imagine a single channel through which all of these requests come in.
And even better – legal departments can remove themselves from cases where they don’t need to be directly involved. Colleagues from other departments will be able to get legal advice and answers to their basic legal questions directly through the legal tech.
Let’s say an HR team needs to hire for a number of roles fast. Once they find a candidate, they will approach the legal team for NDAs and contract creation. The legal team will then have to spend time using old templates to extract clauses that pertain to new hires – but what if some of them work in a different jurisdiction? This creates additional work and back and forth between HR and legal.
This is where legal tech comes in. Legal experts can build and implement a tool that would allow their HR colleagues to input the necessary information and receive a fully-fledged, up-to-date, on-brand contract that they can then automatically forward to new hires to sign. Once they sign it, all parties are informed, and the new teammate is ready to join the company. And all of this happened without legal being involved in manual work.
How does legal technology support Legal Operations?
As a function that is still emerging, the job of Legal Operations differs from one organization to the next. Still, as a rule of thumb, Legal Operations focuses on providing support and offloading in-house legal in areas such as information governance, data analytics, financial management, knowledge management, and strategic planning.
In terms of their day-to-day work, Legal Operations works on anything from choosing and signing contracts with vendors, to monitoring and managing the legal budget, taking care of staffing needs in legal departments, working with outside counsel, and selecting and implementing legal department tools.
This means that legal technology is an essential part of Legal Operations’ duties – and at two levels.
Legal tech helps Legal Ops support in-house counsel
First, Legal Operations needs to be skilled in identifying where legal technology can automate parts of or entire legal department workflows. Legal Ops needs to then take the lead on introducing these tools into day-to-day activities, as well as anticipate areas where legal automation will be beneficial.
Legal Ops improves internal processes through legal automation
Second, by relying on legal technology Legal Operations can improve their own projects, in terms of both quality and quantity.
Take vendor management for instance. Without legal automation, Legal Ops teams need to manually keep track of, manage, record, and store data on existing and prospective vendors and suppliers. When coupled with the fact that large brands employ tens of thousands of suppliers (Proctor and Gamble reportedly has 75,000 suppliers), it becomes clear just how much of a daunting task it is to manage all these contracts manually or even assess vendors for potential partnership.
Instead, with legal technology Legal Operations can create contracts for all of these vendors automatically, from end-to-end, and keep them safely stored, ready for access from anyone in the company who might need such data.
Benefits of legal technology for Legal Operations
Legal technology brings ample benefits to Legal Operations teams. But more importantly, it underpins the digital transformation of the entire organization.
As Legal Ops becomes empowered through legal automation and legal tech, this newly freed capacity moves through, from Legal Ops to the legal department to other business units and finally to the top management.
So how does this work?
First, legal tech allows Legal Ops to ensure compliant, error-free processes that support not just the legal department, but other business units as well.
Second, Legal Ops can use legal tech to automate all the parts of their daily work that simply have to be done, but take too much time and are prone to errors.
Third, as Legal Operations gets more time, they free up capacity to work on expertise building and give more high-level, strategic support to the legal department. They also can use legal tech to equip the legal department – but also compliance, accounting, HR – with tools that allow in-house counsel and other experts to do their job more efficiently.
And then finally, in-house counsel and Legal Ops work side by side with other functions on creating new, more competitive services and solutions (depending on the industry they work with and their business model), without getting tangled in manual, easy-to-automate work. This lets them be more agile, respond to customer demands faster and more precisely, and position themselves early in the market with new solutions.
Want to explore how legal automation and Legal Operations fit? Read our Workflow Automation for Legal Operations guide and learn about no-code and real-life use cases for more efficient Legal Ops processes.