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Making a Business Use Case for Enterprise Legal Management Platform

Difficulty translating need into budget:
Even though General Counsels (GC) are aware of the advantages of adopting an integrated platform for automating legal functions, converting them into legal budget approval is a difficult terrain to tread. As businesses are working towards cost-cutting in almost every department, justifying the need for legal technology adoption is the newest challenge every agile GC has to take over.


The traditional board mindset as the most significant barrier:
Even though legal is evolving from its traditional role of just a mere supporter to an enabler of business strategic goals, the case for making a technology investment in the legal department is still not a top priority among the board members. With the changing business environments, chances are board members are already aware of the benefits of adopting technology but are constrained by the financials of buying and implementing the technology. To convince the senior management, in-house counsels need to create a business use case demonstrating not just the efficiency of adopting tech-enabled solution but also indicating a tangible ROI to the spending. Apart from the overall efficiency brought by the technology, the C-suite and board members are more interested in seeing how well the technology is solving the said problems, how well it is integrating with the current workflows and what will be the impact of delaying the process, both on finance and reputation of the company.


Legal departments often face challenges in their pursuit of digital transformation, including resistance to change, budget constraints and integration concerns. Despite these challenges, 50% of legal operations professionals will be primarily focused on legal technology in the next year, according to Consero Corporate Legal Operations Report 2018.

Building a business use case:

“Despite increasing understanding about the potential of technologies for legal department use, overall investment remains low — an average of only 2% of legal department budgets,” says Vidhya Balasubramanian, practice leader at Gartner. “As expectations and investments grow, Legal must ensure a return on technology investments, primarily by driving adoption.”

Source: https://www.gartner.com/smarterwithgartner/a-roadmap-for-technology-adoption-in-legal/


When it comes to convincing the board of adopting a tech-based solution, a list of benefits is not enough for turning it into a business case. The GC needs to explain the tangible results and improvements that will take place in the department regarding their workflows and activities.

 

An estimated 80% of business to business transactions are underpinned by legally binding contracts and agreements. And it has been observed that the total value of supplier contracts can be as much as 20% of the total cost base for an organisation. Without an efficient contract management strategy, enterprises are always at the risk of financial as well as vendor loss. Implementing robust contract management software can enable the GCs to have a clear visibility on the risks associated with each contract and allow a complete overview of the total value of the contracts on the business. With an integrated and scalable contract lifecycle management software in place can bring significant cost saving on the contracts which can translate into a substantial improvement in the bottom-line.


In-house counsels typically deal with numerous drafts and contracts on a routine basis and run the risk of human errors and duplication. For example, implementing a contract management solution will allow them to create new contracts from the standard or pre-defined templates, saving time and error in drafting and managing the contracts. The platform also enables to save all the contracts in a central repository on secure cloud storage which makes storing various documents and contracts much easier, and also makes sharing and editing online convenient.


Without a central repository, it will not only be difficult for the legal department to view various contracts spread across all the departments but can also lead to missed contract deadlines, impacting towards a loss of various vendors, suppliers and ultimately business. While every department has the knowledge of their own contracts and its monetary value, it can be difficult for the legal department to monitor and estimate the total monetary value of all the contracts within the organisation.


Typically, negotiations on a contract from several departments and numerous approval levels take place on emails which can often lead to multiple versions of the same contract without a proper track of all the changes made. Implementing contract lifecycle management software empowers legal departments to not only compare numerous copies of the same contract on a single platform, but also keep a trail of every change made to the document and store the multiple copies securely in a centralized repository.


Legal with a contract automation software is able to view the no. of contracts and requests that the enterprise have, and the status of each contract whether they are stuck in negotiations or approved, how many are active and renewals/expiration of each contract, various types and templates generated and overall financial impact of contracts on the company.


A robust contract management solution will allow for a single source of truth enabling the in-house counsels to not only view the various contracts but also track key dates and obligations. It can manage the full lifecycle of a contract including drafting, vetting, renewals, terminations etc. on an intuitive dashboard that helps them understand/analyse all the data related to contracts, allowing for better and strategic decision making.


While an integrated contract management platform improves the efficiency and workflows of the entire contractual process, explaining how it will reduce the contract approval time and bring cost-efficiency to the department can bring your arguments to life.


With the growing interest of management in legal and compliance issues, the case of an improved and efficient legal system strengthens. Unlike any other department, legal rarely works in isolation. It’s collaboration with other departments such as finance, IT, sales requires them to be updated with various legal documents, risks, both contractual/compliance obligations etc. Managing these scattered data and documents spread across various departments can become difficult, thereby increasing the chances of errors and risks in staying updated and compliant with the contractual obligations.


Another area where legal departments lack control and visibility is risk and compliance monitoring. While legal departments are still recovering from the aftereffects of the 2008 crisis, they have comprehended the importance of placing an integrated regulatory and compliance solutions at the centre of legal risk management. Without a consolidated system, legal is susceptible to major regulatory and compliance risks. The impact of non-compliance is not limited to financial penalties but also laying reputational threat hanging over the enterprises which can lead to loss of business and more importantly losing the competitive edge.


Being stuck in the menial processes during compliance cycles leaves negligible time for strategic risk forecasting and planning. Agile in-house counsels are creating a risk-averse culture within their departments by automating the reporting and monitoring of compliance processes, enabling not just standardized risk reporting but also strategic risk assessment.
Apart from a CLM and CMS platform, another risk mitigating aspect for Legal departments is an integrated MMS platform. Risks arising from a missed contract deadline or a compliance breach can lead to a notice or litigation and without a proper system to manage the copious amount of cases; an enterprise can have huge financial and reputational loss, directly impacting the bottomline.


The case for implementing matter management software arises from assessing the current scenario where legal has been functioning on disparate systems to track, manage and report on each matter, lacking overall insight on legal spend, and having inefficient systems to collaborate with outside counsel, thereby draining time/resources and impending productivity of the legal department.


An integrated matter management software enables in-house counsels to create a central repository and engagement platform for all matters and track legal spending on various matters of the department. Apart from a centralized view on all the matters, the Matter Management Software also allows the legal department to generate on-demand reports; schedule emails based reports and create a heatmap based on risk impact and likelihood of matters.


As corporate legal departments are faced with increasing tax compliance requirements, advanced tax enforcement processes, and aggressive tax audits, they are also laden with the pressure of bringing value to the organization. With the ever growing crescendos of tax environment, in-house counsels are looking for innovative solutions for tax management and ways to avoid tax litigation.


The role of in-house counsels in litigation management has grown from mere advisor to enforcer and risk manager. Handling litigation cases entails evaluating the strength of the case, identifying document custodians, updating legal proceedings, reviewing/editing pleadings etc. And this is not a solitary function but a collaboration with internal as well as external resources which needs careful and updated coordination.


An integrated Matter Management Software with Compliance and Risk Management can help in increasing organizational efficiency as well as cost efficiency, for legal departments by automating time consuming manual processes and saving Business, Legal and operational integrity.


Making a strong business case for an Enterprise Legal Management platform encompassing key factors of the legal ecosystem is incomplete without defining a roadmap to meet the larger business and strategic goals of the organisation. As technology is bringing efficiency and accuracy in the legal departments, it is ultimately leading to augmenting the speed of business within the organisation. As pioneers of technological revolution, GCs need a solution that will align the pace of their legal service delivery with the strategic goals of the enterprise.

 

Source: 2018 State of Corporate Law Departments report

 

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