Small but growing legal departments often struggle to determine exactly when it‘s time for them to invest in technology for their legal department. There can be significant personnel hours and costs associated with adopting legal tech solutions, so getting automation tools too soon can waste these precious resources. However, waiting until it‘s too late and problems have grown out of control can be infinitely more costly. Below is some practical advice for when it may be time for a legal department to invest in technology that allows its lawyers to serve their clients better, become more efficient, and save money.
1. Your invoice review and approval process is chaotic
If you‘re finding yourself working out which invoices need to be paid by which law firm is calling the most, you probably need an spend management system to help review, approve, and send the invoices to your accounts payable department. Keeping your relationships with your law firms strong is one reason to not make them be the “squeaky wheel” to get paid. Another is that it is highly inefficient to have to track down invoices every time the law firms call wondering where their payment is. These types of systems also allow you to flag and enforce your billing guidelines automatically, something that will help control costs and that tends to get missed when the invoices start coming in thick and fast. If bills are only being paid to the squeaky wheel, you don‘t know where a given invoice is at a given time, or your invoice volume has become so heavy you‘re no longer properly reviewing invoices and enforcing billing guidelines, it’s time to get an spend management system.
2. You’re struggling with getting accruals to the finance department
This one is fairly straightforward. If your finance department is requiring month-end accruals, getting those accruals from your law firms and tracking the accruals numbers can become burdensome as the list of law firms your legal department works with grows. If you find yourself spending more and more time calling your law firms asking for accrual numbers and your tracking mechanism is becoming unwieldy, it may make sense to get a matter and spend management system. This will allow you to automate the process, preventing invoices being submitted before the accrual numbers are in, and automatically get the reports sent to finance.
3. You need quick answers to legal questions
Businesses often need quick legal advice on the fly from their legal department. Getting them a fast answer is often difficult to impossible if you need to research the issue first or contact your law firms to do the research for you. ______________________________________________________________________________
A tool like Practical Law allows you to be more efficient with these requests, getting up to speed quickly on new matters and areas of law to either give an answer directly or clearly instruct outside firms on the details you need.
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If the volume of requests of one-off queries and similar urgent matters from the business is taking time you need to spend on more strategic legal work, now is the moment to consider this type of automated service.
4. You don’t know your legal spend
This is perhaps the most basic number that legal departments need to track. If you‘re in a smaller company, perhaps you‘ve been able to track spending on a spreadsheet. More often than not, small teams don‘t track spending at all. This may work for a time if you’re a start-up, but if your company‘s growing, you‘ll soon be asked about how much the legal department has spent on outside counsel overall, how much you‘ve spent on certain matter types (litigation, IP, transactional, etc.), how that spend compares to last year, and what are you doing to control legal costs.
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Once you have more than a few firms doing work for your company and your legal costs have risen past a few hundred thousand pounds, there’s a solid argument for deploying tech tools to track your invoices and spend, using a tool like Legal Tracker.
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5. You spend an inordinate amount of time looking for contracts
“Give me all of the distributor contracts that have restrictions on assignability and transferability along with all service contracts with certain warranties and covenants. Oh, and I think there‘s a contract from two years ago with a heavily negotiated section on overseas distribution, I‘d like that too.” Does that request give you shivers? Contracts are a part of every business. Traditionally, legal departments (and law firms) tended to have vast filing cabinets containing all their contracts. Such a request above would entail pulling out each of these contracts and searching through them looking for the appropriate information. These contracts are likely to have expiration or renewal dates associated with them as well that must be tracked.
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If your contract volume has reached a point where a request like the above would entail spending an enormous of time and effort tracking expiration/renewal dates, it may be worth looking into contract management software like HighQ.
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6. You need to demonstrate your department’s value
When costs need to be cut (and with a recession looming and wages rising, the possibility cannot be discounted), cost centres are usually the first to feel the pain. Whether you like it or not, the legal department is viewed as a cost centre within your business. As such, you need to demonstrate its value to keep cuts at bay. That means evidencing things such as spend to budget, staff workload metrics, total legal department cost as a percentage of company revenue, invoice savings, litigation exposure, how the department is reducing claims, and how you’re controlling legal costs.
Segmenting legal spend by matter type and business unit can help red-flag problem areas in the company that are incurring a surprising amount of legal costs so the legal department can develop a plan to reduce that spend (which can then be shown to superiors). This data can also be used to justify hiring new in-house counsel when expenditure on specific matter types reach a certain level. Systems that track matters and legal spend and that can automatically generate these types of reports are invaluable in showing value. When you start getting “what has the legal department done for me lately” questions, or better yet, when you anticipate those questions are coming, consider implementing such technology.
7. You don’t know all the matters that your law firms are working on at a given time
Knowing the legal matters being worked on by your law firms is crucial to being able to manage risk and oversee your legal portfolio properly. If the legal work in your department has grown to the point where you can‘t produce a list of all the ongoing litigation matters for your company, or all of the active contract negotiations, or all of the transactions and litigation from the last twelve months, within twenty-four hours of a request, then matter management software can help automate the process.
8. You’re having trouble keeping track of deadlines
All dates associated with legal matters are vitally important; for example, contract renewals, depositions, and filings that are due. Once a legal department has a certain number of legal matters underway at once, keeping track of all these dates and making sure you’re on the same page as outside counsel becomes more and more difficult. When you start feeling like tracking deadlines is taking up too much time and you‘re constantly having to check in with your external counsel, matter management software could be the answer.
Matter management software shows you and your external counsel all your upcoming deadlines and information about a matter in one place and allows you to collaborate together.
So there’s no reason to email or call to confirm dates, and no need to search through emails looking for that filing deadline. There is no question whether you and your outside counsel are on the same page, because you‘re working in the same place.
9. You’re getting surprised
Nobody likes to be caught off guard, whether it is the outcome of a matter, a material change in a matter, or the cost of a matter. The risk of getting a nasty shock can be reduced by using spend and matter management software, which can track maximum and minimum litigation exposure, along with the likely outcome. This automated process allows the legal department to keep key stakeholders apprised of potential risks and avoid embarrassing surprises. Regular status reports can be required of law firms to make sure that everything that‘s going on is being communicated to the legal department. Costs and budgets can be tracked so conversations about cost overruns can be had before the end of the matter. If you feel like you don‘t know everything that‘s going on in your matters and suspect you are vulnerable to unwelcome surprises (or you have already had one), a spend and matter management system could be the option for you.
10. You’re still handling contracts the way you did ten years ago
You’ve invested a lot of time and energy over the years, developing your legal capabilities so you can be a trusted business advisor. So why are you still wasting your time on the same low-value tasks you did 10 or 20 years ago?
It’s not unusual for in-house counsel to spend all day drafting or reviewing documents – or equally unproductive time chasing updates on contract status. Many of the tasks associated with this are so tedious, you must hire very expensive outside counsel for less complex work. You know your team is perfectly capable of accomplishing these projects. But you don’t have the time to do them the way you work today.
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Thomson Reuters Document Intelligence uses artificial intelligence to reduce or eliminate very expensive and tedious document drafting and review tasks so you can spend more time providing strategic advice faster, better and cheaper.
