What is a contract management software, and why is it important?
While small Legal functions might get by using emails, templates and spreadsheets, this approach doesn’t cut it for companies looking to grow.Read the article
This article is a summary of a recent roundtable discussion @ the Australian Corporate Counsel, Victoria
When done right, Legal can be a competitive advantage for any organisation! I strongly believe that.
Contracts lock in and secure ‘value’ for organisations - if you can optimise and expedite contracting processes, you’ll support the business in generating more revenue and will soon be viewed as a strategic business partner.
Improving and expediting contracting processes for your business is an aspirational (yet very achievable) goal for a sole legal counsel or small legal teams which will drive huge ROI.
Take a look at this useful resource which summarises the new imperative for Legal teams - Driving Competitive Advantage.
In this article, we cover:
● how to build a Legal function that is viewed as a strategic business partner (without
budget for legal tech or other initiatives);
● how to secure budget for technology-driven initiatives; and
● once secured, what to do with that budget?!
We work with Legal teams of all shapes and sizes. Large organisations are often fortunate to have different lawyers specialising in different areas, whereas smaller businesses are often reliant on one or two generalist powerhouses working across a diverse range of areas.
No matter the size, it is well documented that Legal teams are experiencing increasing workloads/expectations, yet stagnant or decreasing budgets. And while it’s a problem for everyone, we often see it’s the smaller teams that seem to be drowning the most.
But you don’t need big budgets to improve how legal work gets done. Even if there is no budget, Legal teams can have a huge impact on the business by implementing a few changes:
We regularly speak with GCs who say they've tried to introduce legal initiatives, but failed because they couldn’t get the budget…
Often this is the result of the GCs taking the wrong approach e.g. focusing on legal needs, as opposed to the impact on the broader business, and we touch on that later in this eBook.
We find these GCs often run into the same roadblocks: Legal isn’t viewed as a priority or Legal could not clearly articulate its value to the wider business. Despite a heavy reliance on Legal, the function is not viewed as a strategic asset to the business. That perception needs to change!
If you have no budget for tech or other initiatives, the first step in any successful Legal transformation strategy is to work with what you’ve got.
Here are 5 practical tips to help position Legal as a strategic business partner (and free up your capacity to add more value!):
Every department should have a set of objectives and a purpose that aligns with the broader objectives of the business, and Legal is no exception.
Use these objectives to define a very clear policy on what work you should be doing to achieve these objectives, and what work you should NOT be doing (and then empower the business to do the latter - more on this below).
Legal leaders should work with managers and Execs to gain a deeper understanding of what the business is trying to achieve, and align Legal to support those strategic objectives.
Every other department in your business has KPIs, and it’s important that Legal isn’t left behind. How can you improve or demonstrate value, if you don’t measure it? Keep the following in mind:
For example: What is the purpose of Legal? Expectations and objectives should be well defined and will change from organisation to organisation. The Exec will likely not know how to answer that question, and the answer isn’t simply to manage risk! This is your opportunity to define Legal’s value proposition, measure it and achieve it. That will make securing a budget for tech and other initiatives in the future a lot easier!
This should be documented and defined to easily articulate the value of Legal.
Have a look at this eBook on ‘How to measure the performance of your legal function’ - it sets out very useful tips to measure the performance and impact of your legal function.
What is acceptable and what is not acceptable risk? If the business is operating within clearly-defined risk parameters, they should be empowered to complete the task themselves and self-serve without Legal involvement.
Defining and standardising processes is an important step towards transforming your legal function. For example: How does a contract flow from creation, internal collaboration and approval, to negotiation, signing, storage and tracking post-signing milestones? Can you improve the process? What are the bottlenecks? Can they be removed?
Here are some quick wins:
This may seem like a lot of work to set up, but the long term ROI will be huge. And when you find yourself in a position to secure a budget, implementing technology to support standardised and well defined processes will set you up for success!
You’ve completed steps 1-3, now it’s time to empower and encourage the business to self-serve and make certain decisions without Legal involvement.
This approach should be supported by your managers and the Exec. The business can then operate at record speeds with the support of FAQs, rules of engagement, templates, fall back positions and more. If all else fails, the business has clearly defined parameters and guidelines about when to involve Legal.
Once you have implemented steps 1-4, invest time in training the business - it will build trust and pay dividends in the long run! Training can take many forms, including videos, webinars and in-person sessions. But it’s important to remember that training is an ongoing process. Continuing to encourage business users to utilize the processes and systems the legal team has developed will entrench efficiencies and create a positive culture in the long-run.
Having achieved big wins using the 5 steps above, securing budget for the next phase of transformation should be a lot easier! After all, the perception of the Legal function should now have changed -and imagine what the impact will be with tech?! It’s a no brainer!
To secure a budget, you must have well-defined problems that impact the business broadly and align with organisation-wide strategy.
Get alignment with your manager or the Exec on the size of the problem (using metrics where possible). If the problem is properly articulated as affecting the entire business, the budget for the solution should follow naturally.
Many GCs fail at this first hurdle. They try to get sign-off for a tech-solution before getting alignment on the problem first (or the size of the problem)...and in most scenarios, the business didn't even know there was a problem!
When you’re ready to build your business case, it’s critical that you draw attention to how the inefficiencies impact the broader business - what is the cost and impact of ‘now’?! Remember - Legal done right is a competitive advantage, not a bottleneck, but solving Legal problems alone doesn’t always secure the budget. Solving business-wide problems via a legal tech solution is a different story!
Almost every CFO will initially push back on an initiative that requires additional spend - that’s their job! It’s on you to demonstrate how the initiative will save the business time and money. The vendors you’re working with should help with ROI metrics and should be held accountable to that business case.
For more useful tips on securing budget for legal transformation initiatives, read our eBook: 10 Tips For Securing Budget For In-House Legal Tech
Congratulations! You’ve secured budget for your legal transformation project.
You’ve proved that your Legal function is there to drive competitive advantage and now the next (and most important) step is to spend your money wisely!
Before you go spending, get clear on your requirements, areas of greatest need, and the potential impact/ROI of a solution. Be sure to partner with a vendor that can support your entire roadmap, not just one feature.
Although most GCs rate implementing technology as their top priority, unfortunately many fail at the first hurdle. - Here’s a useful resource setting out the top 10 pitfalls to avoid - A General Counsel’s Guide: Digital Transformation.
With such a wide range of tools available, it’s important to understand where to begin based on the needs of your business and Legal team.
When considering how Legal technology could help you, start with identifying where the greatest pain is and work from there. Work through a set of desired capabilities – areas that require/have greatest opportunity for improvement – and prioritise the capabilities based on the needs of your organisation and potential ROI. This eBook provides some great insights on that approach: The Legal Technology Shopping List
Finally, technology isn't always the answer. Consider the work that is currently outsourced to law firms. Could you bring that work in-house and leverage strategic secondments to ensure your resourcing fluctuates with the team’s workload? In turn, you will save on external counsel fees, which can be redistributed to other Legal initiatives.
It’s also worth considering low cost, tech-enabled legal service providers and productised legal services that specialise in specific areas of law. These options may be perfectly suited to the high-frequency legal work that you find yourself caught up in, and are typically a fraction of the cost of a traditional law firm.
No matter what stage of the legal transformation journey you are in, there is always progress to be made.
Reflect on your company’s overall goals and objectives and identify how Legal can have more of a strategic impact.
Realign your daily operations to focus on the highest value tasks, and empower your business to manage low-risk activities themselves.
It might appear daunting, but hundreds of functions have found success by following this approach.
It’s a really exciting time to have a huge impact as in-house lawyers! I’m looking forward to seeing this approach leading to many more lawyers ‘having a strategic seat at the table!’
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A General Counsel's guide to modernising their legal function.
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