You have to spend money to make money

Building on the helpful tips from Group General Counsel Gavin Carney and Head of Legal Tanveen Singh, I wanted to share my tips with you about securing budget for legal technology

Have ROI at the centre of your pitch

Legal tech costs in isolation can seem grating to C‑suites and Boards, and difficult to sell in as incremental.

Enter ROI — Return on Investment — data.

For example, every extra minute a contract is stuck in an approval process is costing your business money.

Here’s a working example:

A real estate legal team approached Plexus seeking to improve their property leasing process through automation and process improvement.

Here’s how they justified their project:

* We can reduce headcount in the property team by an administrator, making a total saving of $80,000 per annum.

* We can reduce the reliance on external firms, saving $100,000 per annum.

These are good outcomes, but not particularly impactful to a CFO who deals with billions in revenue and a headcount of thousands.

When considering the impact on the broader business, it became clear that reducing the cycle time on leases from three months to one month means the company realises two months more revenue on every single lease.

Some other data points which may be additionally useful include framing legal tech cost as a percentage of total company revenue. All these data points should be central to any pitch. Get crisp on the facts and figures you know are going to resonate with your decision makers.

Most legal tech vendors can assist you with this process, together with legal operations consultants. They may have research data, or a spreadsheet that allows you to calculate how many hours across the business an existing manual process costs the business. Plus, a whole lot more.

Make your CIO one of the legal team’s biggest fans

As I write in my first e‑Book, Legally Innovative, IT is a necessary companion to any transformation journey.

It’s absolutely an advantage to have IT invested in your tech plans.

Regular catch ups and interactions with IT colleagues could lead to being granted access to ​“spare budget”, existing software licences as well as being able to tap into the latest tech innovation the IT team is exploring. Share your pain points and solutions ideas regularly. Keep the IT folks engaged in any transformation plan you have, including showcasing your top legal technology picks. Use the IT Team for pitch practice — if you can sell the idea into them, that’s a positive start.

Think of IT as the butter to your bread. Keep this relationship — and any access to the IT budget — nice and toasty.

Get your business case right

Whether or not you already have a line in your legal budget for investment in legal tech, or a legal operations department within your legal team, becoming proficient at writing business cases [in whatever format] is part of driving tech change successfully, and gaining access to investment dollars.

Here are some headings you may wish to include in your business case to help your hustle:

Outline the Problem

Outline the current manual problem you are trying to solve. Really understand your challenge or the problem you are trying to solve – the why! Try to solve a business challenge, not purely a legal team one. It’s preferable to be able to articulate the pain points as part of the problem preferably supported by data. To help accomplish this, start with analysing the ​“as is” and ​“to be” processes. Propose an internal working group or a legal lead to help the process, identifying gaps and what the end state should look like.

Outline the Solution

Set out the potential legal tech options [if there is more than one], and your preferred option. Cover off IT security and privacy requirements if that’s important to your audience. If it’s relevant to your stakeholders, document the tech vendor’s other current clients (sometimes knowing that companies in the same industry as yours are moving in this way helps the approval process).

Outline the Investment and ROI

What’s the investment cost, and as outlined in tip 2 above, the ROI. Address the question of ​“How will spending money make money” for the entire organisation, not just legal.

Outline the Implementation Roadmap and Timing

Include indicative timelines and milestones, and the human resources required. Describe what success looks like after X period of time eg. efficiency savings in the form of time as well as dollars. If possible, set baseline success metrics to show the before and after story – spending company or indeed shareholders’ money is serious business and there needs to be rigour about measuring progress.

Just as importantly, ensure that your tone and content is fact based, quantitatively sharp, and truly speaks to your business audience. Adopt similar terminology being used by your C‑suite — for example, if digitisation is the strategy buzz word of the year, then link your investment into legal tech to that business objective.

In other words, push your legal swag aside and let your influencer business hair down instead.

Remember, businesses know that you have to spend money to make money. Don’t be shy about leaning into this. The efficiency you create through legal technology is a symbol of the value you create as a legal function.