August 22, 2016
Growing legal departments often struggle to define when it’s time for them to invest in technology. Since there can be significant time and costs associated with adopting technology, getting the technology much too soon can waste these precious resources. However, waiting until it’s much too late can mean that problems have grown out of control, and implementing that technology and dealing with the problem can be infinitely more costly. Below find some common situations and practical advice for when it may be time for a legal department to invest in technology that allows its attorneys to serve their clients better, become more efficient, and save money.
- You don’t know your legal spend.This is perhaps the most basic number that legal departments need to keep track of. More often than not, smaller legal departments don’t track spending at all. This may work for a time if you’re a small start-up, but if your company’s growing, you’ll soon be asked about how much the legal department has spent on outside counsel, how much you’ve spent on certain matter types (litigation, IP, transactional, etc.), how does that spend compare to last year, and what are you doing to control legal costs.
- You need to show your department’s value.When it comes time to cut costs, cost centers are usually the first to feel the pain. And whether you like it or not, the legal department is viewed as a cost center within your business. Cost centers need to show their value to keep cuts from coming. For a legal department, that means showing 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. This data can also be used to justify hiring new in-house counsel when legal spend for specific matter types reach a certain level. Systems that track matters and legal spend, and that can generate these types of reports, are invaluable in showing value.
- You’re getting surprised.Nobody likes to get surprised, whether by the outcome of a matter, a material change in a matter, or the cost of a matter. Using ebilling and matter management software can reduce surprises. Maximum and minimum litigation exposure, along with the likely outcome, can be tracked, allowing the legal department to keep key stakeholders apprised of potential risks and avoid embarrassing surprises. Costs and budgets for matters can be tracked so conversations about cost overruns can be had before the end of the matter.
- You need quick answers to legal questions. Businesses often need quick legal advice on the fly from their legal department. Getting them a quick answer is often difficult to impossible if you need to research it first or contact your law firms to do the research for you. A tool like Practice Point allows you to type in a topic (“insider trading”) and instantly get back several articles discussing the topic in simple terms, along with checklists, sample policies, memos, and other materials. This can save time on research or the cost of contacting outside counsel. \
- You don’t know all of your matters 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 your legal portfolio. 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, then it’s time to consider matter management software.