Legal tech is just part of a robust legal transformation strategy

Amidst the drive for efficiencies, this puts the emphasis on developing a legal transformation strategy built around people and process change – as well as ever-improving legal tech, such as generative AI.

This may go against the natural instinct of many lawyers who pursue perfection in what they do – including from their legal technology stack. But focussing on the data, processes, tech and people needed to create a high performing legal team will help the legal function support their business in responding to the challenges they are facing – now and in the future.

What’s driving change in legal?

Budgets are flat or decreasing, headcounts are flat or decreasing, and it is very difficult to hire. Legal teams showed remarkable agility through the Covid-19 pandemic but they are now struggling to manage mounting workloads and pressure.

There are reports that some GCs are not confident in their department’s ability to manage regulatory change, and concerns that teams are taking on too much low value work.

The market for legal tech has exploded but we are seeing slower adoption than we might have anticipated given the pressure on efficiency.

The legal tech environment

There are incremental gains being made, especially around self-service, e-billing, contract lifecycle management and matter management, but we are not seeing many stringing the legal stack together themselves. Solutions developed by enterprise tech providers like Microsoft and SAP are being used to bolt on functionality to support legal.

In the months ahead, we expect to see a continuing shift towards the use of software in a work context that is commonly used by people outside of work.

It was a surprise to some that AI has gripped so many users in the way that it has, but with OpenAI giving access to anyone, it should come as no surprise that people have grabbed hold of its capabilities. AI is not hype and generative AI will play a major role in our industry. Goldman Sachs predicts that 44% of legal tasks can be automated and legal operations teams in sophisticated legal buyers have responded, making sure that AI is carefully and ethically explored and implemented.

For sophisticated buyers, expect to see document management, knowledge management and legal research being the fields most impacted by AI in the medium term.

Is everyone using legal tech already?

Given the availability of legal tech, legal tech adoption has been slow in many businesses. In-house buyers are diverse in terms of the pace at which they are keen or able to modernise.

At one end of the spectrum, we are still seeing high demand for people-based resourcing solutions, with some focused on the lawyers they can see and trust within their teams, supported by external counsel where they identify a need to access specialist advice.

At the other end are those in-house teams who are laser focused on right-sourcing legal work. They consider people, processes and tech, blending internal capability with support from a range of external providers.

The majority of teams in between are working on legal transformation and even the most sophisticated buyers of legal services are in a state of continuous improvement, finding new and better ways to get things done as people solutions and technology evolves.

There is not a single tech solution to fix all problems at once.  

Focus on transformation, not just on tech

In the short term, the focus for many will be on how legal enables business outcomes. Broadly speaking, this means getting a good understanding of business need now and in the future, and then considering the shape of a legal team required to support it.

A programme of incremental, considered change will create successful legal teams for the future.

To achieve this, many GCs will be very focused on the strategic vision of their business and their team. By taking time to look hard at the work the team needs to do, the data available to support decisions, the people, processes and technology, GCs will be able to create the ideal blended model.

The goal should not just be to “buy tech to make legal cheaper”. To focus on tech without a strategy to support it could result in bad processes being baked in, a poor user experience for disengaged business units, and an unsuccessful launch.

The goal should be to make sure legal work is completed by the appropriate resource, every time. A range of legal professionals and technology will play a part here to do good work, maximise efficiency and create resource agility as demands on legal fluctuate.