Enterprise Legal Management Needs to Grow Up

To justify the bold assertion of this article’s subtitle, it is first necessary to understand how today’s traditional enterprise legal management (ELM) systems were born.

The ELM market as it exists today can be traced back to 1978, when Equitable Life’s law department saw the potential for their new WANG VS word processing system to do more. It could be used to manage the details of each legal matter, details regarding outside counsel, and many other things that Equitable Life needed to monitor about their day-to-day legal operations.

Matter Management

Partnering with CompInfo, Equitable developed a matter management system that ultimately became a product called Corporate LawPack. Over the next two decades, Corporate LawPack was ported to a variety of hardware and software platforms, leading to its eventual adoption by the legal departments of many Fortune 100 companies, as well as within many governmental and financial institutions.

The 1980s through the mid-1990s saw the broad adoption of matter management software, designed to facilitate the administration of corporate legal practices. These solutions, while providing a robust matter database, did not affect lawyers or law department efficiency. Primarily, they served as reporting tools.

These databases required a tremendous amount of data to be manually entered if it was expected to drive any meaningful value. For this reason, these systems were not widely used by lawyers themselves and instead relied heavily on support staff to operate.

Spend Management

In the mid-1990s to the early years of the 2000s, matter management’s twin sister, legal spend management, made its entrance — driven, in great part, by DuPont’s implementation of the DuPont Legal Model in 1992. DuPont helped embed the notion that focusing on partnering with outside counsel and managing the rich data provided on legal invoices would lead to significant operational efficiencies and reduced legal spend. This led to the Uniform Task Based Management System (UTBMS) initiative and spawned the new class of spend management software.

Legal spend management systems gave clients visibility into the details of what law firms were billing and it became the primary means of exercising more control over how matters were managed by outside counsel. This transparency initiated a shift in the way legal business is conducted that continues today, with clients having more power to require alternative fee arrangements, enforce billing guidelines, affect cost reduction.

The Beginning of the End

The inevitable followed: spend and matter management provided by different vendors required costly and complex integrations. Customers found themselves managing one vendor relationship for matter management and another for spend management. Ultimately, a number of spend management vendors were acquired by matter management vendors or vice-versa, along with the development of spend management capabilities being built into existing matter management systems.

In either case, the new integrated matter and spend management systems created even more complexity and even steeper learning curves. So much time figuring out how to build an integrated matter and spend management platform was invested during this period that innovation — particularly around the user experience and actual legal department work process — essentially stalled.

When coupled with migrating their platforms from multiple operating systems, databases and supporting the introduction of cloud-based or Software as a Service (SaaS) platforms and other more agile technologies, vendors now find themselves struggling under the weight of their legacy technologies with little focus on real innovation in supporting the broader notion of legal operations and process management. Customers wrestle with software built upon a decades old concept that ELM is essentially a database problem.

But what if that is only half of the equation?

According to Gartner, that’s exactly the case: ELM is no longer just about matter and spend management. In addition to the responsibility of managing documents, e-billing, matters and outside counsel, it’s equally important for corporate legal departments to be involved in business processes themselves.

Gartner states: “In an enterprise legal management context, BPM [business process management] includes the automation of manual processes through methods such as workflow and collaboration functionality. Examples of these include the distribution and approval of legal documents, assignment of tasks and legal resources, as well as the monitoring of alternative fee agreements.”

These are roles that existing ELM vendors were neither built nor prepared for.

Learn more about the modern solutions to ELM stagnation in our next blog post (hint: it’s SaaS)! Or get the full story now from our free white paper.