Five Steps Towards Legal Digitalization

Digitalization creates new business models. Uber provides mobility services without owning cars, thus displacing classical taxis. Airbnb offers private apartments for rent and thus creates competition for long-established hotel chains. All industry leaders must ask themselves if their traditional value propositions are still intact or if innovative players can use disruptive and networked technologies to push them out of the market.

This is also true for the legal industry, which, for decades, appeared to be immune to substantial changes caused by technology. While the core of legal services, i.e., the assessment of facts concerning the law, in most practice areas and cases, is still too complex to be executed by machines, this assessment of facts remains supported and surrounded by many operational activities such as document analysis, contracting and project management for which clients are no longer willing to pay high hourly lawyer rates.

The deconstruction of legal work has led to the standardization of high-volume and low-value tasks and the emergence of legal process outsourcers (LPO). In essence, corporate legal services today are in a situation like the one corporate information technology, financial, and human resource services were in some 30 years ago: Chief financial officers (CFO) now also expect in-house legal departments and law firms to use technology to deliver legal services better, faster, and at lower costs.

But legal departments often don’t know where to start with legal digital transformation. Often, they ask themselves questions such as: What differentiates legal technology projects from classic IT projects? Are legal departments per se a special/different audience? Do legal departments have the necessary funding? Can legal departments work/carry out the project in isolation?

This blog offers an overview of the basic steps to take in your legal technology journey.

STEPS FOR LEGAL TECHNOLOGY SUCCESS

1. Identify pain points. Don’t get tricked by all the exciting legal technology on the market. It’s critical to detail the pain points first so you can work out what the solution is. Example pain points are a high volume of trivial (legal) work, insufficient reporting capabilities, cumbersome admin tasks, and increased external legal spend.
2. Plan the budget. Work out the potential of the legal digital transformation project and create a business case. Costs at this stage will be rough, but you can make estimates and assumptions about benefits to calculate the potential ROI. (If high legal spend is a pain point, this guide to “Building a Business Case for Legal Spend Management” will help.)
3. Initiate the digital legal project. Develop a project and resource plan and assign team members and roles.
4. Consider the solutions. Define your requirements and evaluate build vs. buy (vs. do nothing) options. At this stage (when you have clear requirements), you should contact legal technology vendors. Ensure you include potential future users at some point during the solution review. This ensures the users have demoed the product you will consider their opinions. This will help with the adoption of legal technology after implementation.
5. Go live! Procure, install, and test the solution. Consider onboarding users in stages. Embrace failures and adjust accordingly for a successful full implementation.

These five steps are just five essential stages and only scratch the surface of how to approach a legal digital transformation project. For more detail on tackling each of the steps above and more steps, read our three-part series on seamless legal tech implementation or download the Right Legal Spend Management Solution Guide.