As the current macroeconomic climate puts pressure on businesses, there isn’t time to wait on delays or holdups — creating a growing demand for speed and agility from Legal. Here’s why efficiency matters more than ever for legal departments, and how to execute sizable gains for yours.
Efficiency is a currency of inestimable worth — one with even more value in this uncertain economic era. As corporate legal departments face immense pressure to handle an increasing volume of matters, faster execution has become critical for risk mitigation, competitive advantage, and revenue generation.
In fact, the 2023 Enterprise Legal Reputation (ELR) Report uncovered a growing demand for more speed, agility, and efficiency from Legal, especially from go-to-market teams striving to meet sales and pipeline numbers. With deal cycles lengthening and earnings projections being more deeply scrutinized, sales and marketing teams are feeling the gravity — to the tune of a 30% and 27% drop, respectively, in positive interactions with Legal since the inaugural ELR Report last year.
But time is money, and there simply isn’t time for businesses to wait on lengthy support for deals — not when that might mean money is left on the table at a time when both revenue acquisition and EBITDA matter exponentially.
Efficiency: Legal’s Essential Link to the Business
For the second year in a row, three in five (59%) non-legal practitioners do not consider Legal particularly efficient. For myriad reasons, respondents call out the department’s lack of operational efficiency: overall, many view Legal as a “bottleneck.” Those in the United Kingdom note Legal as “adding unnecessary roadblocks.” In Germany, corporate employees report they “simply expect to experience holdups” interacting with Legal.
That said, of those who do rate Legal as efficient, nine in 10 (91%) believe Legal shines in its handling of sales and revenue cycles — proof positive that Legal’s effect on materiality is real. However, an equal percentage (91%) of legal professionals admit to being acutely aware they are being bypassed by their internal clients, at least on occasion.
It is Legal’s duty and very nature as protector of the business to be cautious and to examine the crucial details of every contract or deal. But Legal also has the power to grow the business in every capacity if it can strike a balance between process and speed.
That factor is efficiency.
3 Ways to Fast-Track Efficiency
When asked how their legal department could best support them during the current economic climate, enterprise employees reported a wish list that mirrors the people, process, and technology (PPT) framework created to magnify efficiency: better communication and collaboration (43%), streamlined processes (22%), and accelerated due dates (13%).
1. Enhancing communication among people.
According to the ELR Report, two in three (65%) employees do not find Legal responsive enough. Of course, legal service requests (LSRs) can be unpredictable; some may take just hours, while others do require weeks, even months. Clients do understand this variability. Yet they also express a profound desire to remain regularly informed about status and updates.
The most sophisticated enterprise legal management (ELM) platforms, which have matured from systems of record to systems of engagement, now act as a single source of truth. In turn, this constant shared connection provides a distinct anchor to the enterprise, a deeper awareness of the “exactly who is working on precisely what,” and more seamless collaboration on initiatives.
2. Utilizing spend management to upgrade process.
In reality, efficiency in business encompasses both operational efficiency, or the speed of matter execution important to internal clients, and cost efficiency, which executive boards must heed and account for, namely during economic crunches.
More than one in three (35%) legal respondents does not feel legal is very cost-efficient. With increased stress on legal departments to both hasten productivity and control costs, modern legal spend management solutions are a wise choice to tackle both speed and spend. E-billing automates business-critical workflows, offering visibility and consistency for how legal bills and budgets are processed. This permits legal departments to identify immediate cost-saving measures as well as to explore trends that lead to unparalleled data-driven insights for the future. Further, legal spend management dramatically reduces the time of administrative and compliance tasks, streamlining workflows and, thus, improving efficiency.
3. Embracing AI-enabled CLM technology.
One in five (21%) legal respondents overall, and one in four (24%) in the United States, spends six to eight hours daily on contracts. That’s nearly every hour of every workday spent on contracts alone. Moreover, more than eight in 10 (84%) say sales contracts usually take a month or longer to push through — and more than one in four (26%) sales contracts require three months or more.
Leaving little time left for other priorities, contract management propagates issues of responsiveness and inefficiency. Enter intelligent contract lifecycle management (CLM). Incorporating artificial intelligence (AI) to support the entire contract lifecycle, AI-based CLM reduces time spent on contracts and integrates with enterprise resource planning (ERP), customer relationship management (CRM), and supply chain management (SCM) systems to reduce the likelihood of inconsistencies, proving to shrink deal cycle times by up to 20% and speed time to revenue by 24%.
Accelerating Time to Material Success
“Efficiency is doing better what is already being done,” iconic management consultant Peter Drucker once said.
At a time when time itself is truly of the essence, Legal must listen deeply to their internal clients, streamline workflows, and adopt and invest in innovation to navigate the complex corporate landscape. In turn, the department will emerge as a more visible, strategic partner and indispensable business influencer that sparks faster execution and greater material impact.
Download the 2023 Enterprise Legal Reputation (ELR) Report today to discover how both corporate employees and legal professionals view their interactions and collaboration and ways in which Legal can evolve its relationships and brand image to impact revenue generation, growth, and operational efficiency more positively.
