Small but growing legal departments often find it difficult to gauge exactly when to invest in technology. Technology adoption can be time-consuming and costly, so adopting new tools too early can waste valuable resources.
But waiting until problems get out of control can become endlessly costly. Here are some key signs that it’s time to invest in technology, such as workflow systems and artificial intelligence (AI): Modern systems enable in-house counsel to better support the business, increase efficiency and save costs. If you’re comfortable with these systems, Legal Technology Roadmap Solve your business’ biggest problems first.
1. The invoice review and approval process is confusing
If you find yourself prioritizing invoice payments based on which law firms are calling you the most, it may be time to implement an electronic invoicing system that will help you review, approve, and send invoices to your accounts payable department.
Electronic invoicing and expense management systems not only keep your accounts payable process running smoothly, they also help you ensure invoice compliance by flagging and automatically enforcing billing guidelines, helping you control costs but often overlooking them when the invoices start arriving.
2. You’re having trouble getting your finance department paid.
If your finance department requires month-end accruals, obtaining accruals from law firms and tracking accrual figures can become a burden as the list of law firms your legal department does business with expands.
If you find yourself spending more and more time calling law firms asking about case numbers and the tracking mechanisms are becoming unwieldy, it may be time to implement a case management and electronic billing system. These systems allow you to automate the accrual process and automate funding.
3. I want my legal questions answered quickly
Businesses often need immediate legal advice from their legal department. When they have to contact a law firm to investigate, it is often difficult or impossible to get a quick answer.
Tools like Practical Law and Westlaw Precision’s AI-assisted research provide fast, comprehensive answers to sensitive legal questions, allowing you to quickly gain insight into new areas of law or get expert advice on fact patterns and legal issues without having to engage outside counsel.
Advances in generative AI are putting critical expertise at lawyers’ fingertips, which they can use to provide more strategic advice to businesses and manage spend more effectively.
4. Not understanding legal expenses
This is probably the most basic number a legal department needs to track. If you’re a smaller firm, you could probably track expenses on a spreadsheet. Often, small legal departments don’t track expenses at all.
If you’re a small startup, this may work for a while, but as your company begins to grow, you’ll soon be asked questions like how much your legal department spent on outside counsel, how much you spent on specific matter types (litigation, intellectual property, transactions, etc.), how that spending compares to last year, and what you’re doing to keep legal costs down.
Once you have more than a few firms working for your company and legal fees exceed hundreds of thousands of dollars, it’s time to put in place a system to track invoices and expenses and provide guidance on benchmarking timekeeper fees to help you manage expenses.
5. It takes too long to find contracts
“Give me all of your distributor agreements, which have restrictions on assignment and transfer, and all of your service agreements, which have certain warranty and contractual clauses. Oh, and I also think I have a contract from two years ago that has a heavily negotiated section about international distribution, so I’d like that too.”
Does this request scare you? Contracts are a part of every business. You may store your contracts on a shared drive or in a document management system, but can you search them effectively? Or will you have to perform keyword searches in basic folders and open dozens of documents to satisfy this request?
Every contract likely has expiration and renewal dates to track. If your volume of contracts is growing, making requests like the ones above takes a lot of time, and keeping track of expiration and renewal dates is becoming a hassle, it might be time to consider contract management software.
6. You need to demonstrate the value of your department
When it comes time to cut costs, cost centers are usually the first to feel the pain, and whether we like it or not, legal departments are considered cost centers within a company. Cost centers need to demonstrate their value to avoid cuts being made.
For legal departments, that means demonstrating: Spending within budget,Staff workload Metricsthe percentage of total legal department costs as a percentage of company revenue, invoice savings, litigation risk, how the legal department is reducing claims, and how they are controlling legal costs.
Determining legal spend by case type and business unit can help you identify problem areas within your company where a surprising amount of legal spend is occurring. You can then use that data to develop a plan to reduce that spend. Your management team will appreciate this strategic approach to the budget.
You can use this data to justify hiring a new in-house counsel when legal costs for certain case types reach a certain level. A system that can track cases and legal costs and generate reports like this is critical to demonstrating value. When you start getting asked, “What has the legal department done for me lately?” — or better yet, when you anticipate such a question coming — it’s time to consider such technology.
7. You don’t know everything your law firm is currently working on
Knowing what legal matters your law firm is working on is critical to managing your risk and legal portfolio. If your department’s legal work has grown to the point where you can’t produce a list of every litigation matter your firm has open, every contract negotiation in progress, or every transaction and lawsuit for the past 12 months within 24 hours of a request, it’s time to consider matter management software.
8. IP portfolios expand beyond spreadsheets
Some businesses tend to handle a lot of intellectual property and have a lot of documents related to patents, trademarks, and other intellectual property assets. If a trademark is registered in multiple countries, it can be difficult to keep track of the registration dates. Understanding and having quick access to your entire intellectual property portfolio is crucial to managing these assets.
If you find it difficult to manage the documents, IP workflows, and deadlines associated with your IP portfolio, consider implementing IP management software.
9. It’s hard to meet deadlines
All dates related to legal matters are crucial. For example, companies need to know when contracts are up for renewal. They also need to know deadlines for submitting testimony and documents.
Once a legal department begins receiving a certain amount of legal matter, it becomes increasingly difficult to track these dates and stay on the same page with outside counsel.
- Case management software allows you to see all upcoming deadlines in one place and also allows you to collaborate with outside counsel.
- Contract management software tracks contract terms and renewal dates, allowing you to monitor and ensure compliance. These systems also analyze terms based on trends and outliers, so you can check for consistency or specific areas of risk.
With these systems in place, they can provide a single view of each deal or contract, ensuring all parties involved are on the same page.
When tracking deadlines becomes a chore and you start to feel like you have to constantly check in with outside counsel and business partners to make sure you’re on the same page, it’s time to consider case management and contract management software.
10. I’m surprised
Nobody likes surprises in business, whether it be the outcome of a case, a significant change to a case, or the cost of a case. Using electronic billing and case management software can help reduce surprises.
The software allows you to track maximum and minimum litigation exposure, expected outcomes, and more. This information allows legal departments to keep key stakeholders informed of potential risks and avoid embarrassing surprises.
You can request regular status reports from your law firm to ensure your legal department is fully aware of how cases are progressing, and you can track case costs and budgets so you can address issues before they become cost overruns.
If you’re worried (or you’re already worried) that you don’t know everything that’s going on with your case and that unexpected surprises will occur, it might be time to consider an electronic billing and case management system.
Top 10 Conclusions
As the business and legal department grow, Technology needs also growlManaging projects across multiple systems, manually reviewing invoices, and relying on outside counsel for advice on new areas of law becomes unsustainable.
If these top 10 factors resonate with you, it may be time to upgrade your legal department’s technology. Get started with Legal Tracker Advanced from Thomson Reuters.
TThis top 10 article is taken from a Corporate Counsel Association white paper and is not intended as a definitive statement on the subject matter covered. Rather, it is intended to serve as a tool to provide practical advice and reference material to busy in-house practitioners and other readers.
