As exponential growth of technology consumes the world, the legal industry is having to move fast to keep up.

The Lawyer and cloud-based document management solution Conga gathered seven in-house lawyers as part of The Lawyer In-house Financial Services conference to discuss legal automation transformation. The roundtable was moderated by Conga’s director of sales engineering for EMEA North Howard Wassall, and featured lawyers from within a range of businesses – from established banks to an anti-money laundering service and transport and logistics business.

Howard Wassall, Conga

The roundtable was an opportunity for the lawyers to explore their experiences with optimising existing processes and streamlining operations in order to increase efficiencies; the tools they have used to help mitigate risk and reduce cost; practices to report on key operational metrics and their department’s collaboration with cross-functional teams across the business.

What united the group was being on the brink of change, embarking on new platforms but tentatively testing the water.

Embracing automation

Most of the delegates dealt with the signing up of thousands of contracts a year, with one lawyer expressing her frustration that, until recently, everything was done in “very much an old-fashioned, manual way. We had a Word document stored in a folder, and with a bit of luck you are able to find it three years later,” she said. “Since January however, we have begun automating our contracts.”

Another delegate, who had been in her head of legal role for six months as the business’s first lawyer, empathised with the former’s situation, stating that she was in a similar position.

“In my previous role, I had a lot of experience with optimisation. In my current business, contracts are kept in a Sharepoint folder under alphabetical order – there are standard terms they sign but there are often special terms that are negotiated,” she explained. “I have no records of what the special terms are.”

Mergers are often catalysts for radical change. An associate general counsel (GC) from a business that had recently completed a combination with its sister company said that the transformation curve had introduced a new culture and way of doing things. As a result, he had been looking at software to integrate the teams and operate smarter. While his resources were continuing to be cut, he was using it as the opportunity to think about how to add more strategic value.

A pitfall that the lawyer had found himself grappling with nonetheless was legacy issues: “You have people that have spent 30 to 40 years working on one type of document who are reluctant to give it up.”

Gearing up for transformation

Some of the delegates had carried out legal effectiveness reviews to transform the way their teams work, but admitted they were wary about rushing into anything too fast. A large part of the struggle is also getting enough volume to justify the startup costs.

“We have a document management system now which we put in place in February,” a senior lawyer at a retail and commercial bank said. “However, one of the issues is if you are going to look at a whole new package you don’t want the first thing that comes along – you want to wait until it’s been tested.”

Having carried out the review, a GC said she had determined to outsource work after dividing it into three buckets.

“I looked at the type of work, which area of the business it is coming from and various complexity criteria such as price and how many countries it involved,” she said.

“The highest, most complex bucket was kept in-house, the medium bucket was outsourced, and the low bucket work was put into automated templates that procurement could use.”

On the outsourcing bucket, the lawyer said that she had a contractual agreement with EY as the provider, and a relationship manager overseeing all the work that went into this area.

“They’ve got good systems for looking at frequently negotiated clauses or frequently occurring work that you can then streamline even further,” she continued.

As part of the agreement, the lawyer had a repository her team could access if they wanted to look at the contracts, while they used EY’s office in the UK, as well as its outsourcing centre in India, so it could handle work across different jurisdictions.

“To keep on top of it you have to have someone dedicated to that relationship,” she added. “This involves monthly meetings and escalating meetings, looking at their management information systems (MIS) and service-level agreements (SLAs).”

The decision had resulted in cost savings for the lawyer, who explained that she kept a close eye on volumes then every year at the annual review, and had been able to drive cost down by telling EY the extra volumes they were going to receive. “There has been a year-on-year cost benefit. I drove them hard. If you have the MIS to back it up you have a strong argument.”

Change journey 

One of the challenges with outsourcing is managing relationships both in-house and with the external provider. The change journey from your own lawyers and procurement colleagues can be tricky to navigate – it requires selling the benefits to keep your colleagues involved in the process. As one delegate put it: “You have to tell them ‘you’re losing this chunk of work, but now you’re going to be doing something much more exciting’.”

The group were keen for there to be element of self-service, with the acknowledgement that contracts should not be too complex to allow people to help themselves.

“It’s important to continue to allow people to use the tools they’re most used to – the sales teams to carry on using their CRM platforms, the legal teams to carry on using Word and Outlook to interact with the platform, so it’s not a big bang for everyone,” said Wassall.

The group assessed how to demonstrate to the business that you need to spend money to save money, agreeing that it is important to look at the risk question – how many contracts have been litigated, how many times the lawyers have been hit by a financial penalty from a contract going wrong. You have to look at the cost risk analysis and make some tough decisions.

“If it amounts to none to fairly low, what is actually the risk in having the liability clause on a contract negotiated 58 times?” asked one of the lawyers. “Look very critically at which areas are the riskiest, and in the least risky areas, you can use a less belt-brace approach which will save you money.

“That approach has served me well over the last 15 years.”

Wassall asked the group whether collaboration across the business is an issue. “We hear of a lot of contracts being sent around internally just via email, which have to be manually followed up.”

One lawyer said that though she had provided an area of her business with templates and playbooks, with less pressure on the legal team, she felt that that the work had shifted. “It perhaps seems more efficient from our perspective because legal doesn’t have to do that work. But it isn’t gone, it’s just shifted.”

Keeping communications running

The longer the relationship and exchanges have taken place with the business, the more aligned legal and the business are. Remote working has had an impact on collaboration.

“It’s been more difficult in the last year because people can’t find their way to us. With a certain freedom to deal with things, they then make their own decisions. They may make with the best intentions but it’s not in line with legal,” shared one of the lawyers.

To conclude the conversation, the group discussed what to avoid doing. The general sense was to expect blunders along the way – if things don’t go a bit wrong, you’re not doing it right. Automation transformation is not plain sailing. Legal teams must be willing to make mistakes, but communication and being agile to get things done within a prompt time schedule are key.

“If you’ve said that change is going to happen, then it should happen relatively quickly,” according to one of the lawyers. “The pushback we get is that it is taking too long. Bringing people into the communication across the business is important.

“If you’re going to make a change be authoritative about it and then deal with everything else along the way.”