The whole in-house legal industry is facing unprecedented stress levels fueled by an impending sense of urgency. Over the past few months, legal departments have dealt with uncertainty surrounding their teams, increased workload and complex work to support their businesses and stakeholders.

Almost counterintuitively, there has never been a better moment to think about creating a digital strategy to drive transformation. It is the message brought forward by Shay Ogunsanya, manager for UK and Ireland at Wolters Kluwer, a global information services provider. The former legal counsel for the Dutch-Cypriot Chamber of Commerce hosted a roundtable during The Lawyer’s In-House Counsel as Business Partner conference, held last month.

In the first quarters of the year, most companies are planning their budget. He told an audience of in-house lawyers across various industries that a digital strategy can help focus resources on platforms and systems that can streamline operations and drive money and time savings. “In a context of crisis, be aware of rushed investments and decisions,” he said.

His confidence stemmed from The Legal Departments in a Digital Era report by Wolters Kluwer and the European Company Lawyers Association, which is based on a survey of over 380 legal departments. The survey sought to understand the progress legal departments have made in becoming digitally mature, as well as the challenges lawyers face when implementing tools.

The report’s results were rosier than expected. Close to half (47 per cent) of legal departments surveyed said they had started implementing a digital strategy. This exercise entails outlining how an organisation can leverage tech to improve outcomes and gain competitive advantage. “The crucial component is the creation and implementation of a roadmap,” Ogunsanya told participants. Around 33 percent percent of those surveyed said they still had no clear strategy, an uncomfortable position to be in at a time when CFOs are slashing legal spend and requiring a rationalisation of resources.

Shay Ogunsanya

During the roundtable, several attendees acknowledged they still don’t have a digital strategy. One legal counsel said the tech is there, but it is hard to find the time for more coordinated efforts. “We have contract review systems and self-help portals, but we tend to work on these ideas when we have time. We would like to put more effort and investment into it,” she said.

Those with a digital strategy found it useful to make plans with the wider business rather than focusing only on their legal teams. “You can look at it inward, but our own strategy was more oriented outward; so much of it depends on the vision of your CEO,” the head of legal of a fintech company said, adding that the roadmap was part of a broad five-year transformation project.

Without a budget to implement it, there is no digital strategy.  The report found that only 36 per cent of European legal departments had ring-fenced specific cash injections. Justifying the need for a budget is easier with a clear plan on development and rollout of specific projects and tools, while also listing goals and milestones. “Having a clear plan provides a better outcome,” Ogunsanya said.

One head of legal at a challenger bank recounted his experience of implementing a contract database tool and a financial data analytics platform. He found it useful to draft a strategy that made clear what the benefits would be for the whole company, rather than just for the legal function. “What we use in our team needs to have a direct impact on the business,” he said. “If you implement new tech and go out to the business and say it interacts with other functions, you avoid the perception of it as a black box that slow things down.” Legal tech can end up being in a silo if the business does not know which benefits it is getting from it.

To better drive implementation and harmonise new solutions with rest of the business, the roundtable host continued, it is important to rely on a so-called digital framework. “A good place to start is knowing if your company objectives are really aligned with the legal department,” he explained. A solid framework relies on three imperatives: know your stakeholder’s objectives; know your team, including their core responsibilities, resources and organic growth plans; and identify your “squeaky wheel”, hurdles common to all the business’ functions. When you map out a strategy based on these three elements, it is easier to define achievable outcomes.

Usually the outcomes can be reached through a combination of people, processes and technology. Assigning the right tasks to the right people, designing ways to deliver quick wins and concocting solutions that might include software or new platforms are all steps of the journey. Many strategies’ failures boil down to an over-reliance on the third part of the equation. “Tech should not be the end goal. This idea comes from a misalignment between what people want from tech and what it can really deliver,” Ogunsanya explained.

An attendee said he used this kind of reasoning when he introduced bots used by the rest of the business to search answers to frequently asked questions. “Lawyers often asks similar things with common themes, so we have drafted a playbook and provided a  place to self-serve before involving legal,” he explained.

This kind of solution satisfies what Ogunsanya described as the “three Rs” — coming up with something “real”, a measurable objective against a set budget; “realistic”, meaning achievable in a specific time span; and “reachable” enough. These factors make up the return on investment needed to get people on board and garner the right resources. He suggested appointing an internal sponsor within the team to promote the digital strategy and involving the IT department for any data processes that might be involved in the project.

One legal head opened up about her own experience during the conversation. Had she included these factors more carefully in a recent digital transformation project, she acknowledged, the whole initiative would have been less painful. “Since we could rely only on limited amounts of money, we should have figured out better ways to get the attention of our stakeholders,” she said, saying that her demands often got lost in internal competitions for budget with other units. She said she would have spent more time and effort in making it resonate with the rest of the business. “Doing a bit of marketing for this type of initiatives is important,” she concluded.

Sponsor’s comment Wolters Kluwer:

There’s a disconnect between the need for a digital strategy and the likelihood of developing a clear plan. Without a specific timeline or milestones,  you’re likely to end up with the wrong technology, or create a digital strategy that doesn’t fit the projected needs of the department  When implemented successfully, a digital strategy leads to the creation of a roadmap. A clear roadmap prevents you from making impulse buys and helps focus your resources.

There is a sense of awareness – even a sense of urgency – about the need to change the current ways of approaching legal work. However, many legal departments are struggling with this simply because they are so buried in the workload of the current operating model. There isn’t enough time to focus on improvements. Legal departments must develop successful strategies for improving their machinery and developing along with the rest of the enterprise.

Before you can develop your digital strategy you need to zoom out and examine your current situation. What pain points do you need to address and what do you want to accomplish? If your digital strategy aligns with the company’s overall strategy it’s much easier for you to make the business case. This step is often overlooked because there’s a tendency to consider the tools first and not the need.

It may be tempting to solve everything at once, but this approach is likely to fail given the enormous change required. Once you’ve prioritised the issues your digital strategy will address you can build on the initial success. Ultimately, your digital strategy should create lasting change. Investments that address long-term needs are most beneficial.

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