According to a study from Eversheds Sutherland, securing a legal tech budget is the greatest challenge GCs face when trying to harness technology to raise efficiency. In fact, 64% of GCs report that getting budget is the biggest hurdle they face when trying to improve their tech use, followed by difficulties with integration and lack of time.
7 tips for getting your legal tech budget approved
While most GCs know that technology can help them achieve improvements in efficiency, access to information, mobility and connectivity, their inability to translate needs into budget approval is holding many back. To get budget approval for legal software, GCs need to be able to show how technology can help achieve the business’ strategic goals.
Here are some practical tips for making the case and overcoming common challenges of securing approval for your legal software request:
1. Demystify your needs by explaining your pain points
Software can help digitise (or virtualise) many work processes – from document storage to workflow management – however communicating benefits alone won’t help you convince your CFO to invest in technology.
When making the case for spending on legal software it’s important to go beyond software benefits to explain how specific and significant improvements can be made.
Take information storage and retrieval for example. Technology can be used to establish a central location for all legal documents, which can help you ensure you have an accurate, up-to-date overview at all times. Explaining how this benefit can help you in a specific task – like preparing for an audit – can help demystify your needs and better illustrate the pain points you encounter in your daily work.
Another example is file sharing. The ability to securely share files with third parties could be a great benefit of cloud-based legal software, but explaining how it can shorten contracts approval times or result in cost-savings for delivering documents for due diligence proceedings can bring your arguments to life.
By sharing specific use cases with decision-makers, GCs can create consensus around pain points and explain how software bring improvements.
2. Don’t downplay the benefits to the wider business
Technology can increase efficiency in your legal department, but it can also improve how you work with other business units, like sales, accounting and IT. Benefits like improved communications, collaboration, consistency of work and data security are goals that span across the business – so don’t downplay them
Involve stakeholders at in the process of selecting software, from initial needs assessment to product evaluation to ensure that their requirements are also being considered. For example, when it comes to data security IT may have specific requisites that suppliers need to meet. By gaining buy-in from other departments early-on you can demonstrate that a majority of the business agrees that an investment in a specific technology is worthwhile.
3. Tackle the implementation issues early
Every legal department in every business has a unique way of working, and software should be help you increase productivity without having to necessarily change the way you work. Implementation issues – like those around configuration or migration – can be barriers to getting approval, since they can involve additional costs, training or downtime.
To avoid delays in getting approval, be sure to demonstrate how a solution can be up and running quickly and outline any additional investment that may need to be made to take full advantage of the software.
4. Address the digital skills gap
In the same GC survey, 51% of GCs reported that they find it hard to decide which technologies to invest in, whilst 33% state that a lack of digital skills in the team is a challenge when trying to harness technology. Not only does this suggest that the lack of digital skills in many legal departments is holding back tech adoption, but also in innovation.
When making the case for legal software, it’s important to address the barriers that the legal department (and the rest of the business) may need to overcome to take full advantage digital tech. For example, automating workflows can help achieve efficiency, but staff will also need to develop skills to use or create templates or assign tasks. Otherwise the true promise of software will not be met, and it may be difficult to justify continued spending in digitalisation.
5. Align your request to strategy (& your CFO’s vision)
Likely the most important tip in this list is the need to align your tech budget request to the wider business strategy. By positioning your request as a “legal only” issue, you reduce the importance that technology has on your ability to play a strategic role in the business.
To make a strong case for spending, link your request to specific strategic goals that are important to your CEO and CFO. These may include goals to:
- Improve work consistency
- Cut costs
- Meet data security requirement
- Enhance customer service
- Grow market share
- Increase competitiveness
- Expand internal collaboration
- Automate business processes
- Optimise investments and mitigate risk
- Business continuity
Also, since IT purchases can be costly, planning when your spending will occur can make the difference. Aligning spending with the CFO and calendar will buy you points since it shows your considerations of cash-flow and operational planning.
6. Switch the conversation from cost to investment
Finding a way to measure future value and expected ROI can help you make the case for new technology. For example, time saved in generating reports or preparing for due diligence can be translated into cost-savings, while accelerating contract negotiations and renewals thanks to standard workflows can help boost revenues.
However, if demonstrating ROI through cost savings or boosting revenues is difficult, you may want to demonstrate the cost of doing nothing. By estimating the costs of wasted time, lost opportunities and risk, like data loss or fines for non-compliance you can show that the investment in software will pay for itself over time.
Furthermore, you can also use qualitative approaches to show the potential difference that software can make, like past events and informal feedback from other colleagues. For example, showing how an automated alert on an IP registration deadline could have helped avoid a recent late fee can give context to your request.
7. Pick a solution that fits the scale of your business
With so many legal tech solutions out there it can be difficult to find the right software to meet the needs of your small legal department. On top of that, many systems that focus on automating processes or tasks for larger in-house teams require complex integrations with other vertical systems, like CRM or accounting software. This can make a software purchases much too complicated and costly for small legal departments, and therefore an unrealistic request.
The key to picking the right software is to identify the scope of your needs and work with a solution provider that can tailor the set-up according to your requirements. For many GCs, a simple cloud-based solution to store, analyse, manage and report on their legal information (vs. legal tasks) can be the perfect answer.
Follow these tips and demonstrate to the entire business how technology can help address not only legal department needs but also achieve the business’s strategic goals.