Although there are many ways to calculate the return on investment (ROI), it’s important to consider what’s relevant for the particular technology you intend to acquire. Ben Weinberger, lawyer, technologist, and business advisor, says that calculating ROI starts with determining the goal. “There are a number of ways to measure ROI, but not all of them may be appropriate or even valid for each technology acquisition. Chief Legal Officers (CLOs) first need to understand what their goals are for a particular product – is it meant to reduce the time spent on delivering the same volume of work? Is it needed to expedite a time-sensitive process?” For more information, check our article on law firm and technology during COVID crisis.
Once you’ve determined the goal of the proposed technology solution, you want to consider what other factors have an impact on ROI.
Check out also our article about the role of KPI in calculating the ROI.
Consider how your legal department currently operates, and what tasks your team is responsible for. What routine tasks do you carry out currently? What tasks can legal technology automate? How easy is it for users to get accustomed to the new solution? When you decide to invest in legal technology it’s important to consider how easy the solution is to implement. While more complex solutions may offer several benefits to the legal department, if it’s considered too “disruptive” to your current processes, you’ll have a hard time gaining user adoption. The same goes for legal technology that is not scalable or requires considerable downtime for configuration each time you scale up. Keep in mind that it might take several months, or even a year, before you notice any considerable changes in convenience as it takes time for users to get accustomed to working with the tool. To learn more, check out also our article about legal technology trends and legal department’s workforce.
How long does it take you to get things done now and how long will it take to get the same task done with the technology solution? What tasks will you be able to complete faster?
Corporate legal departments have been grappling with the “more with less” challenge in recent years. They have to manage an increasing workload, caused partly by complex regulations, which has meant they struggle to keep up with the growth of the rest of the business. In other words, the “more with less” challenge means legal departments are handling an increasing workload with the same, or fewer, resources. How will legal technology help you manage a heavy workload and get things done?
What is the cost of doing nothing? What is the financial impact and the impact on staff morale if you continue to work the way you always have? Ben points out that costs are rarely just about the costs of the technology itself. “They need to know implementation costs, ongoing and future costs, timeframe for implementation, and what level of effort and involvement from their own team it will require – in learning to use the system, loading data or content into it, and, in the case of most “AI” tools being sold today, the time to train it.”
Now that you know what the important factors of calculating ROI are, it’s time to consider which factors are important for determining the ROI of your legal technology and how you plan to measure them. Download the whitepaper, "Proving the return on investment of legal technology" and learn how to demonstrate the value of legal technology to stakeholders and benefit from productivity and efficiency gains.