Times are changing, and they are changing fast. The ongoing COVID-19 pandemic has transformed the possibilities in how corporate lawyers, like many other professions, can efficiently work and provide value to the organisation. However, are all these changes reflected in legal departments’ digital budgets?
Almost one-quarter of legal departments saw an increase in digital budget
According to the report, Legal Departments on the Move, by Wolters Kluwer and the European Company Lawyers Association, 23% of legal departments saw an increase in their digital budget. It should be made clear that these increases should be seen as permanent, and not as an ad hoc increase in spending that helped legal departments cope during the initial stages of the pandemic.
Of those that saw an increase in digital budgets, 20% have budgets below €25.000, 30% have budgets ranging between €25.000 to €100.000, 9% have budgets between €100.000 to €250.000, and 5% of legal departments have budgets above €250.000. 36% do not have a specific digital budget set, even though they can attest that their actual budget is higher than it was prior to the pandemic.
In this article, we explore how the legal department can make the business case for digital budgets, and hence, get the budget they need for legal technology investments.
Identify your squeaky wheel
The first step is identifying your pain points because it will help your stakeholders understand why it’s important for the legal department to address this particular pain point. Some examples of pain points include incurring costs associated with missing deadlines, losing deals because it takes weeks to get sign-off, and being unable to respond efficiently to requests from the business regarding contracts. The key here is to specify how your pain point is affecting the business at every level. You can build a much stronger case for your legal technology investment when you have numbers to support it.
Set metrics and KPIs
Stakeholders, especially the CFO, want proof that the digital budget will be put to good use. You need to be able to demonstrate how you’ll measure whether you’re achieving a return on investment (ROI).
How can you ensure your digital budget delivers ROI? Make sure that it’s centred around the impact on the business or outcome, and not only on what the legal department needs. The truth is, business leaders, care most about the impact on the bottom line. For more tips on calculating ROI, check out our whitepaper on how to prove the ROI of your legal technology investment.
The role of the general counsel
The general counsel plays a dual role in ensuring stakeholder buy-in for the digital budget. The general counsel has to make sure there is buy-in among the legal team. On the other hand, the general counsel needs to make sure there’s support among business leaders for the digital budget, otherwise it will be difficult to achieve the objectives on the legal department’s roadmap. Our article on making the business case for contract management software offers suggestions for winning stakeholder approval.