As detailed in the recent ELM Solutions whitepaper: Managing corporate legal costs in an unpredictable world, corporate legal departments (CLDs) are facing increasing challenges around legal cost control. The complexity of the work they are responsible for, along with inflation and volatility that make budget prediction difficult, have many CLDs looking for strategies to keep their legal spend in check.
The key to continuing success in legal spend management is to take an approach that is future-focused. Long-term spend management strategies can help address current challenges while keeping CLDs on track to continue meeting their business goals over time. Here are two core areas for departments to develop in support of long-term cost management.
Legal technology roadmap
Whatever your business goals are, you need to plan your technology investments accordingly. The strategic and broad, complex work that is performed by the legal function requires effective technology planning to meet evolving demands. Without a proper roadmap that aligns with and supports the company’s goals, the legal department is more likely to waste money on technologies that will not get used by your attorneys or operations team.
Creating a roadmap that aligns well with your corporate objectives and the needs of your team introduces opportunities for greater efficiency and better business outcomes. The right technology can help you create more accurate budget estimates for legal matters, accurately estimate matter resolution times and outcomes, and help your teams work smarter, faster, and more effectively.
Take these steps to begin the development of an effective legal technology roadmap:
- Identify problem areas that could benefit from technology-aided support or process improvement. An internal, cross-functional advisory board can help you understand where your greatest needs lie.
- Define technology investments that deliver value on business priorities. Inventory your current technology portfolio to assess which tools are being used to their full potential and gauge how users feel about what the tools do best and what they lack.
- Improve cross-functional buy-in by getting alignment on critical goals. Meet with leadership to ensure that the CLD's plan matches with corporate objectives. Their support will also be valuable in encouraging user adoption.
- Visualize and communicate the incremental steps necessary to reach long-term goals. Make sure that the department’s day-to-day users of technology understand the value of the changes you are planning for each phase of the roadmap.
Data-driven decision-making
All CLDs generate and use a considerable amount of data in the course of executing their legal workflows. Records about the legal department’s transactions, their open matters and matter history, the performance of their outside counsel, and many other facets of the department’s processes are captured by the systems they use to run their legal business. However, if this information is scattered across disparate tools and processes, then it cannot provide all of the benefits it has to offer.
Harnessing this data to improve decision-making is a critical step in the effort to optimize department performance and maximize value. Legal operations professionals should keep this guidance in mind when considering how to make use of their legal data:
- Leverage technology solutions designed to improve data quality to set the stage for better-informed decisions. Data must be reliable in order to achieve value in its analysis. Even one wrong decision based on inaccurate data can create legal and financial challenges.
- Reduce in-house counsel’s reliance on personal relationships by implementing data-driven outside counsel selection, rate negotiation processes, and reliable benchmarking practices. This also helps protect against potential loss of institutional knowledge with staff changes.
- Increase knowledge and documentation of alternative legal service provider (ALSP) capabilities, leveraging insights for improved rate negotiations. ALSPs are generally more affordable options for certain work and, as specialists, can be more effective in their specific areas of expertise.
- Define KPIs that signal critical red flags. Using these to build dashboards tailored to stakeholders can help quickly communicate performance against business goals and objectives.
For more on how CLDs can address the need to improve cost management without sacrificing legal department performance, download our free whitepaper: Managing corporate legal costs in an unpredictable world.
