How Tech Helps Teams Persist Amid In-House Legal Budget Cuts
In-House Legal Budget Cuts and the Benefits of Legal Technology
Over the last five years, while working at three legal tech companies and supporting hundreds of corporate legal departments, one cloud has quietly loomed over all my client conversations:
Business executives seem to view legal department budget cuts as the inevitable solution to an astonishing array of challenges.
Over the long term, I see it as my mission to help clients dismantle this misguided perception and underscore the overwhelming value a well-resourced legal department can deliver. In order to do that, however, I first need to help clients develop pragmatic solutions that prove their ability to “do more with less” over the short term.
None of this is easy. And I wish in-house legal teams never had to confront this kind of adversity in the first place. But for those determined to do great work despite the obstacles, I’ve consistently seen the benefits of legal technology offer two telling advantages.
Bringing Automation to Inefficient Operations
Some tasks will always need doing regardless of the resources currently available. You can’t ignore outside counsel invoices, sit on sales contracts, or postpone litigation prep just because times are tight.
But within much of the work that can’t (and shouldn’t) be avoided lie plenty of elements that can (and should) be automated.
That’s no longer a bold assertion, either. Any corporate legal department that’s adopted an eBilling system, contract lifecycle management solution, or eDiscovery platform implicitly agrees.
They’ve seen the benefits of legal technology, and assigned their chosen software a select set of tasks that they know it can execute exponentially faster than a human administrator (e.g. verifying billing guideline compliance, tracking contract milestones, tagging relevant emails, etc.).
And by doing so, they can recover a significant amount of time for their legal department staffers to reinvest in the creative and strategic work where humans are ultimately most impactful.
Start Small, But Start Early
I’m always careful to remind my clients that automation is not an all-or-none proposition—and neither are its benefits. Start with the few tasks you’re most comfortable automating and you’ll be surprised how quickly small efficiencies compound into serious time savings.
But I’ll also challenge hesitant clients if required.
Because the truth is applying some degree of automation is the only sustainable way to move beyond the “do more with less” treadmill. And I want more legal departments to choose this path proactively—before budget cuts go deep enough to force their hand.
Bringing Data to Difficult Conversations
If these time savings were the only result you delivered, that would still easily justify the subscription price.
I’ve heard a version of this comment from clients many times over the years—and I’m always excited when I do.
It’s exciting for them, of course, to feel less stress and more control over their daily agendas. But it’s exciting for me because it means they now have the bandwidth to exploit a second and more surprising advantage.
Gaining New Insights into Resource Usage
The real innovation of legal operations software, in my opinion, is its ability to bring objectivity and transparency to conversations where both were traditionally scarce.
In any cost-conscious operating environment, the first big conversation to anticipate is an accounting of where resources are currently flowing. Strong analytics tools can help legal departments supply fast and unequivocal answers to questions like:
- What’s driving business demand for legal services?
- Which work is allocated to in-house lawyers vs. outside counsel?
- How is legal spend distributed by matter and by law firm?
How Data Can Help Inform Strategy
The data surfaced from those initial inquiries can then offer unbiased evidence to guide more contentious conversations, such as:
- What work could be scaled back without incurring unacceptable legal risks?
- Which internal matter leads need to employ more proactive cost control tactics?
- Where would we see the biggest upside from successfully negotiating AFAs?
Once legal department leaders start arriving in the boardroom with data-backed suggestions, stubborn business dynamics are suddenly ripe for change.
Fellow executives gradually recognize the GC’s stature as an equal voice in the company’s top strategic debates. And, in time, a proven GC can confidently lead their colleagues toward the most transformative conversation of all:
What business value does the organization risk losing by insisting on continued legal department budget cuts?
Recommended Resources on the Benefits of Legal Technology
Even when the software itself is designed to generate cost savings, we understand that the benefits of legal technology alone are sometimes not enough to secure budget approval and make the investment.
That’s why, in our latest guide, we’ve compiled the top arguments Brightflag customers use to successfully win buy-in from business executives.
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