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A Guide to Enacting Legal Digital Transformation

Legal digital transformation encompasses the adoption of digital tools and technologies aimed at streamlining workflows, improving productivity, and reducing costs for in-house teams.

Digital transformation helps corporate legal departments streamline internal processes and drive better outcomes for their business. By understanding both the opportunities and obstacles of digital transformation, in-house legal professionals can navigate this transformative journey. And they can feel empowered to strategically use technology to enhance their department’s performance and achieve their business objectives.

What is Legal Digital Transformation?

Legal digital transformation encompasses the integration of digital technology into all facets of a legal department, marking a shift from manual processes to digital solutions. This includes automating workflows, improving data management, and enhancing decision-making processes to increase efficiency, reduce costs, and improve the accuracy and accessibility of information.

In recent years, the importance of digital transformation in the legal department has grown significantly.

Corporate demands for legal services have grown as the number and variety of regulations that apply to businesses in the digital world increase. At the same time, business expectations have shifted toward faster turnaround times while expecting legal costs and in-house staffing to remain low, further driving the need for digitalization.

Additionally, the shift to remote work has underscored the necessity for digital document management and collaboration tools to maintain productivity.

Why In-House Teams Should Embrace Legal Digital Transformation

Legal ops professionals play a crucial role in advocating for digital transformation.

By demonstrating the benefits of digital transformation to the wider in-house team, such as improved efficiency, cost savings, and enhanced decision-making, they can effectively alleviate concerns and encourage acceptance of new technologies within the legal department.

Efficiency

Efficiency gains are a key advantage of legal digital transformation. By using technology, time-consuming and repetitive tasks can now be automated, freeing in-house team members up to do more strategic legal work.

For instance, automating the invoice review process streamlines invoicing and eliminates this administrative task from your in-house attorneys’ to-do lists, meaning they can spend more time providing legal advice and resolving matters.

Lorna Khemraz, Lead Counsel at Legal OS, shares how AI can help free up time for in-house teams

Additionally, centralized repositories for paperwork enable easy access to essential documents, enhancing collaboration and reducing the time spent searching for information. Legal technology solutions can help legal departments with workflow optimization and allow them to spend more time focussing on their strategic initiatives.

Unlocked Data

Legal teams increasingly need to rely on data to drive informed decision-making. Robust data analysis enables legal departments to identify cost-saving opportunities and allocate resources more effectively. However, extracting and utilizing this data presents significant challenges.

Legal data often resides in isolated systems, and may be in unstructured formats that cannot be mined for meaningful analysis.

Legal matter management tools like Brightflag offer a solution by centralizing and analyzing data. This helps provide insights into trends and opportunities for optimization in real-time. In addition, new technology like AI can turn unstructured data, such as invoice data that lives on PDFs, into useful data to drive analysis.

Through centralized data management and advanced analytics, legal departments can unlock the full potential of their insights for data-driven, strategic decision-making and enhance operational efficiency.

Cost Management

Digital transformation helps enhance cost management within corporate legal departments. With the help of artificial intelligence, organizations streamline invoice review. They also ensure each outside counsel engagement follows their billing guidelines.

This automation ensures the in-house team only pays for work that drives value for their business. It also guarantees that precious dollars from the legal budget do not go towards items that should be part of the firm’s overhead, like administrative and training time.

Organizations that centralize billing information also enable real-time tracking of legal spend, facilitating the identification of spending trends and cost drivers. Moreover, predictive analytics empower teams to set and adjust budgets based on historical data, proactively addressing potential overruns.

Using data insights, legal teams can make informed decisions about vendor engagement, renegotiate terms, and optimize costs by consolidating work with top-performing firms. Automated processes further enhance efficiency, allowing professionals to focus on high-value activities, ultimately driving cost savings and improving overall financial performance.

Enhanced Compliance

Legal departments use digital tools to ensure important actions are centrally tracked and auditable, enhancing compliance with relevant regulations.

For example, for U.S. companies, approving invoices in a legal spend management solution ensures each action within the approval workflow is clearly tracked. This helps ease Sarbanes-Oxley (SOX) compliance. If the in-house team needs to provide information for an internal or external audit, clear event tracking within their digital tools and easy reporting functionality ensure they can quickly fulfill the auditor’s requirements.

4 Aspects Of In-House Work Ripe For Legal Digital Transformation

There are several facets of in-house legal work that are primed for digital transformation. Embracing digital tools not only revolutionizes how legal departments operate but also improves efficiency and effectiveness.

  1. Legal spend management: Digitizing legal spend management is paramount for optimizing costs and increasing efficiency. By using digital tools, organizations can automate invoice processing, review, and approval and ensure adherence to billing guidelines. This enables real-time tracking of legal expenditures and facilitates budget monitoring. It also empowers data-driven decision-making to optimize legal spend.
  2. Matter management: Centralizing matter management processes streamlines workflows and enhances collaboration among legal teams. Digital matter management platforms provide a centralized repository for matter information. This enables efficient task assignment, document storage, and progress tracking. It also fosters transparency, improves efficiency, and ensures better resource allocation across matters.
  3. Contract management: Digital contract management solutions streamline the entire contract lifecycle, from creation to renewal. By automating contract creation, approval workflows, and renewal processes, organizations can improve efficiency, minimize risks. They can also ensure compliance with contractual obligations. Advanced features such as contract analytics and intelligent search capabilities further enhance visibility into contract portfolios. This enables proactive risk management and strategic decision-making.
  4. Knowledge management: This allows organizations to capture, organize, and disseminate legal knowledge and expertise effectively. Legal resources, precedents, and best practices are centralized. This allows legal teams to access relevant information quickly, facilitate knowledge sharing, and enhance decision-making. Advanced search functionalities and collaboration tools further enhance knowledge accessibility and promote continuous learning and improvement within the legal department.

How To Bring Legal Digital Transformation To Your Department

Implementing legal digital transformation requires a strategic approach. Consider the following steps to get you started:

  1. Communication: Establish clear communication channels for sharing information about the digital transformation initiative amongst your team and stakeholders.
  2. Culture change: Sell people on the vision, showing them how the changes will improve their day-to-day. Use change management techniques to identify detractors and get them to buy into the adoption journey.
  3. Technology assessment: Conduct a thorough assessment of existing technology infrastructure within the department. Identify any gaps or areas for improvement that can be tackled by your transformation process.
  4. Measurement of improvements: Define key performance indicators (KPIs) to measure the success of your digital transformation efforts. This could include efficiency gains, cost savings, enhanced customer experience, and improved compliance.

Navigate Legal Digital Transformation with Brightflag

By embracing digital transformation, legal professionals can focus on strategic tasks and deliver better outcomes.

Book a demo today and discover how Brightflag can revolutionize your legal operations, empowering you to navigate the complexities of legal spend management with confidence and ease.

Alex Kelly

Chief Operating Officer & Co-Founder at Brightflag

Alex co-founded Brightflag after spending more than six years at Matheson, Ireland’s largest law firm, in its financial institutions group. A legal technology thought leader, Alex is a frequent speaker at legal operations conferences on topics related to legal innovation and legal transformation.