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How Law Departments Can Save Money with Technology

In today’s hectic business environment, law department leaders wear a lot of hats because they take on more responsibility and accountability to stakeholders in their organizations. To control costs and improve performance, law departments are starting to invest in technology to streamline internal reporting and budgeting processes.

With budget accuracy expectations increasing for law departments, effective management of budgets is a top priority. In fact, many law departments are expected to achieve 98 percent or higher in budget accuracy. Access to the right tools and technology allows leaders to efficiently access real-time data to support decision making, determine spending allocation and assist with future budget planning.

Matthew Gillis, vice president of product solutions and strategy for HBR Consulting, recently sat down with Inside Counsel to discuss tools law departments should implement to leverage data in the budgeting process.

Today, law department leaders today are asked to do much more than practice law, or even manage outside counsel. The general counsel or COO of the law department is asked to manage risk, oversee information governance, comply with an ever-changing patchwork of global governmental regulations, as well as represent the company in traditional legal work. Law department leaders in the Fortune 50 oversee vast departments with hundreds, if not thousands, of employees with budgets ranging from hundreds of millions to billions. They are asked to function as an advisor to the c-suite, and are accountable for managing budgets and headcount efficiently with a focus on predictability of spending.

According to the 2016 HBR Law Department Survey, the top three methods to manage increasing legal demands are 1) increasing the use of technology; 2) reengineering work processes; and 3) automation of routine tasks. All of these involve enhancements to process and technology. Expanding beyond technologies is considered foundational for all law departments, as 24 percent of survey respondents stated that they expected to purchase an analytics platform to gain actionable insight from the data they collect in their ELM solution. 

“Law departments are also deploying technology directly aimed at tasks performed by lawyers, such as document management systems and contract management systems, as well as pursuing predictive analytics across these repositories to control costs and improve law department performance,” explained Gillis. “While it is still gaining traction, many law departments have turned to alternative service providers for high volume and routine tasks, such as document and contract review, achieving significant savings over more traditional internal or outside counsel resources.”

Generally, the technologies that law departments are purchasing provide visibility into activities and costs to allow for data-driven decision making, driven by the clear focus on predictability of spending. Since law department leaders are being held to the same standards as c-level executives, effective and predictable management of budgets, a long-standing expectation for other functions in successful businesses, are also the expectation for the law department. 

“While some legal matters are harder to predict than others, focused management of expenses against budget can avoid surprise variances,” he said. “The financial discipline of effective budgeting is increasingly not just requested, but expected, from both the law department and outside counsel law firms.”

Per Gillis, the tools that law departments should implement to leverage data in the budgeting process are analytics and data discovery platforms that can look across all components of legal spend, as well as identify drivers of increased spend. “Ultimately, law departments should implement solutions that can turn disparate data into actionable insight.”

Contributing Author

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Amanda Ciccatelli

Amanda G. Ciccatelli is a Freelance Journalist for InsideCounsel, where she covers intellectual property, legal technology, patent litigation, cybersecurity, innovation, and more. She earned a B.A....

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