You may be forgiven for thinking that an article discussing the need for digital transformation could be slightly outdated. After all, we’re well into the third decade of digitisation. However, despite considerable discussion about, and acceptance of, the need for digital transformation within the corporate counsel environment, uncertainty remains about what technology to implement and how to adopt it. Digital transformation has failed to gain the same traction in the legal sector that it has in other industries. In part, this might result from there being little room for error within our sector; not exactly an encouraging environment for making considerable changes. Let’s face it, any transformation involves a certain level of disruption, leading to confusion and disarray. The pressure to digitise can be particularly acute for law firms. They often deal with companies that have long since been digitised, and these clients expect their counsel to match technology standards. Law firms that fail to digitise are often at a competitive disadvantage to their rivals, who have already gone through digital transformation. For corporate counsel, the momentum towards digitisation is predominantly internal. Today, companies are ever-increasingly reliant on data to quantify their output and inform decision-making. To accurately measure KPIs and estimate ROI, considerable data processing is required. Legal departments are not sheltered from the deluge of data needed for such quantification. Therefore, CLOs are becoming more allied to digital technologies. This article aims to provide insights into how to achieve an undisruptive digital transformation. By reading this article, you’ll understand the roadmap to help facilitate your firm’s or legal department’s smooth journey towards digitisation.
What’s Covered in this Article?
Although we’ve already mentioned digital transformation and acknowledged that it’s not something new, we accept that some readers may be new to the subject. Therefore, we’ll start with a brief explanation of what digital transformation is. Next, you’ll get an understanding of the things that drive digital transformation. This part of the article will include client experience, data analytics, legal department performance, compliance, and risk management. Having set the scene, we will present you with a roadmap towards digital transformation, including assessment, research, prioritising, delivery plans, and predicting budgets and resources. Finally, we’ll conclude with an argument for digital transformation being a process of evolution rather than revolution.
Digital Transformation; What Is It?
According to a Forbes article from 2020, digital transformation uses today’s legal technology as building blocks for constructing the legal departments of tomorrow. To be effective, there has to be a combination of these digital tools and proven technological expertise. Digital transformation may be a speedy process for departments such as Sales and Marketing. However, as corporate counsel, the pieces of this intricate puzzle must be put in place carefully and deliberately. Digitising a legal department is more complex than merely implementing various digital tools and technologies. It also requires a culture change within the department and in the way legal professionals approach legal cases. Therefore, it is crucial to have a roadmap in place to overcome the complications of digital transformation. The good news is there is plenty of experience of previous transformations available, so there is no need to reinvent the wheel.
Key Drivers of Digital Transformation
As with all changes in a corporate environment, budgetary considerations need to be dealt with. However, the financial aspects of digitisation are not the primary considerations for corporate counsel. In the legal setting, there are four key drivers of digital transformation: Client Experience Data Analytics Improved Legal Department Performance Compliance and Risk Management
Corporate counsel, and therefore the corporate legal department, work relatively sheltered from the external client pressures that law firms face. However, they still need to ensure that they are contributing to a satisfactory client experience.
For their single client, the business, digitising the legal department will generate reportable data. This information will benefit the business, meaning that every stage of digitisation strengthens the argument for the next step along the transformation roadmap.
Analysing the data generated through digital transformation doesn’t only benefit the wider business, but legal departments can use it too. Of course, measuring KPIs is an excellent means for the business to calculate how much value they’re getting from their legal department. Conversely, corporate counsel can utilise the same data to improve its processes and optimise operational performance.
As performance improves through digitisation, the next step of transformation is encouraged. You can highlight previously undiscovered efficiencies or stubborn bottlenecks overcome. These benefits mean that digital transformation can pay for itself, negating any budgetary concerns of undergoing the process.
Improved Legal Department Performance
There is a limit to the efficiencies that you can achieve through improving manual processes and operations. For instance, the maximum speed at which a human can do document review has probably already been reached.
Moreover, the speed and quality of these tasks are dependent on human and environmental factors such as concentration, distractions, etc. For document review and similar tasks, AI outperforms even the most skilled and experienced corporate lawyers in accuracy and speed.
Of course, it will come as no surprise to you that AI can perform repetitive tasks faster and more accurately than a human. However, digital transformation doesn’t mean that a corporate counsel’s role within the business becomes obsolete. On the contrary, freeing skilled legal professionals from mundane tasks allows them to focus on the more important legal aspects of the business. Therefore, the legal department will develop more efficient and faster processes and practices.
Compliance and Risk Management
Managing risk and compliance is the primary function of corporate counsel. However, much of the work involved in compliance consists of standardised checks. These are ideal tasks for AI, making this a perfect area to kick off a digital transformation.
In the area of risk management, corporate counsel can benefit from standardized contracts. Automating tasks such as privacy laws and legal holds using AI and other digital tools can reduce costs, time, and stress levels.
Roadmap Towards Digital Transformation
Following a proven roadmap can reduce the amount of disruption involved with digital transformation. There are several basic steps on the road to digitisation, including the following:
Your journey towards digital transformation starts by establishing a baseline. Assess what is currently in place, your short-term and long-term goals, and any issues preventing you from achieving these. Having conducted this assessment, you will be in an excellent position to move forward.
As mentioned earlier, digital transformation is not a new concept, and there is plenty of experience available from which you can benefit. Take a look at what digital innovations are working best for your partners and competitors. You can then adapt these ideas to develop your digital transformation solution.
When you’ve assessed and researched, it is time to prioritise. This step is crucial, as you are unlikely to transform every part of the department at once. Also, there’ll be more challenging aspects to change, and dealing with the more straightforward ones first could reduce such challenges. Therefore, setting priorities is a crucial stage of your digital transformation roadmap.
Delivery Plan Creation
As soon as you have prioritised you can create a plan for delivering and measuring your digital transformation. A clear plan will provide the legal department and wider business with a sense of security and stability during the change.
Budget & Resource Predictions
Predicting costs is the final stage of your roadmap. You should be realistic in your expectations and understand that digital transformation projects are prone to delays. Also, bear in mind that corporate counsel does not pause while you’re undergoing your transformation. Therefore, consider costs and resources for continued alignment with other departments, external suppliers, etc.
Digital Transformation; Evolution Not Revolution
By nature, corporate counsel is risk-averse, as this is their primary responsibility to the business. As such, they tend to focus on the risks associated with change rather than the potential benefits.
It doesn’t help that phrases like “cutting edge,” “revolutionary innovation,” and “disruptive technology” are associated with many digital solutions. The idea of implementing change with these is, understandably, far from attractive to many seasoned legal professionals.
However, digital transformation should be viewed more as an evolutionary process rather than a revolution. Most other business sectors have significantly benefited from the speed and efficiency offered by digitisation. Indeed, now it’s time for corporate counsel to undergo their digital transformation.