Basic Legal Automation In Place: What's Next?

The Legal Department, like many other departments of an organization, has started to embrace technology in recent years. However, the journey towards a complete legal transformation has just started. It may not be wrong to state that what most legal departments have now is basic legal automation.

Basic legal automation could mean many things, but in this case, it simply refers to an early stage or minimum adoption of technology. This may involve the digitization and electronic storage of documents, identification of administrative tasks associated with documentation, and electronic management of one or two key legal portfolios like matters, contracts, compliances, etc. The primary objective in this phase is to implement systems that can have an immediate and direct impact on the productivity of the legal department without disrupting the current operations. Thus, basic legal automation is an introduction to automation.

What Has Been Achieved?
At this level, one of the primary goals of any automation exercise may become evident as time savings kick in, led by the advantage of faster processing. The organization may have witnessed the potential of cost savings, driven by savings on not just time, but the freeing of labor and person-hours for better utilization. For example – with digitized storage, finding the exact contract, case or document can be done in minutes, perhaps seconds. Some higher-level benefits may have also appearedas the error rates nose-dive and the visibility of documents and related metadata increases.

What Comes Next?
The next step in this journey is to spread the automation to the other sub-functions of the legal department and/or to increase the utilization of existing technologies.

If the legal team started with a central contract repository, the next course of action could be to upgrade the system to increase internal and external collaboration and easier contracting with deeper reporting. Alternatively, the legal team could also attempt to extend the same or similar technology to other functions of the legal team. In this case, the team may create a repository of all legal matters, including litigations and notices. Thereafter, the team can move on to the other subdomains – including corporate compliances, intellectual properties, legal entities, etc. The advantage of doing this is that the engine of the legal department – its knowledge, suffers minimum disruption during the automation process.

In some cases, it has been observed that the automation of contracts is the first choice for many organizations as contracts significantly impact the entire business ecosystem. With the emergence of contract-centric technology systems, the drafting and vetting of contracts have become much simpler and faster. Standardized clause and template libraries with a repository of all contracts and related terms not only helps the legal team but also improves business relationships.

While most teams start their journey by creating a centralized information repository across their key portfolios, the next stage is to improve collaboration among the various stakeholders. This could mean introducing systems that enable multi-party collaboration with minimal dependency on offline tools as improved collaboration directly reduces turnaround times and cycle times of various processes across the organization.

Some organizations may also want to consider the electronic management of their regulatory, statutory and internal compliances. There are rules and policies to be adhered to, which are subject to frequent alterations. The organization can choose to automate these compliance requirements, with status updates and reminders, to ensure auto-generation of reports and monitoring of timely filings. This lowers the risk of penalty and stoppages, streamlining the focus of business leaders where it should be – business operations.

Another option for organizations at this stage is to streamline the legal operations across multiple entities. This would normally include the automation of multiple intake processes, tasks, and tracking of legal spend for the legal function. It’s important for legal teams to organize the way business teams interact with legal and how legal intakes various requests, matters, contracts, etc. and distributes the work within the legal team and to external parties such as law firms while tracking the budget and spend.

The freeing up of resources from the allied structural and input level activities will automatically give the organization the free space to focus much higher on the value creation engine inside – a deeper of technology usage to generate key insights and unified analytics from multiple systems. Imagine the organization as a system – the structure is now firmly in place, with inputs to the system streamlined. The next step now would be to integrate all systems – linked by a centralized data and document repository.

Regardless of the path, an organization takes in their journey towards legal transformation, all roads lead to integration - integration of people, processes, and systems. With a technology-enabled repository, collaboration and operations, most organizations may have achieved integration of people and processes at this juncture. However, the integration of systems remains a challenge for most. Therefore, it’s prudent to plan for this early on and invest in systems that are integrated by default or are equipped to integrate with other systems when needed.

The integration of systems must be seen from distinct viewpoints; 1) creation of a unified legal ecosystem i.e., integration of all legal systems with each other that gives the organization a unified view of all risks, matters, contracts, intellectual properties, compliances, licenses, etc. across multiple entities; and, 2) integration of the unified legal ecosystem with the other enterprise applications including systems for managing clients, vendors, suppliers, partners, invoices, payments, documents, etc.

To sum it up, basic legal automation can provide, at best, a more streamlined data management, plus some base-level cost and time savings. The process improvements allured to above, the productivity enhancements only arise in a legal function that is automated end-to-end in a single integrated entity. And that is the logical step forward after basic automation, realizing and benefiting from the higher-level benefits, topped off by enhanced overall business visibility that leads the management to better decisions.