The pandemic has undoubtedly accelerated the adoption of technology in several industries with the WFH model. However, in many cases, tech adoption has been limited to video conferencing and collaboration tools. A lot of businesses, including law firms, were conserving finances as no one knew how the pandemic would play out. Two years on, as we begin to see some sense of normalcy return, corporates are considering deeper investments in technology.
As are lawyers.
And if you are one of those lawyers, here are the top 5 things to think about when investing in a legal tech tool.
- Budget: Surprisingly, most lawyers don’t have a budget in mind when they start looking for technology solutions. Often that is because they don’t know how much tools cost and accordingly are unsure of how to budget for it.
I would recommend doing two things,- Conduct a quick Google search on the types of tools you are looking for. Sometimes, vendors will list pricing or at least the basis of their pricing (storage, number of users, frequency of usage, etc.) on their website. This will give you some idea of the costing.
- If you’re a law firm, set a percentage of your revenue aside for legal tech, if you’re an in house counsel, set a percentage of the cost of your legal team for your legal tech spend. The actual percentage amount you set aside could range from 0 -10% depending on the innovation priorities of your organisation. However, approaching tech investment as a percentage of your revenue/ cost gives you a clearer perspective on the actual amount spent.
Often, looking at the cost of legal tech in isolation, it is viewed as expensive, however, when viewed as a % of the total revenue or cost, its easier to understand that cost in perspective and more often than not, you will find the cost being a very small percent of the total.
- The Why: Why do you want a legal tech tool? Is your client asking you to use tech? Do you want to make your lawyers more efficient and productive? Do you need a tool for compliance and governance requirements? Or is it part of your larger innovation strategy? There are several options to choose from and answering the why will help you shortlist vendors and tools.
- The How – Your Internal Roll Out Strategy: Even before you consider a legal tech solution, you need to evaluate the readiness of your team to roll out the tools. For instance, do you have people who are excited about technology? How much time are you willing to invest in training your team? What criteria is important for you to assess the successful roll out of the tool? What is the timeline for the roll out? What are your ideal usage metrics? Knowing the answers to these questions will provide the roadmap for a successful implementation of the tools.
- ROI: You don’t want your legal tech investments to be labelled a tech expense so it is important to understand what sort of ROI makes sense for your organisation. And remember, it is not always a numerical amount – some solutions, like security and compliance systems, are essential to maintaining the integrity of the business. However, it is still challenging to quantify that, so include a qualitative element in your ROI analysis. Identify which metrics are important for you to assess the success of the tool, and often these metrics will differ between products.
- Your Use Cases: What are the scenarios in which you envisage legal tech to be used? There are several tools with different features and you may not need all of them. Your specific set of circumstances will determine the exact feature set you need. Identifying this upfront will help you sort through the options available.
For instance, the feature set for a CLM (contract lifecycle management) tool could include –
- to manage and record the internal approvals for every contract;
- to manage ongoing obligations (payment, reporting, etc.) within the contract;
- the ability to sort and filter through your entire contract data set based on certain filters (like jurisdiction, consideration, indemnity obligations, etc.)
- ability to assign tasks to team members for each contract; and
- collaboration tools with internal and external stakeholders.
Depending on your requirement, you may need some or all of these items. Prepare a checklist of features you are looking for and categorize them as ones that you need and the ones that are good to have.
In a nutshell, introspecting on your internal requirements by asking yourself the right questions will go a long way in enabling you to choose the ideal tool for your purposes.