Currently, legal teams seem to be prioritising the implementation of legal technology in order to transform the department.
In fact, ‘legal transformation’ and ‘legal technology’ are often seen as interchangeable terms.
Now don’t get me wrong, technology is an essential part of a legal transformation programme. However, when it comes to transforming the way legal services are delivered, the maxim ‘People, Process, Technology’ was never truer and it is no coincidence that technology is the final element of the three.
Let’s take a simple example of tactical volume legal work – NDAs.
At Company A, a large corporation with high volumes of NDAs signed every year, in-house lawyers would historically have:
- Tried to say their standard terms were non-negotiable wherever possible;
- Engaged in negotiation and drafting each time a new counter-party proposed changes.
In order to find the right delivery model for this scenario, let’s break it down into its constituent parts: People, Process, Technology.
The underlying problem with the historical approach is that an expensive resource is undertaking a lower value tactical task. A review of People examines whether the work is being undertaken by the right grade of resource in the right location and in this scenario reveals that:
- A more senior resource is undertaking work that could be undertaken by a more junior resource subject to changes in the Process. If low value tactical work is taken away, the senior resource has more time to concentrate on strategic, high value and high risk matters.
- If the lawyer is based on-shore in a city location, it is likely the work could be undertaken in a lower cost location.
Consideration can also be given as to whether lower value tactical work is best resourced in-house or if a third-party provider is better placed to deliver the work. A more junior resource undertaking the work in a lower cost location leads to higher financial benefits.
The existing process needs to be reviewed in order to identify potential efficiency gains and to determine whether a more junior resource could undertake the work. Below are some of the elements to be considered in our scenario.
- The first element to consider is triage. By triage, I mean the process of obtaining and reviewing all the necessary initial information required for the task. Triage eliminates the need to go back and forth with the originator (e.g. a salesperson). The form used for triage also captures information which enables a standardised approach.
- An example of standardisation for an NDA process would be to capture in the form whether the NDA is for a customer, a supplier or a partner. Key terms in the NDA such as IP, non-solicitation and liability are directly affected by this categorisation. The approach for a Customer is likely to be very different to a Partner with whom a product or service is being jointly developed. By categorising, appropriate template NDAs can be formulated which reflect a reasonable position and reduce the level of mark-up and negotiation with the counter party.
- Against each template NDA, a playbook can be developed and agreed against the key terms. This allows a junior resource to negotiate with a counterparty in a safe way that does not put the organisation at risk. Playbooks can also be applied to NDA’s on third party paper given that the positions will relate same to the key topics in the majority of cases.
- Escalation points can be agreed so that when negotiation falls outside of the playbook, the junior resource escalates to the right lawyer (e.g. with IP expertise). The aim of escalation is not for a qualified lawyer to review all of the output of the junior, rather for escalation to occur only when a threshold is met and an issue falls outside of the playbook workflow.
The level of financial benefit realised by review of process and removing inefficiencies is medium relative to People but in any event, People and Process are often inextricably linked.
Once the People and Process elements have been reviewed, the functionality required from Technology is clear. Below are some Technology considerations applicable to our scenario.
- If budget and/or time are an issue, the Process detailed above can be handled using readily available standard technology. The classic example is Microsoft Office products for which a corporate is normally already licenced. Microsoft Forms can be used to build an NDA intake form in minutes. While there may be greater efficiencies achieved by using other more specialised (and more expensive) products it is possible to achieve significant benefits without them.
- If budget and/or time are more readily available, more specialised tech tools can be used. In our scenario, a document review tool would make the process more efficient; it is easier to navigate mark-ups and insert playbook and previously agreed positions. A recent study that we undertook showed that junior resources were 27% quicker at reviewing contract documents using a document review tool.
Implementation of specialised technology tools can be worthwhile from an efficiency perspective. However, there are few scenarios where the availability of adequate technology blocks the ability to undertake People and Process review for functional legal work. The benefits achieved by People and Process review will almost always outweigh those delivered by Technology implementation.
The level of benefit received by the organisation decreases corresponding to the order of ‘People, Process, Technology’.
To put it bluntly, if you implement new Technology with the same People and Process as before, the efficiency gain is unlikely to outweigh the cost of the Technology. Technology on its own without Process is simply about how data is entered, organised and reported.
This is largely why point solutions such as e-discovery and spend management tools have been successful in the legal tech market. Their core function is based around how data is entered, organised and reported. These systems do not require as much from lawyers in the way of change.
The exception to this rule on Technology is when mandatory processes embedded in the tool force change as part of implementation. However, this often results in poor user adoption as the generic process does not fit the business requirements. In other words, Process review should still come before Technology.
The NDA scenario given above is a very simple one and so it is easy to say ‘my area is far more complex’. Yet, the truth is that the same principles can be applied to many work areas in order to find the optimal delivery model.
If in-house legal teams wish to provide an excellent service to the business, whilst also meeting budget and headcount challenges, a wider review of the department covering People, Process and Technology is needed.