By Steve J.Tie Shue, Sr. Director - Product Marketing
In recent weeks law firms globally have announced rolling back some of the initial cost-cutting measures taken at the onset of the global pandemic – including salary reductions. Yet the pulse of the legal community remains unsettled. Not surprising given competing headlines discussing push back on client invoices, furloughs becoming layoffs, and deferment of new hires. Executives currently exploring pathways for sustaining profitability will benefit from strong representation of technology and information teams in planning committees – individuals immediately positioned to identify opportunities for cost savings and efficiency gains. Here are three reasons why.
Digital transformation began in earnest within law firms just over a decade ago. Significant investments followed not only in infrastructure but also in human capital to modernize operations. One of the most critical – and ultimately successful – investments was the evolution of law librarians becoming knowledge officers. The well-honed discipline of managing long-term vendor relationships and passion for enabling the practice of law made knowledge officers uniquely qualified as both a gatekeeper for a proliferation of legal solutions providers and a validator of their respective value propositions. CFOs and CIOs gained a trusted point person for streamlining procurement. Lawyers and paralegals earned a business partner with a deep appreciation for the nuances of legal workflow.
Before innovation became a term synonymous with clickbait, it was used to differentiate actual breakthroughs in technology from incremental enhancements of existing products. Over time identifying compelling opportunities for value realization fueled the need for fulltime innovation managers. Within larger law firms, this role is commonly tasked with making the proverbial build vs. buy or strategic partnership recommendations to improve work product and processes – not unlike what happens within the product strategy sessions of legal tech companies. Focusing on innovation proved necessary not only to compete against rival firms but safeguard against potential disruption from alternative legal services providers (ALSPs) as consumers became increasingly savvier in challenging the status quo.
The mainstreaming of automated productivity tools like redaction and the advent of AI-enabled platforms are proof points the days of considering exploration of emerging technologies as novel are long behind us. Timely as law firms grapple with the reality of smaller matter teams due to pandemic-driven reductions in staff. Chances are someone in the CIO’s office already has talking points and case studies of how technology investments can help address resulting gaps in productivity and prevent burnout.
Realizing a meaningful return on technology investments requires change management to foster adoption. This was crucial learning in the early days of digital transformation. Technology and information managers in law firms quickly surmised that making good on this lesson required being selective with which products and services make it into tech stacks. No good comes from having a parade of vendors offering similar or overlapping solutions rotating through matter team workflows. At minimum it’s confusing but – even more concerning – it also introduces unnecessary risk and proves wildly unprofitable. Understandably, in some law firms this has resulted in an aversion to long-term SaaS agreements even when they offer lower monthly premiums.
The hard-shell of legal technologists in vendor management will prove critical in the months ahead. Their experience identifying a preferred list of trusted vendors and negotiating the terms most favorable to the law firm's budget and priorities should positively impact margins.
Datasite has proudly partnered with legal technologists for more than twenty-five years. From deal marketing to deal prep and white rooms – they've been critical consultants in our own innovation decision making. For more information click here or contact a consultant.