At the enterprise level, legal departments are often characterized by the glacial speed with which they implement new technologies and processes. This is likely the result of the risk adverse mentality most have adopted. But as new technologies proliferate, there could be higher risk in sitting still.
While solution review and implementation was once solely the general counsel’s decision to make, the creation of roles in legal department operations (LDO) has improved the law departments’ ability to assess and implement technology. So what are the technology concerns of LDO managers? That’s exactly what the Sixth Annual Law Department Operations Survey produced by InsideCounsel and Blickstein Group, in cooperation with Huron Legal, set out to discover.
The survey was taken by 112 law department professionals, with the goal of collecting information about LDO and LDO executives and provide benchmark data to guide the efficient management of in-house law departments. Though the survey targeted numerous practice areas, some of the most important findings revolves around the assessment and implementation of technology.
Not surprisingly, the survey showed that cost was the number one concern on the law profesional’s mind. In fact, 68 percent of those surveyed said that it was a major concern for them in the next three years. Additionally, 38 percent listed the identification of key technologies as one of their top three concerns and 18 percent identified IT spend as one of those concerns. LDOs also reported that they spent about 13 percent of their time addressing law department technology options, which was second only to managing internal law department operations.
LDO managers and general counsel need to focus on defining a strategy that allows them to strike a balance between cost and scalability in building out technology, specifically as it relates to the staffing and support of those projects. They should also be implementing processes and analysis that allow them to control and predict how they’re spending.
According to the LDO survey, 66 percent of technology support provided to the law department was handled by IT. Only 8 percent of respondents had a dedicated person on their team who managed technology solutions. Given the mushrooming need for technology project support in the legal department, it’s essential that support is readily available.
“There needs to be dedicated legal resources, we find that it’s most successful when a person is part of the legal department. We’ve also seen success where there’s a strong partnership between legal and IT and there are full time or close to full time dedicated resources,” says Dan Coppola, managing director of Huron Legal. “You have the fact that legal is somewhat unpredictable and can spike at times and if you’re not really built for that or you don’t have the benefit of dedicated resources it’s challenging… The legal department needs to invest in the development of simply saying what they want out of the program, that’s often the step that’s skipped.”
Considering external options
For many LDO managers, the decision to use outside vendors or internal resources comes down the basic question of what’s available. Given the technology needs across an enterprise, the use of contractors is sometime preferable to putting in a ticket and waiting for IT to respond.
Should third party support be a consideration for you organization, Julie Richner, legal technology program manager for American Electric Power, says GCs need to be properly informed when making that decision.
“Regardless of who is suggesting a path for your department ask them to provide you several corporate references that you can talk to,” Richner says. “If your operations manager or vendor cannot provide a couple corporate references within two weeks of being asked, something is wrong. Either your organization is not plugged into a good peer network or no one else is using the tool or vendor in a good way. If a vendor tells you they cannot provide a reference that is a huge red flag.
While the software ownership lines within a company can sometimes be fuzzy, the LDO survey showed that more than half of legal departments are solely responsible for e-billing, document, and matter management. The survey also showed that 56 percent of respondents had a formalized metrics program that evaluated information captured from these information management systems.
“What I think is starting to evolve, is using that data to make better decisions,” says Jim Michalowicz, managing director at Huron Legal. “We’re moving into areas that are going to allow us to be more analytical on spend, and I think the other area that’s going to grow is going to be the ability to use those analytics for strategic cases analytics.”
According to the survey, the most prevalent area for the application of so-called Big Data was used for matter budgets. Fifty-eight percent of those interviewed had used analytics to help make predictions about their budgets. About half had also used metrics in predicting their discovery costs and the selection of vendors and counsel.
In a conversation she recently had with panel of corporate LDO managers, Richner confirms that benchmarking vendors through analytics had allowed AES to more clearly establish their value. “We each had a different type of agreement we preferred, but at the end of the day, the way we got to those agreements was by benchmarking cases and figuring out what was most important to us. It wasn’t always saving the most money, it was more often predictability,” she says.
Because many of the billing and matter management platforms adhere to codes like the Uniform Task-Based Management System, analysis related to budgeting and payment are often already in a format conducive to the use of pattern finding analytics. Using Big Data to assess patterns outside of cost is not as easy.
“An impediment is when you get into more case strategy, it gets trickier to benchmark that because others companies may be reluctant to release necessary information,” Michalowicz explains. “I don’t think you need to have millions of transactions, but you need enough to identify patterns and show there are trends there. That goes into analysis of a venue, or of a judge or a court, to assess the opportunity to go ahead and win a case. You need enough points to have confidence in the data, but this does hold true for pattern type of cases.”
Regardless of how they’re used, analytics will be an essential advantage to legal departments across the board, and along with a detailed strategy for the support of IT initiatives, they should be on the radar of LDO managers and GCs throughout the corporate world. Since controlling cost is at the forefront of any operation manager’s objectives, if your team hasn’t already taken a look at predictive billing analysis and discussed how your department is spending on resources, it’s about time you approach your GC with those topics.