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The General Counsel’s Guide to Digital Transformation

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The General Counsel’s Guide to Digital Transformation

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The top ten traps that consistently cause General Counsels to fail when adopting Legal Technology.

Although 86% of General Counsels rate ‘investing in technology and automation’ as their top priority most will never get past the starting line.The reason? It’s not for lack of intent, or need, or interest. Indeed, most will stumble right near the finish line. We consistently see GC’s who do all the hard work and yet never get live.

All functions have muscles. Things they have been trained to do - through repeated use. The most developed muscles are linear in nature and repeatable. Sales is good at selling, recruitment at hiring, etc.

The biggest challenge functional leaders have is when are required to rapidly develop ‘non-linear’ (i.e. cross-functional), less-frequent competencies - that are a new ‘core’ capability for the function or executive. Ask a GC how they select and sign up a new law firm to spend $100,000 - the answer is often as simple as a few emails and signed engagement letter. Ask them how they will spend half that amount on technology, and they will scratch their head… even though - because of the ‘sunk cost’ nature of professional services spend it is far more likely that it will not generate value.

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Here are the Top 10 traps that consistently cause General Counsel’s digital transformation strategies to fail:

1) You let risk aversion get the better of you

The trap:
When you spend your career protecting the business from risk it is understandably hard to accept risk, particularly in unfamiliar terrain. Many legal functions try to address this through increased ‘rigor’. Which translates to: speaking with more vendors, involving more stakeholders and extending the process. Counterintuitively, research by Gartner shows this increases risk of you getting it wrong (i.e. purchase regret).

Do this:
Start relatively small and work with a vendor that doesn’t ‘lock you in’. So if the solution doesn’t play out as you hoped you can walk away without losing much. Using the solution in a live fire environment is the only way you will know that it creates value.

Don’t do that:
Turn vendor selection into a D-Day landing. Your probability of getting live drops markedly, and if you do ever make a start you will have a high degree of ‘purchase regret’.

2) You approach the project like a contract negotiation

The trap:
The majority of projects that lawyers have worked on in their careers are centered on contracts. The problem with contracts is that once they are signed they are hard to change, and value realisation is typically not the lawyer's problem. Hence, this bias translates into ‘over processing’ on ‘front-end’ requirements (e.g. vendor selection, and negotiation) and ‘under-resourcing’ the back end (e.g. change management, and user adoption).

Do this:
Anchor your efforts on ‘time to first value’, not risk. Balance requirements, scope, and vendor selection with pragmatism (See our Legal Tech Shopping List for help). Knowing that unlike contracts a good vendor will have a flexible/modular solution that allows you to ‘build the ship while sailing’. Research by Gartner shows that more than 70% of IT Project risk sits with end-user adoption - overinvest here.

Don’t do that:
Involve too many stakeholders, get lost in ongoing vendor parades and discussions about requirements and ‘analysis paralysis’.

3) You frame the business case around ‘what legal needs’

The trap:
Legal functions are overworked, have to wade through unnecessary admin to get the job done and have few tools to help. Understandably many GCs seek support for adoption of technology by outlining their problems. However, unfortunately, the business doesn’t really care. Few CFOs are interested in a conversation about spending more on Legal.

Do this:
If you can’t fund the project out of your legal budget, ensure you align your business case around questions such as: How will this support a strategic initiative? How will this help the business move faster? How will this reduce existing costs in the business (external spend, removal of other line items, or the requirement for additional headcount)? Or how will this generate ROI for shareholders?

Finally, budget holders are always skeptical of people asking for money, without sacrificing anything in return - demonstrate that you are willing to go without something to get this.

Don’t do that:
Frame the discussion around better management of legal risk, legal being overworked, or having too few resources.

4) You get hung up in ‘integrations’

The trap:
Understandably, many businesses consider Nirvana to be where all systems talk to each other perfectly. However, there is a reason they don’t. Integrations typically represent incredibly poor ROI. Consider integrating a contract management system with Salesforce. You do 500 sales contracts a year, and it takes an average of 2 minutes to upload the contract into your CMS (500 contracts x 2 minutes) divided by 60 minutes = 16.6 hours @ $100 an hour = $1,600 per year. If the integration costs $30,000, you will have a payback period of 19 years.

Do this:
Focus on getting live, and getting to value. If you decide that an integration will 5x the value of your solution, you can do it later with data to prove the value/investment.

Don’t do that:
Allow other functions to dictate that you have to integrate with their system. They are passing their mess onto you in the hope (because you are inexperienced) you will fall for it. The introduction of your system is not going to make the status quo worse (someone currently enters data into the other system) - so only do it if the number stack up.

To learn about the final 6 traps – Download our Guide.

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