A Guide to Proving Legal Tech’s ROI – Jeff Cox Writes in ACC Docket
On the road to technology adoption in legal departments, there are few other factors as pivotal as proving return on investment (ROI) for securing internal buy-in and getting to actual adoption.
Drawing on his experience as a former Operations Analyst and Assistant Vice President within Citigroup’s legal operations team, UniCourt’s Jeff Cox discusses how legal tech companies can prove ROI to General Counsel in his new article in ACC Docket, A Guide to Proving Legal Tech’s ROI.
In addition to looking at how legal tech companies can help prove ROI in the litigation and contract workflow context, Jeff also details some of the important questions that legal tech companies should be prepared to ask and answer to help GCs better navigate their internal budgetary approval processes.
Here below is an excerpt from the introduction of Jeff’s article:
Proving return on investment (ROI) is without exception one of the most important factors for general counsel when looking at adopting new legal technology. Before getting to the question of what great problems can be solved with new and innovative technology solutions, there’s a fundamental question that should be addressed first: How will that technology save money for the legal department? Whether it’s headcount reduction, streamlining internal processes, or reducing outside legal spend, proving ROI should be the start of the conversation, not just the last slide in a pitch deck.
This article will discuss some of the most common ways in which legal tech can prove ROI for GCs; it will also detail some of the important questions legal tech companies should ask to better understand the in-house budgeting process and help GCs champion new tech adoption with other stakeholders.
Unlocking savings in litigation and contract workflows
The beauty of focusing on proving legal tech ROI within legal department workflows is that there are only so many ways to reduce spend, and they largely fall within two buckets: internal headcount reduction/increased productivity, and cutting outside legal expenses. And when it comes to reducing outside legal expenses, there is also a limited universe of ways to save money: reducing billables and improving outcomes.
In the context of litigation management, legal tech companies pitching to GCs running legal departments involved in thousands of cases per year should look for opportunities to cut spend across the board within litigation workflows. For example, a legal tech solution offering automated notifications when new lawsuits are filed against a GC’s company, as well as the ability to push that data directly into internal applications via APIs can readily show both a reduction in headcount and outside legal expenses.
By virtue of automating data entry through APIs, a legal tech solution will necessarily reduce the headcount required for manual data processing. It will also result in a further reduction of resources by eliminating the ongoing need to clean up human errors in data entry and the added resources needed when downstream data quality issues arise in internal reporting.
To calculate the ROI for GCs, legal tech can obtain average salary information online for paralegals/legal assistants in the relevant industry and geographical area, and then multiply that amount by the number or percentage of resources no longer needed for the manual entry and clean-up of court data.
In addition to reducing headcount, streamlining the process of data entry with APIs and pushing real-time case updates into internal matter management systems also greatly diminishes the frequency of communications needed between in-house and outside counsel. If in-house counsel already has all of the updated case information at their fingertips, the billables from routine progress calls or emails may become a thing of the past.
You can read the full article here on ACC Docket.