As legal departments face increased pressure to cut costs amid the uncertain economic environment, one area where some general counsel may consider spending reductions is technology.
But Michele Lau, GoDaddy's chief legal officer and corporate secretary, recently said “technology should not be the first thing that people cut.”
Speaking during an Ironclad webinar, Lau said eliminating planned tech purchases will result in legal departments continuing to implement manual processes in areas where “it's not sustainable to continue without more headcount, and you're not getting more headcount.”
Lau instead recommended legal teams make “prudent investments” in tech as part of their efforts to figure out how to work smarter, not harder.
Carolyn Herzog, chief legal officer at Elastic, said during the webinar that she wholeheartedly agreed with Lau.
She highlighted that tech spending and adoption produces benefits for companies’ internal teams, including their legal departments, as well as their customers.
“You're going to be able to serve your customers in a better, faster way,” Herzog said. “So finding the right tools and being able to enable them is exactly where companies should be going.”
Lexion report
Some recently released surveys indicate many in-house legal departments hope to make new investments in technology in 2023, much as they have throughout the COVID-19 pandemic.
Even amid expectations of layoffs and hiring freezes, 44% of more than 450 surveyed legal professionals said they expect to add a technology to increase efficiency, according to a recent report from contract management provider Lexion.
Survey respondents indicated that tools for e-signature (31.3%), contract repository (29.4%), and contract review/redlining (27.6%) are their priority acquisitions in the next six months.
“Respondents are bullish on leveraging technology as a resource to help reduce the workload when there’s growth in legal work, but no increase in headcount or outside counsel spend,” Lexion’s State of Legal Tech report said.
HBR Consulting report
Meanwhile, HBR Consulting’s 2022 Law Department Survey found that 51% of in-house teams anticipate an increase in their legal technology budgets next year.
Emerging workflow-based technologies have taken the lead as the tools most likely to be considered for implementation in the next one to two years, a press release about the report said.
Along those lines, 30% of departments indicated consideration of implementing legal service request tools (up from 19% last year) and 29% expressed interest in robust workflow automation tools (also up from 19% last year).
"We are seeing many departments that have already adopted core legal technology (e-billing, document management, etc.) turn their focus to emerging tools related to workflow and analytics that can help align legal with the innovation trends we are seeing take off in the corporate world more broadly,” said Lauren Chung, chief practice officer and survey editor at HBR.
“Strategic investment in these types of technology can also improve efficiency and drive data-driven decision making, which will become increasingly important as economic pressures impact law departments,” Chung added.
Professional development
Beyond efficiency gains, chief legal officers said technology spending also can produce professional development benefits.
Lau recounted a recent conversation she had with a fellow legal professional who said they wanted to focus on more strategic projects but didn’t have the time because their core responsibilities relied on outdated technology.
Lau said improved technology would free up that individual, as well as others in similar circumstances, to focus on higher-level work.
“We want to be able to help them reshuffle their portfolio so that they can learn new things and help them continue to grow rather than doing the same kind of more manual things over and over again,” she said.
Herzog agreed, noting she recently encouraged someone who was knee-deep in implementing a new technology to keep going.
“I said, ‘I promise you it's so painful, but learning how to do this is a really good professional development opportunity. People will want to know how to do this,’” Herzog said.
Mary O’Carroll, Ironclad’s chief community officer and the moderator of the recent webinar, also said lawyers should not worry about technology eliminating the need for their legal expertise and positions.
Instead, she said they should view technology as a way to make their jobs better.
“It's going to take away the stuff you don't want to do, and there's going to be a bigger need for lawyers just doing the right types of work,” O’Carroll said.
