Going beyond Risk & Compliance – Legal Functions Embracing Digital
The Deloitte Legal Management Consulting team has been working closely with in-house legal teams as they transform their operations. Forward-looking General Counsels (GCs) and their teams are developing or refining their strategies to align with the strategies of their organizations and are adapting their operating models as a consequence. A key enabler of this transformation is making better use of advances in technology to maximize efficiency, reduce cost and free up lawyers’ time to work more closely with the organization as a trusted business partner.
Thank you Mark Schroeder for sponsoring this post.
Deloitte worked with Oxford Economics to survey 300 in-house legal department executives in nine different countries around the globe. This survey of in-house professionals found that, in general, the legal function has already started this journey, and is embracing the opportunities that technology offers, but can do more before the function is truly transformed.
Disruptive innovation is compelling companies to reinvent their business models
Businesses worldwide are facing unprecedented levels of change as a result of technological developments, increased regulation and globalization. These changes are affecting the work that the legal function undertakes and the expectations placed on legal by the businesses they serve.
In response to these pressures, the GC of high-performing companies are optimizing the legal function by setting a strategy aligned with the wider organization, refining processes and workflow, and introducing new tools that exploit current advances in technology. They are combining these with alternative resourcing models such as shared service centers and outsourcing to promote efficiency and standardization. Together these initiatives allow legal to add value by proactively contributing to the organization’s strategy and growth.
Against this background, technological advancements enabling digital transformation offer new ways of working and open up substantial opportunities for legal teams to create additional value to the organization.
In collaboration with Oxford Economics, Deloitte commissioned a global survey, “Oxford Economics Global Legal Department Technology Trends Study,” administered to legal function, operations and procurement professionals with a focus on legal’s technology readiness and adoption. This Study revealed three overarching themes in legal’s journey to value:
Are legal functions harnessing the power of innovative technologies as an enabler to create value?
Advanced technologies can make risk management and compliance more efficient and cost-effective. These technologies free up time for legal to rethink its operating model, become more connected to other corporate departments and contribute to creating stronger value for legal and the whole organization.
Legal’s core missions of risk management and compliance involve a number of time-consuming, repetitive tasks that leave little time to focus on innovation, strategy and value creation. These can often be alleviated through legal technology solutions that leverage process automation, artificial intelligence and advanced analytics.
Recurring tasks and data management constraints keep legal teams from creating value at their organization, a statement shared across sectors.
As a whole, legal will become strategic, replacing rigid silos with more fluid structures so that in-house lawyers can transition to “business partnering,” which allows Legal to participate in the achievement of the organization’s objectives.
At Deloitte, we have started to see tangible examples of legal driving value beyond cost optimization across their organizations. Some legal functions are spearheading innovation by looking at proactive and preemptive risk management, leveraging advances in artificial intelligence, analytics and risk-sensing technologies to complement and enhance traditional compliance programs.
Beyond “fighting fires” and participating in the development of a strategic corporate vision
Going beyond risk management and compliance to become more value-driven
In some cases, growth still take second place to risk management:
The legal function of the future will have an elevated role in the development of multinational corporate strategy
Four key areas of focus:
Introducing new technologies-the road to legal department optimization
In 2016, Deloitte conducted a global study of 243 major legal services purchasers from global multinational corporations. It revealed that clients expect their legal services providers to use technology better and more broadly around knowledge sharing and contract management and shared platforms.
A further desire was for law firms to invest in artificial intelligence to do the commoditized legal work significantly more cheaply. Today, despite encouraging levels of awareness and signs of adaptability, survey respondents have revealed that there is still progress needed before the legal function fully embraces digital opportunities. Only 56% of respondents say their legal function is investing in technology to improve efficiency.
Thank you Mark Schroeder for sponsoring this post.