2023 Predictions: Data and Technology Will Create a New Paradigm for Law Departments
Legal departments will be asked to reduce costs and do more with less due to the economic pressures. That prompts the question, how can we leverage technology to provide services quickly, accurately, and efficiently at lower cost? The answer is to adopt tools that ensure your vital data is at your fingertips, especially critical contract data like payment terms, auto-renewals, triggers for discounts and rebates, and expiration dates. It is more important now than ever to have contract life cycle management technology, such as Evisort, in place as quickly as possible to accelerate the change management process and be ready with answers at a moment's notice.
Efficient and nimble legal technology stacks are required. Tech adopted by legal professionals must integrate seamlessly into an organization's business side and be quick and intuitive for end users to communicate with the department.
Data, automation and legal operations have been the big buzzwords in the last few years, and that focus will continue. People are realizing that data is one of their most valuable assets. Legal departments possess a wealth of knowledge and are expected to do more with that data to maximize that value. No longer are lawyers simply advising on risks, but participating in discussions around profitability and key performance metrics. In the coming years, legal departments will increasingly leverage the information to provide forward-looking business analysis.
Lawyers will also increasingly be scrutinizing the long-term impacts of contracts. In addition to tracking obligations and deadlines, legal ops will keep a pulse on how contracts impact intangible resources such as time and productivity. They will also analyze how specific terms can change revenue over time, which is especially important in the uncertain economy we expect in 2023.
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Evolving the purpose of the legal department
Building off of the increased data use, legal departments will become the business's trusted advisors and commercial partners. Instead of merely providing legal advice to avoid pitfalls, Legal will answer questions like, "How can we best accomplish this business objective?" We have already seen this shift, and it will accelerate as new products, markets and laws emerge. In the future, lawyers must be agile and in tune with the business to proactively support the commercial team.
Changes to billing
We are already seeing fundamental changes in legal billing, and these changes will accelerate. Traditionally, lawyers have billed by the hour. With technology eliminating rote tasks, lawyers can focus on more complex matters and provide more value-based services that drive revenue for clients. Law firms are in a unique position to benchmark legal costs, evaluate risks, and to provide strategic advice to clients on industry and market trends. This places law firms at an advantage in fashioning flexible billing arrangements that are more predictable for clients and with potentially greater upside for the firm – a win for both lawyers and clients.
As in many other industries, data and technology use is evolving within legal practice. The advancements will enable new business contributions and enhanced strategic value. Legal departments should embrace AI and CLM now.
To learn more about Evisort's industry-changing technology, visit our platform overview.