Category: Digital Transformation

Chapter two of the Enterprise Legal Reputation (ELR) Report unveils new potential for legal departments to directly and positively impact material growth, operational efficiency, and cultural transformation. Here’s how Legal can be a top game-changer for its business.

There are two sides to every story.

Chapter one of the Enterprise Legal Reputation (ELR) Report — a third-party, multinational study of 4,000 enterprise employees — delved into the image of corporate legal teams through the eyes of enterprise employees and revealed a Perception Paradox: Although four in five (78%) employees consider Legal as outstanding protectors of the business who impart good advice, two in three (65%) have knowingly bypassed Legal, at least on occasion.

Chapter two of the ELR Report examines Legal’s perception of its own department by shining a spotlight on the parallels and perspectives of 500 corporate legal professionals from the United States (200 respondents), United Kingdom (100), Germany (100), and France (100). Is Legal aware of its brand image by its constituents? Does the department know what similarities and differences exist between their perceptions and those of its enterprise employees? And ultimately, how can Legal have greater impact on the materiality and growth of its business?

Similar attitude, legal latitude

When it comes to exploring the connection between Legal and its internal clients, nearly three in four (73%) respondents cite positive relationships. These figures are similar to the responses from enterprise employees in chapter one, where three in five (60%) reported harmonious partnerships. Legal believes its collegiality ranks highest with Finance (84%) and HR (79%), and employees reported the best collaboration with these departments as well, although at a slightly lower clip (62%). Further, nine in 10 (91%) corporate legal respondents believe they share exemplary interactions with their internal clients, and almost every corporate Legal respondent (95%) considers their department efficient in managing service requests, a number that wavered only slightly spanning the globe, with 98% in Germany, 96% in the United Kingdom, 95% in the United States, and 91% in France.

Why, then, do three in every four Legal employees feel the strength of their connection with internal clients is solid when less than two in five enterprise employees concur? Despite Legal believing it has “good” or “very good” relationships with IT (78%), Procurement (76%), Sales (74%) and Marketing (73%), the feeling is different from the enterprise employee perspective, sitting at just 38% for IT, 37% for Procurement, 43% for Sales and 37% for Marketing.

While Legal being confident about their relationships is to be commended, these inconsistencies in awareness represent an incongruity and potential obstacle — also known as the Iceberg Effect.

Part of the issue in differing levels of perception could be taking an outside-in view: Since Legal sets the standards for what needs to be accomplished in its department, Legal innately presumes it is accomplishing what needs to be done. And, in fact, many legal teams are doing an extraordinary job. In chapter one, enterprise employees were quick to note how Legal excels at negotiation, procuring vendors and services, and impacting the corporate brand.

Yet what this variance also indicates is the presence of untapped potential. Legal has the capability to be more than a risk mitigator and compliance officer; to do more than review, manage, and sign contracts. This is a chance for Legal to command a place at the table as a transformational change agent and business influencer impacting topline revenue, innovation, competitive differentiation, brand, and corporate culture.

Steering clear of the Iceberg Effect

When it comes to impacting the business where it matters most, Legal is in safe and steady waters supporting Sales and the revenue acquisition process. In fact, nowhere is Legal’s ability to steer the ship clearer than here: More than half (56%) of enterprise employees say Legal kickstarts sales and revenue operations, with 48% citing Legal’s acceleration of deal cycles. Nearly seven in 10 (68%) legal professionals also believe they help Sales effectively close urgent deals, a sentiment that skyrockets to an incredible 84% in Germany.

There can be no revenue recognition until contracts are signed, though, and with two in five legal respondents (40%) spending four to five hours – at least half of every business day – reviewing and managing contracts, Legal expresses a definite need for speed and modernization. Nearly half of respondents (47%) claim their current technology is insufficient. But optimizing with automated tools powered by the combination of artificial intelligence (AI) and contract lifecycle management (CLM) is the key to advancing the entire contract process, from document generation and redlining to e-signature and finalization. This acceleration can pilot faster decision-making on how to push contracts through review cycles, renewals, and negotiation, scaling the speed and growth of revenue generation (44%) as well as mergers and acquisitions (23%).

Legal’s role in materially impacting its business

While the crux of a business’ success may be defined by its sales and revenue, Legal holds the power to influence other functions across the enterprise, too. There can be no sales without a valuable product or service, and more than three in five (61%) legal professionals believe they play a prime role in positively impacting their businesses’ abilities to innovate and differentiate competitively by protecting company patents and intellectual property (IP).

Even beyond the scope of innovation and ideas, it is people who make up the atomic units of a business. Corporate culture and diversity, equity, and inclusion (DEI) are fundamental to operational efficiency and growth. Fortunately, four in five (80%) enterprise employees view Legal as a great partner for procuring vendors and services, and more than half of respondents (52%) worldwide report their departments and companies are now prioritizing vendor diversification. Yet another Legal priority is improving data security, with one in three employees (33%) highlighting the importance of cyber risk management.

It is within these forward-thinking sectors – DEI and data privacy — that Legal can uncover its formula for future success and evolve from a transactional, back-office brand into a visible business influencer, vanguard of innovation, and advocate for diversity and inclusivity. By doing so, Legal can pivot the Perception Paradox and melt the Iceberg Effect, connecting more deeply with its internal clients, ramping up material growth and operational excellence, and expanding its image as guardian of the enterprise into an even more significant role as protector.

Read the ELR Report to learn more about how legal professionals view their relationships with internal clients in comparison to the image enterprise employees have of their legal departments.

The legal department is viewed as an outstanding protector of the business and remarkable advisor. The perception of Legal as a business partner is not quite as stellar. What can Legal do to reconcile these images and come out on top as both?

Bulwark. Safeguard. Defender.

With 77% of enterprise employees around the world rating their legal departments as talented negotiators and almost half (47%) believing Legal positively affects forward-thinking innovation, there are many different perceptions of Legal.

However, the Enterprise Legal Relationship (ELR) Report – a third-party, multinational study of 4,000 enterprise employees and 500 corporate legal professionals spanning the United States, United Kingdom, France, and Germany – revealed that, far and away, the number-one image that enterprise employees have of Legal is as a protector of the business, its assets, and its people.

Guardian of the enterprise

Legal is responsible for ensuring the compliance of a company’s actions, so it’s no surprise that the department is seen first and foremost as an authority figure both expected and enabled to protect the corporate mission. When one envisions the responsibilities of various functions within an enterprise along a spectrum between protection and promotion, Legal – as opposed to Sales and Marketing – falls soundly on the side of protection. Overall, the perception of Legal around the globe is primarily positive with three out of five respondents (60%) citing good relationships — no doubt due in large part to the protection the department imparts to the enterprise as a whole.

Two separate perceptions

When it comes to Legal, however, there is also a Perception Paradox: While Legal is highly respected as the protector of the business, three out of four enterprise employees (73%) do not consider Legal a good business partner.

How can Legal be lauded as protectors of the business when many of its internal clients don’t see it as a good business partner?

It all comes down to perception. Among enterprise employees, protection and trust appear to be two separate perceptions. In fact, 49% respondents globally describe Legal as “inflexible” and 59% call Legal “inefficient.” Additionally, one in 10 – and as many as one in five in the United States and United Kingdom – voiced concerns that Legal’s abundance of caution as protectors have extended the time to close and win deals, slowing and negatively impacting sales cycles.

That said, this is a cross to bear that shouldn’t entirely rest on the albeit strong shoulders of Legal. If Legal is indeed viewed as and expected to be the protector of the business, but those same employees believe that Legal hinders business from moving forward, it might explain why two out of three respondents (65%) admit to having bypassed the Legal departments and its policies in the past, at least on occasion.  

So then how is Legal supposed to act as the very protectors they are regaled as being?

The future of Legal: protector and partner

 Where Legal shines is in matters ensuring that accountable decisions are made and inherent risk is mitigated: patents, trademarks, and intellectual property (92%) and regional and global-specific matters (89%) top the list. Yet Legal has the potential to evolve its perceptions and become not only the intellectual “head” of an enterprise, but much more of its heart.

Employees want, need, and deserve to feel secure in an organization.  As a true protector, Legal can be empowered to let internal clients know Legal is “with them.” By freeing up time from mundane tasks with state-of-the-art automation, Legal will have an opportunity to contribute more collaborative support to its internal clients, earning greater trust and transforming into a truly valued business partner as well as the protector of the business they always have been.

Assist legal teams in better understanding their brand image by downloading ELR Report Chapter 1.

As many as 65% of enterprise employees bypass the legal department on occasion. Here’s how to turn that around and become the true leader Legal is meant to be.

Modern life teems with sigh-worthy moments: dodgy WiFi when you’re on deadline, your phone battery running out of juice with no place to recharge, the dreaded “You have two more password attempts before being locked out.”

But would it surprise you to learn that, for enterprise employees, dealing with Legal can also sometimes feel a little bit the same? The Enterprise Legal Relationship (ELR) Report – a third-party, multinational study of 4,000 enterprise employees and 500 corporate legal professionals across the United States, United Kingdom, France, and Germany – revealed that only 35% of respondents always engage with Legal on matters.

Even more astonishing, an inverse relationship exists: the fewer the transactions with Legal, the more positive the relationship. Employees from the United Kingdom, who tend to engage with the legal department most frequently, report the poorest interactions, whereas employees in France cite perhaps the best relationships with Legal, yet are most likely to bypass Legal.

It doesn’t have to be this way. These findings present a major opportunity for Legal to improve its approachability factor. In fact, the department has the chance to jumpstart efficiency, impact materiality, and grow the innovation and culture of the business in unprecedented ways.

Increase the percentage of employees that engage Legal by:

1. Cutting the perception of red tape

By and large, employees believe Legal is doing its job – and exceedingly well! But for the enterprise employees who do admittedly bypass Legal on occasion, 36% say they feel the department has a tendency to sometimes be overly bureaucratic.

Legal excels at patents, trademarks, and intellectual property (IP), according to 92% of respondents, as well as matters involving HR issues (88%). But as business partners, nearly half (49%) claim that Legal can be “too process-oriented,” causing 53% of employees in even the most-compliant United States to occasionally circumvent legal processes. And in the other nations surveyed, those numbers skyrocket, to 63% in the United Kingdom, 68% in Germany, and 73% in France.

Legal is typically process-oriented – that’s how the department protects the business. This is a chance to examine existing policies and forge new ones that may reduce any unnecessary inefficiencies.

2. Accelerating response times

Every internal client knows that mitigating enterprise risk is Legal’s essential purpose. Yet nearly half of global respondents worry that Legal’s abundance of caution while doing so could potentially damage sales cycles, affecting deal close rates (43%), missed earnings (35%), and even stock price drops and valuation loss (14% each, respectively). Further, many employees (41%) feel that Legal is not as responsive since many legal operations departments have been working remotely or on a hybrid schedule as a result of the COVID-19 pandemic.

It’s impossible to work well together if a salient entity like Legal even occasionally feels absent from the enterprise. But introducing methods to improve channels of cross-enterprise communication as well as automation and artificial intelligence (AI) tools to rapidly accelerate Legal’s response time can dramatically prevent Legal’s chance of being bypassed.

3. Embracing flexibility and inclusivity

Trust has a way of naturally trickling downward. Half of all employees (49%) – and three out of five (58%) in France – believe Legal can sometimes be a bit too rigid. If employees feel that a situation is inflexible, they may be far less likely to interact, for fear of being rejected. However, as one ethical compass of the enterprise, Legal also has a unique and distinct advantage in its proverbial back pocket: the ability to transform company culture by bearing the torch for diversity, equity, and inclusion (DEI) and protecting the business’ atomic unit – data.

Knowledge is power

Legal always puts itself in the line of fire for a business. But how can you protect the business if two-thirds of your internal clients occasionally evade your oversight?

Bypassing legal is no way to reach your enterprise’s desired destination. Arm yourself, your department, and your team with this knowledge – the knowledge to automate both workflows and processes for greater efficiency and effectiveness between departments; to be a business partner that accelerates the cycle of winning deals; and to become more involved, approachable, and collaborative – so that employees always abide by Legal’s policies. This is how Legal becomes a leader. And, by doing so, Legal will secure a spot as a key differentiator for cost efficiency, operational excellence, and revenue generation.

Find out more about how to prevent your legal team from being bypassed by downloading ELR Report Chapter 1.

The ELR Report is a third-party, multinational study of 4,000 enterprise employees and 500 corporate legal professionals across the United States, United Kingdom, France, and Germany intended to showcase relationship dynamics and perceived image between corporate legal teams and enterprise organizations.

Trusted relationships are everything.

According to Lord Richard Layard, today’s foremost happiness researcher and program director of the Centre for Economic Performance at the London School of Economics, what matters most in business is what matters most in life: cultivating a sense of belonging and purpose bolstered by meaningful connection.

Any team, be it Sherlock and Watson or the Super Bowl champion Los Angeles Rams, possesses a shared objective, goal, or destination. Every player must be invested in doing the work needed to arrive at that pinnacle. And each individual must feel a connection with their colleagues or teammates to want to achieve that success together.

It’s no different for business teams. If you’ve ever wondered how you can enhance your relationship with internal clients, you aren’t alone. It turns out the status of the relationship with Legal can differ by department.

The Enterprise Legal Relationship (ELR) Report – a third-party, multinational study of 4,000 enterprise employees and 500 corporate legal professionals across the United States, United Kingdom, France, and Germany – found that the majority (77%) of enterprise employees believe that Legal is exceptional at negotiating on the behalf of their companies. However, less than one in five (19%) feels Legal prioritizes its internal clients, and the status of those relationships can vary across the enterprise.

So what accounts for this disconnect among departments? And what can be done to change it?

Satisfied with safeguarding

The ELR Report revealed that enterprise employees believe Legal’s charter is to protect the company, assets, and people. Additionally, 46% of all global employees consider Legal a trusted advisor. It makes sense, then, that the more liability-prone departments have a higher rate of positive engagement with Legal: Around the globe, 62% of employees from Human Resources (HR) and Finance note positive relations with Legal.

Even more impressively, seven in 10 U.S. respondents are pleased with Legal’s interactions with HR. Employees in France cite collegiality with both HR and Finance at 66%. In the United Kingdom, 64% tout a good working relationship with HR; 62% say the same of Finance, whereas in Germany – which reports the lowest rate of satisfaction with Legal — half (50%) are content with HR and 58% with Finance.

Feeling the strain

For Sales, IT, Marketing and Procurement, however, those numbers plummet – only 43% of global respondents say Legal’s interactions with Sales are positive, and that figure drops to 38% for IT and 37% for both Marketing and Procurement.

U.K. employees cite satisfaction with Sales, Marketing, and IT at just 35%. And in France – where, by and large, legal teams are viewed as uncompromising – only 29% consider Legal to share a decent connection with Procurement; 33% with IT.

Similarly, 40% of U.S. enterprise employees call Legal’s relationships with Sales and IT positive. Marketing comes in lower at 38%. Data are not much improved for these departments in Germany, where less the half have good interactions with Sales (49%) and IT (43%), and even fewer do with Marketing (37%) and Procurement (38%).

Looking in the mirror

Legal manages various types of matters including contracts, negotiations, lawsuits, and issues of compliance. Since HR and Finance are required to follow protocol – they are not supposed to deviate from “the book,” and the rules that Legal sets and abides by to safeguard the company – it’s only natural that they find dealing with Legal easier.

Meanwhile, Sales, Marketing, IT, and Procurement – departments that are, by their nature, meant to push the envelope to innovate, hit numbers, and modernize – report frustration working with Legal. As it is their responsibility to assertively grow and advance the enterprise in avant-garde and creative ways, they may feel stymied and stonewalled by the very parameters put into place to protect the business.

A call for change

Still, it doesn’t have to be this way. People are a company’s most valuable asset. And with the core of any business a collection of both internal and external relationships, the more connected the enterprise, the more successful it will be. For the sake of business growth and efficiency, Legal can seize this moment to become a more active partner, to nurture more collaborative alliances, to enhance relationships across the business – and to ultimately connect to the enterprise as a whole, now more than ever.

Take the next step in elevating your internal working relationships. Your business is counting on you.

Learn more by reading ELR Report Chapter 1.

The ELR Report is a third-party, multinational study of 4,000 enterprise employees and 500 corporate legal professionals across the United States, United Kingdom, France, and Germany intended to showcase relationship dynamics and perceived image between corporate legal teams and enterprise organizations.

Legal AI technology, along with other forms of AI, was once the stuff of science fiction. However, artificial intelligence (AI) has entrenched itself in the mainstream. While there are plenty of myths and misconceptions floating around about what AI is and what it can do, one thing is clear: AI gets results.

That’s why more and more corporate legal departments and legal ops professionals are turning to AI-powered solutions to boost efficiency, cut costs and more. As the year goes on, one of the top legal operations trends we expect to see is companies capitalizing on the practical, real-world results that AI can provide.

The Prevalence of Legal AI Technology

We’ve come a long way from the early days of AI, which were largely dominated by chess games and robot movies. Today, AI is present in nearly every aspect of business, with legal AI technology serving as an integral part of how modern legal ops teams function along with the benefits of a contract management system.

There’s no question that general AI adoption among companies of all sizes is on the rise. McKinsey’s State of AI in 2021 Report found that 56% of survey participants across multiple industries adopted AI in 2021, up 50% the previous year. This adoption significantly impacted companies’ bottom lines, with 27% of respondents saying they could trace at least 5% of earnings before interest and taxes (EBIT) to AI.

Corporate legal departments are part of this upward trend. According to CLOC State of the Industry Reports, in-house AI usage increased from 12% in 2019 to 22% in 2021. Not surprisingly, the AI legal software market is predicted to grow by more than 28% between 2021 and 2026.

AI Results in Action

AI is a technology that learns, reasons and acts for itself. It can make decisions that usually require a human level of expertise, meaning it can help lawyers and legal ops professionals anticipate problems and address issues as, or even before, they arise.

AI is ideal for data-intensive tasks because it identifies patterns, learns from them, and generates insights faster and more accurately than humans. Legal work is increasingly made up of data-driven tasks, meaning more legal ops professionals should be turning to AI. A perfect example is contract management.

A study showed that legal contract review software makes new users immediately 51.5% more productive and roughly 33% more efficient by conducting first-pass contract review, making redlines and delivering a contract risk profile, all in a matter of minutes. If you take a typical midsize company with 55 lawyers who collectively review an average of 9,526 contracts each year, a 51.5% productivity increase allows the same legal team to process 4,906 additional contracts each year – the equivalent of adding 28 lawyers to the team.

The benefits of AI based contract management don’t end when the deal is signed. Your contracts contain mountains of valuable data that can help you better run your business and increase efficiency. The only problem is that you historically needed someone to review all those contracts to get at that valuable data, and few legal departments had the time or staff to do the job correctly.

Legal AI technology, though, can review thousands of contracts at once and export data in five seconds or less. When you apply that power to time-intensive, voluminous tasks like repapering, batch review, legacy contract migration and more, AI can save in-house counsel and legal ops professionals a significant number of hours. And that time savings can be reinvested into tasks that create value for the company. In fact, it’s been shown that properly managing contracts from start to finish can increase revenues by up to 9.2%.

A World of Possibilities for Legal AI Technology

Contracting is just one area where in-house lawyers and legal ops professionals are seeing real-world results by implementing AI. As innovation continues to disrupt the legal tech world, AI is being introduced into nearly every aspect of practice and business. But now, AI has evolved beyond a buzzword to provide meaningful – and impactful – results.

To read more about how legal AI technology impacts legal departments and other top trends shaping legal ops today, download our white paper Six Leading Corporate Legal Operations Trends for 2022.