Welcome to Onit’s July compilation of some of the most pertinent and timely articles for corporate legal and legal operations news.
In this month’s digest, we explore corporate legal departments as profit centers, CLM ROI, the latest ACC benchmarking survey results, how to build a more resilient legal department and an approach to evaluate and control legal spend.
Are Corporate Legal Departments the Next Profit Centers?
Is litigation the next big revenue generator for companies? According to a study by a finance firm, companies with inadequate affirmative recovery programs are 27% more likely to leave money on the table. Meanwhile, 73% of CFOs say they have adequate programs to capture value through affirmative litigation, but 46% responded that they needed improvement.
According to the report:
“The research suggests that companies are on the cusp of a paradigm shift in how they approach legal assets and that financial officers understand their value and have new opportunities to unlock them.”
As a result, we may see more corporate legal departments shifting some focus from managing risks and controlling costs to collaborating more closely with CFOs.
Finding ROI for CLM
The latest legal tech darling – for a good reason – is contract lifecycle management (CLM). If you’re up-to-date on legal operations news, you’re probably all too familiar with the technology. Contract management is an area ripe for digital transformation.
Yet, the buzz around CLM is sometimes more hype than substance – especially when you consider CLM ROI. In this podcast, Matt DenOuden, Onit’s Senior Vice President of Global Sales, discusses how to get a CLM solution from hype to payoff and an innovative approach to CLM technology with all the rewards and none of the risks.
(source: Onit blog)
One in Four Corporate Legal Departments Are Dedicating Spend to Contract Management Technology (and Other ACC Survey Insights)
Speaking of CLM technology and its popularity, you might not be surprised to find out that the top legal tech area by allocated spend is contract management solutions. This is according to the 2021 Law Department Management Benchmarking Report. Rounding out the top five are compliance, legal research services, IP management and matter management.
The survey includes responses from 493 legal departments in organizations across 24 industries and 40 countries.
Other interesting findings from a legal operations news perspective include:
- The mean legal department composition is 66% lawyers, 12% paralegals, 6% legal operations professionals and 8% admin/secretarial staff.
- The median total legal spend for companies is $1.2M for small companies, $8.4M for mid-sized companies and $64M for large companies.
- 77% of the participants have a list of preferred law firms, ALSPs and other legal service providers. In 2020, they worked with 36 law firms and two ALSPs on average.
Build a More Resilient Law Department With These Six Tips from Gartner
The pandemic has been one of the most significant disruptors in recent history. According to Gartner, persistent disruption can be expected over the next five years, leading to further risks. To counter these effects, legal departments must be able to provide timely guidance by evolving their departments.
How can they do this?
Gartner offers six shifts that will be critical in the coming years. These include assessing issues rapidly, prioritizing legal’s service portfolio by the impact of decisions, experimenting to deliver business outcomes and more. Conquering these attributes will lead to a more flexible and effective legal department.
Keep an Eye on Corporate Legal Spend
Nowadays, there is increasing pressure to run the legal department like a business – all while doing more with less and containing costs.
Enter the challenge of outside counsel invoices. The bills are often long, complex and can have differing or vague descriptions of charges. With limited resources, in-house professionals don’t always have time to dig deep into each line item.
How can you evaluate this facet of legal spend and ensure invoices are sticking to outside counsel guidelines?
PYMNTS.com explores viable and easily attainable solutions to counteract unnecessary overspending, offering an opportunity to support external legal service providers’ cash flow and optimize corporate’s legal spend.
Bonus Resource for Legal Operations News: How CLM and AI Pay Off for Corporate Legal, Sales and Procurement
This Quick Start Guide offers a bite-sized approach for exploring CLM and AI benefits and how they extend beyond in-house lawyers to sales and procurement. Learn how the technology can help you close deals faster, improve business outcomes and decrease risks. You can find the guide here.