Looking past the hype: How in-house is approaching legal technology

Sophie Gould, head of In-house, LexisNexis, discusses the key findings from their new report, based on the largest survey on the usage and implementation of legal in-house tech in the UK.

We’ve just published our inaugural Insight report for in-house counsel, Legal Technology: Looking Past the Hype. The report:

  • reviews how the issue of legal technology (legaltech) is being approached by the UK’s in-house legal community
  • benchmarks best practice for successful legal tech adoption
  • represents the largest survey on the usage and implementation of legal in-house tech.

LexisNexis conducted an extensive survey and had 130 interview responses, including 20 in-depth qualitative interviews with general counsel (GC) from some of the largest in-house legal teams in the UK.

We found that the in-house role has changed significantly, and beyond being a ‘good’ lawyer, GCs now need to drive efficiencies, add real value and demonstrate commercial acumen.

Top three findings

Organisations see their in-house counsel less as a supporting business service, and more as strategic managers of regulatory and legal risk – with an important seat at the top table. Remits are expanding, from legal adviser to business decision-maker.

2. An expectation of increased service sophistication from the promise of new technologies and analysis

Providers of legal analytics have shown that new technologies can power better decision-making in areas such as patent and trademark law, copyright, securities, antitrust and commercial litigation.

3. In -house counsel are seeking efficiency and the ability to demonstrate return on investment

GCs face increasing pressure to increase their value to the organisation while reducing spend. In-house counsel budgets continue to be under pressure, creating a latent demand for alternative service providers. Initial focus continues to be on routine or repetitive workflows, although controlling the cost of legal panels remains a key priority – especially increasing fee visibility and predictability.

Our survey found that 57 per cent of GCs believe that tech investments have already increased their efficiency, while 60 per cent believe that tech will help improve the accuracy of their legal work over the next three to five years. However, one fifth were able to point to a piece of recently installed tech that had low or zero usage, and 67 per cent cite a lack of time to educate themselves on the potential of new legal tech.

Of the GCs we spoke to, 82 per cent have introduced multiple tech types into the business, and almost every organisation we have spoken to plans on introducing more tech in the next few years. It is also evident that lawyers are most comfortable with tried and tested insight tools – legal research tools (eg LexisNexis Library) are the most popular, with 82 per cent of respondents already using this type of software.

While less than four per cent of those surveyed have adopted proof-reading tech, they all report an improvement in the way they work. A further 14 per cent of in-house lawyers plan to introduce proof-reading tech in the future.

Our research revealed different levels of operational and tech maturity across in-house legal teams. Some organisations need to develop or consolidate their legal operations and tech landscape, while others are already developing robust infrastructure to undertake strategic and business transformation roles.

We held two events at the Law Society in September to discuss the findings from the report.   

Maya Hodroj

Maya Hodroj, market development director for Corporates at LexisNexis, spoke to in-house leaders and thinkers at the Law Society in September 2018 (pictured).

The meetings discussed the importance of technology in removing the administrative burden of some tasks, which represent up to 10 per cent of the in-house workload. People agreed this could lead to a significant increase in productivity. This resonated with our research, in that we found that the highest usage of legal tech was in legal research, contract management and matter management.

When asked about their satisfaction with the legal tech deployed by their law firms, feedback was mixed. Forty per cent of GCs said they were dissatisfied, and only 12 per cent said they were very satisfied. Interestingly, more than a third were unaware of the legal tech being used in the business.

However, there is increasing comfort with more advanced document and process tools. Our survey showed that while the current focus of tech innovation is around driving efficiency, in the future tools are expected to unlock valuable insights by improving work accuracy and enabling new data insights.

Understanding the tech you use

We identified a growing need to build knowledge in this area. This is where the LexisNexis In-house Legal Tech Model can help in-house lawyers understand and optimise their current use of legal tech. This simple profile assessment tool helps with the first step of understanding how the issue of legal tech is being approached by the UK’s in-house legal community.

Our research uncovered four distinct stages for legal departments: develop; consolidate; tactical; and transform. Each stage has defined behaviours and characteristics to offer practical, next-step opportunities for in-house teams to increase the value they can demonstrate.

Once you have confirmed your starting position by using the Model, our report then identifies the best practice which legal teams can apply to overcome the inertia from over-hyped legal tech expectations:

  1. Remove ambiguity: Have a clear understanding of your department’s activities and processes, and utilise management information to understand key risk areas and cost categories. Only then consider where potential opportunities may lie.
  2. Start with problems: Once you know the pain points in your team or organisation which need to be addressed, it’s easier to find the right solution. While it’s harder to identify legal tech winners and losers, never be tempted to force-fit solutions.
  3. Make time to innovate: Even though two in three in-house lawyers say they lack the time to understand the legal tech market, it is vital to carve out time to dedicate to innovation. Building an understanding of available solutions is critical to effectively build the business case for stakeholders.
  4. Use multi-disciplinary skill sets: Bringing in experts from other business areas will substantially increase the chances of tech gaining traction. Multi-disciplinary teams allow for richer discussions and help foster a true culture of innovation.
  5. Select partners well: Effective collaboration is key. The effective contribution of both supplier and buyer of legal tech is fundamental to success.

Legal tech offers huge opportunities, but these will only be realised if all parties take a transparent and collaborative approach to its adoption and integration. In-house counsel need to maximise the value from their legal service providers, so it is imperative that there is a clear understanding of the technology used by law firms, and how this can benefit them.

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