Editor’s Note: The author of this post is the CEO of Mitratech, a provider of legal and risk management software.
By Jason Parkman, Chief Executive Officer, Mitratech
In the 2015 legal market, the prevailing “buzzword” just might be disruption – every event and symposium seems to have a theme focused on it, from LegalTech to the Stanford Future Law Conference.
But what are the most significant forms of disruption? And how can lawyers embrace it to improve their businesses?
While new technologies will continue to emerge, the 2015 Winmark Looking Glass Report found that more than a quarter of all legal departments still have no technology budget at all.
Ultimately, what’s most important is whether legal departments are capitalizing on leveraging both technological and non-technological innovation to accelerate quantifiable results for their organizations.
Based on discussions with our clients, Mitratech has identified six sustainable innovations that show how legal departments can embrace disruption and create business value:
1.Hiring non-lawyers to manage the business of the legal department:Modern law departments are expected to perform as any other business unit and allocate their limited resources in a way that most effectively and efficiently serves the larger organization’s strategic goals. Law school, however, does not prepare lawyers with the skills necessary to run a business. In order to fill the gap and to let lawyers concentrate on practicing law, non-lawyers are increasingly serving as Chief Operating Officer (COO), Chief of Staff, or Head of Legal Operations for the legal department.
2.Creating efficiencies through robust knowledge management practices:As legal departments move work in-house, they are increasingly relying on their existing internal knowledge to more efficiently and effectively deliver legal results. By having knowledge management processes and systems in place that make information more accessible, legal teams are able to shorten the time required to perform legal work. In addition, being able to easily access prior legal work increases consistency and reduces duplicative legal work.
3.Improving legal sourcing through data-driven decision-making:In order to lower costs and chunk up the legal process with appropriate resources assigned to each portion of the legal matter, many legal departments are employing analytics to determine what resources would best perform the assigned legal work. The end result is that the department may decide that high risk and unique legal matters may be better handled by outside counsel with very specialized expertise. On the other hand, if the high-risk work is for a recurring legal issue, the legal department may make the determination that it is most efficient to hire in-house attorneys that possess the requisite knowledge. And regardless of the level of risk the legal issue poses, legal departments may determine that portions of the work are best handled by an LPO.
4.Funding litigation with outside investors:Some legal departments are turning to third-party funding for litigation matters. This allows legal departments with limited budgets the ability to litigate meritorious claims against adversaries with far greater resources. In return for their investment, the funders will expect a payment should the litigation be successful. In 2013, The Economist reported that the global market for outside funding of litigation is probably worth more than $1 billion, and only a very small portion of that is currently being funded.
5.Purchasing goods and services through a consortium:Purchasing consortiums are a way legal departments can reduce expenses without reducing the quality or volume of legal service provided. By joining together, legal departments can take advantage of volume discounts and enjoy the leverage provided by being a larger customer.
6.Applying cognitive computing to improve legal efficiency:Computers can now mimic how humans process information and learn from prior experience. IBM’s Watson technology, which famously won its Jeopardy match against national champions, is the most sophisticated example of such a cognitive computing system. There are clear applications for legal departments, including assisting with compliance matters, legal research, diligence, contract management, and litigation.
Detailed information and case studies illustrating how to put these innovations into practice can be found in Mitratech’s recently released whitepaper, Embracing Disruption: 6 Innovations Moving Legal Up the Value Chain .
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