In-House LegalTech Success: Tips for Evaluating and Adopting the Right Solutions

In an era of rapid digital transformation, legal technology (LegalTech) has become an essential component of the modern in-house legal team's toolkit. When properly implemented, LegalTech solutions can increase efficiency, reduce costs, and improve overall performance. However, ensuring internal adoption and realizing return on investment (ROI) requires a thoughtful and careful evaluation of use cases and potential providers. This article highlights the importance of a strategic approach when sourcing LegalTech solutions for your in-house legal team, using a real-life example of a large insurance corporation to illustrate the consequences of inadequate evaluation, and outlines steps to ensure successful implementation and maximum ROI.

A Cautionary Tale: The Insurance Corporation's Misstep

During my last visit at Legal Geek conference I was told scary tale on how an innovation related project drastically failed, causing an hard stop on LegalTech related investments.

A large insurance corporation, facing increasing regulatory pressures and an expanding contract portfolio, decided to invest in a contract management tool to streamline its processes. Unfortunately, the company did not thoroughly evaluate the complexity of its contract management process and hastily selected a popular, off-the-shelf solution without considering whether it was the right fit for their needs.

The implementation of the contract management tool was met with significant resistance from the legal team, who found the tool to be overly complex and not intuitive enough for their daily workflow. The legal team had not been properly trained on how to use the tool, and the limited support available from the vendor made it difficult for the team to effectively address their concerns.

Furthermore, the tool lacked key functionalities that were essential to the corporation's contract management process, such as the ability to handle complex contractual relationships, track obligations and deadlines, and automate routine tasks. These shortcomings made it difficult for the legal team to perform their duties efficiently, resulting in a decrease in productivity and an increase in errors.

The lack of customization options also proved to be a major hurdle for the corporation, as they were unable to tailor the tool to meet their specific needs. The tool's inflexibility meant that the legal team had to adapt their processes to fit the tool's limitations, which led to further frustration and decreased adoption rates.

Ultimately, the project failed to deliver the expected results, leading to a significant loss of time, money, and resources. The corporation's legal department was left with a tool that did not meet their needs, and the failure of the project led to a loss of confidence in LegalTech-related investments. It serves as a cautionary tale for companies looking to implement LegalTech solutions, emphasizing the importance of thorough evaluation, proper training, and selecting a tool that meets the specific needs of the organization.

STEP 1️⃣: Identifying and Assessing Use Cases

To avoid the pitfalls experienced by the insurance corporation, the first step in a successful LegalTech implementation is identifying the specific pain points and use cases within your organization. By understanding the team's unique needs and challenges, you can focus on selecting tools and providers that align with your goals. Key considerations when assessing use cases include:

• Workflow optimization: Pinpoint areas where LegalTech can streamline processes, reduce redundancies, and automate routine tasks.
• Risk mitigation: Identify areas where technology can help minimize potential risks, such as contract management, compliance, and data security.
• Collaboration and communication: Consider tools that facilitate collaboration and information sharing among team members and external stakeholders.

And on top of that, always speak to people: identify their real problems, dig deep and reiterate interviews if necessary. Most of the times real process/performance problems are not identifiable simply scratching the surface but require a more intimate connection and understanding of meta-operational issues.

STEP 2️⃣:Evaluating Providers and Solutions

Once you've identified relevant use cases, the next step is to evaluate potential providers and solutions. This process should involve:

• Market research: Explore the available options and shortlist providers that offer solutions for your specific use cases.
• Due diligence: Thoroughly examine each provider's track record, financial stability, and customer testimonials to ensure they are a reliable partner.
• Customizability and scalability: Assess whether the solution can be tailored to your organization's specific needs and can scale as your team grows and evolves.
• Integration: Confirm that the LegalTech solution can seamlessly integrate with your existing systems and infrastructure.

STEP 3️⃣: Fostering Internal Adoption

For LegalTech solutions to deliver ROI, they must be embraced by your in-house legal team. This requires a concerted effort to promote internal adoption, including:

• Training and support: Ensure that team members receive comprehensive training and ongoing support to help them understand the benefits and use the technology effectively.
• Change management: Encourage open communication and address any concerns or resistance to change, demonstrating how LegalTech can enhance the team's performance.
• Measure and showcase success: Track key performance indicators (KPIs) and share success stories to reinforce the value of the LegalTech solution and motivate continued adoption.

STEP 4️⃣: Continuously Monitoring and Optimizing

Finally, to maximize ROI, it is essential to continuously monitor the performance of your LegalTech solutions and make adjustments as needed. This may involve:

• Regular reviews: Conduct periodic assessments to identify areas for improvement or opportunities to expand your LegalTech portfolio.
• Engage with providers: Maintain an open dialogue with your LegalTech providers to ensure they understand your evolving needs and can offer tailored support.
• Encourage feedback: Solicit feedback from your in-house legal team to identify any areas of friction or opportunities for further optimization.

Conclusion

Implementing LegalTech within your in-house legal team is an investment in the future.

By carefully evaluating use cases and providers, fostering internal adoption, and continuously monitoring and optimizing the solutions, you can ensure a smooth transition, maximize ROI, and propel your organization towards greater efficiency and success.

The experience of the large insurance corporation serves as a valuable lesson in the importance of a strategic approach when sourcing LegalTech solutions. Learn from their missteps and take the time to conduct thorough evaluations to unlock the true potential of LegalTech for your organization.

As you venture into the world of LegalTech, remember: the key to success is a well-strategized approach, so gear up and let innovation lead the way!