Data analytics, artificial intelligence and legal tech solutions generally are increasingly becoming critical tools for law firms and in-house counsel.
Law firms are the leaders at this time in developing and applying data analytics. Through the use of these tools, firms can predict outcomes and timelines of litigation, likelihood of success and other information that can be utilized to assist in setting alternative fee arrangements and other value-added applications.
For example, by understanding in which types of files lawyers are most successful, firms can set up rosters of lawyers to ensure success and market these through RFP processes. Firms can also, by granting clients access to litigation management software, keep their clients engaged and informed.
Like any new technology, early adopters must have the resources necessary to be able to purchase, implement and take advantage of these technologies, and their applicability is somewhat limited. But the potential is tremendous and many are taking advantage of them.
It is trite to say that in-house counsel do not have access to the same financial resources available to law firms. The expenditure of every dollar must be shown to somehow add directly to the bottom line or it must demonstrate efficiencies to offset the additional expenditures. This requires in-house counsel to make a detailed business case in order to justify expenditures related to AI and data analytics.
The potential gains and efficiencies afforded by some of the AI and contract management tools available in the marketplace are substantial, but a business case is often very difficult to quantify. This is especially tricky when you work for a subsidiary, very common in Canada, where the “home location” may use a different offering or may not have the same resource constraints as your legal department.
So where do we begin? What factors should we turn our mind to in initiating this process? The following are some steps and considerations you can start thinking about as you begin to prepare a persuasive business case for your department’s proposed new tool:
• Analysis: Any business proposal needs to start with a detailed analysis of where your department’s time and resources are going. By breaking it out into broad buckets like contract review, managing external litigation or conducting litigation internally, research time, etc., you can understand where specific tools can make an impact and free up important resources.
• Be knowledgeable of tool offerings: Legal tech is moving fast. There are many innovative emerging legal tech solution providers that are quickly changing how we do our work. Associations such as the Canadian Bar Association, the Canadian Corporate Counsel Association, the Association of Corporate Counsel and law firms and service providers such as Thomson Reuters (publisher of Canadian Lawyer) are routinely offering opportunities to hear about, see the tool offerings and speak with these service providers about how they can help. Take advantage of these opportunities. Also, be mindful that some of these tools may also assist other departments such as HR, purchasing, finance/tax, etc. In that case, it may be useful to involve them in the process and make them cheerleaders of the tool, so as to assist in obtaining any necessary budgetary or other approvals.
• Volunteer to act as testers for pilot projects. Many startups would be very willing and thankful for offering to test their products and tools. This not only allows you to be on the cutting edge of technology, but it also allows you to do it at lower or no cost. Just make sure all proper approvals are obtained in advance, especially if any software downloads are needed, and it is clear who owns the information gathered. Ensure that confidential information will remain confidential and/or be destroyed after the end of the pilot project. It may also be beneficial to have a conversation with your law firm to see how you can take advantage of its investment and software offerings, whether dealing with litigation management or research software. Leverage your partnership and its investment.
• Make your pitch! In your analysis, make sure you measure or estimate the expected ROI, but accept that not all gains are quantifiable: In order to sell any investment in AI or legal tech, it is important to find the ROI associated with this initiative. For a good summary of the points to consider, please see Brad Blickstein’s article “Calculating ROI to Drive Change.”
However, while there is an interest in quantifying the cost or resource savings associated with any tool, with AI and legal tech solutions, the benefit and value is often also derived from the productivity increases, increased negotiation leverage, greater likelihood of litigation success and other harder to quantify and often long-term strategic benefits. This is where being able to leverage your relationship and advisor role with the executive decision-makers becomes critical. Having someone walking them through the tool’s applicability and letting them understand, touch and feel the product may help turn the maybe into a yes. It may also be useful to highlight the costs of not implementing these tools, such as maintaining inefficient and ineffective processes, wasted resources and an inability to keep pace with the advancements being made in other legal departments and companies.
Advances in data analytics and AI will allow departments to do more with less and will give you a substantial advantage. Whether you use these tools to bring back some of the research and labour-intensive work that, if sent out to external counsel, represents a substantial cost to the client or implement a contract management system to help you keep track of and leverage the hidden value of contract renewals and contract monitoring, there is value to be added. Keep ahead of these changes and be ready to pitch new technology to ensure that you can take full advantage of these changes to our practice of law.