The legal function in a business is there not to just manage risk but importantly is there to support and facilitate growth. We often look at the design and resourcing of that function to ensure it can deliver on our clients’ ambitions. However, we also look at how technology can make the legal function more efficient, more scalable and responsive. This article touches on some of the ways legaltech can do that.
In many areas of business technology is already used as an enabler to get things done more quickly, more efficiently or in a way that cannot be achieved by humans. You will already use technology across finance and to manage your people and your customers. Technology has long been a part of how lawyers work behind the scenes but increasingly it is now helping all business functions get the job done more efficiently, with or without use of lawyers, helping save cost and supporting your growth. Like any other area of the business, before investing in new technology you need to know what’s going to give you the biggest bang for your buck so it’s worth taking a moment to consider what’s right for your business.
What is the problem you are addressing?
You may already know instinctively what is creating you the most pain. Perhaps the time it is taking to get signatures on your contracts is slowing down key deals at the end of the quarter or perhaps you are spending too much time and cost on key investment rounds, sucking up management time and slowing down the release of investment funds. The good news is there are technology solutions to these problems and others, but before you decide on what type of technology to invest in, it’s critical you understand the problem clearly so you don’t waste time and money on the wrong solution. It’s important to look ahead to ensure what you put in supports the longer term business plan. There may also be simple non-tech improvements you can make to your process to achieve efficiencies, for example, a structured online filing system for your contracts and legal documents to support future due diligence exercises. Ensuring you have an optimised process will always benefit you before you engage with technology.
Be clear on your ROI
You wouldn’t invest in any other technology without understanding the benefits it brings you, so why should legaltech be any different? Never be afraid to ask how long the return on investment may be and what assumptions underpin this. Often the supplier will work with you to support your internal business case which may help you secure the right budget for your needs. You should routinely monitor performance and track against your KPIs – if it’s not working for you, there may be product features you aren’t using that the supplier can help with or provide extra training for your users. And if it’s not working out, then understanding the terms on which you have signed up to can help ensure a graceful exit or migration to a new supplier.
Keep it simple
Our team have all worked in top tier law firms and larger corporates which typically are furthest ahead in the use of complex legaltech. In the SME world however, it’s important to keep it simple. Complexity can increase cost, reduce ROI, drag the project out but also impact adoption. There are some great simpler solutions out there for SMEs. So be sure to find the right tool. SME- oriented legaltech is also quite new, with many competing suppliers. Some will thrive and some will fail. So, be sure to do your due diligence.
Try before you buy
Many technology providers provide the opportunity to try their product for free before you invest in a subscription. If they don’t then ensure you get a good product demo, have your questions answered ask who else they supply to and, if possible, seek customer references. It will also help to benchmark against competitor products to ensure you are getting the best deal and product that meets your needs. We can help this process and assess your needs and evaluate market offerings as well as providing recommendations of suppliers we have worked with before. If you decide to invest in technology, you should ensure you are subscribing to the right package so that your user licence costs are manageable and scalable as your business grows.
Where to start
Whilst the array of legaltech is growing all the time, we see some areas that may benefit SMEs:
- E-signature: Almost all companies will benefit from an e-signature capability helping to fast-track signatures and providing an audit trail for executed documents.
- Contract management systems.: As companies scale and the volume of agreements to be reviewed and negotiated increases, these kinds of platforms have the potential to ensure ‘legal’ is not a bottleneck or impediment to growth.
- Early-stage investment: There are some excellent platforms out there that can cost effectively help early stage companies with investment documentation. We work with one of the leading ones. We support clients using the platform and step in as needed for more bespoke deals.
- Digital cap tables and share option management: These provide a quick way of keeping company shareholdings up-to-date and enabling easy communications with shareholders and VC investors as well as providing visibility to employees on equity valuations and vesting.
- Online data rooms: On funding rounds, we are increasingly seeing the use of online data rooms for due diligence. These can often be set up very quickly and helpfully provide visibility on who is in the data room, what they are looking at and for how long. This provides great insight for the management team enabling more timely and productive conversations with institutional investors.
How we can help
We can help you assess what you may need, when you should invest and introduce you to partners we have worked with. Our focus is always to ensure you have the best outcomes even if that means less work for us. Our goal is to help you grow and scale and ensure your legal operations are optimised for the future.
Written by Martin Davidson
Principal at My Inhouse Lawyer
One of our values (Growth) is, in many ways, all about cultivating a growth mindset. We are passionate about learning, improving and evolving. We learn from each other, use the best know-how tools in the market and constantly look for ways to simplify. Lawskool is our way of sharing with you. It isn’t intended to be legal advice, rather to enlighten you to make smart business decisions day to day with the benefit of some of our insight. We hope you enjoy the experience. There are some really good ideas and tips coming from some of the best inhouse lawyers. Easy to read and practical. If there’s something you’d like us to write about or some feedback you wish to share, feel free to drop us a note. Equally, if it’s legal advice you’re after, then just give us a call on 0207 939 3959.
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