Digital Transformation of Legal Departments in 2021: 3 Major Reasons To Accelerate
Legal departments are finally participating in digital transformation, a process that is becoming integral to the productivity and efficiency of organizations looking to stay competitive.
Digital transformation has exploded during the COVID-19 crisis, and it is changing the way organizations function in the long term. This also includes legal departments using digital transformation to boost productivity, improve operational processes, and become key players within their organizations.
Here are 3 reasons to accelerate the digital transformation of legal department processes in 2021.
1. DIGITAL TRANSFORMATION IS THE NEW NORMAL
More and more companies have begun to embrace digital transformation thanks to the impetus of European institutions. New developments in digital transformation have been highly critical during the COVID-19 pandemic in 2020, which stalled the world’s economies.
The European and international drive for digitalization
The European Union, through its various bodies, launched the digitization of businesses in the early 2000s. Since then, digital invoicing has been adopted at the member state level, and the EU has set new goals.
The European Commission wants to “shape the digital future of Europe”. In March 2021, the Commission states that it intends to chart a European course “towards greater digital empowerment by 2030”, thus setting a roadmap for the decade. One of the objectives concerns the digital transformation of businesses.
In addition to numerical targets, the EU wants to put its industrial and commercial base at the center of the business world. Thanks to digitalization, the European digital market has the ambition to play a leading role on the international scene. The announcement of the creation of an EU-US Trade and Technology Council symbolizes this dynamic.
The health crisis as a gas pedal of digital transformation
The Covid-19 pandemic, which has paralyzed businesses since March 2020, is acting as a gas pedal of digitalization. Companies had to adapt quickly to a remote and dematerialized work with worldwide confinements and obligations to work remotely.
Requests for digital transition consulting have multiplied and digitalization has become an obligation for many companies. The French government has taken advantage of this acceleration to introduce a more ambitious timetable for the digitization of companies with the 2020 finance law.
Digitalization, in this sense, has become the new norm and companies that do not take the plunge have no chance of maintaining their level of competitiveness.
2. DIGITALIZATION OF THE LEGAL DEPARTMENT: THE KEY TO PRODUCTIVITY
Companies that take the digitalization step generally do so by department. For the moment, the legal department is the poor pupil in terms of digitalization. However, the digitalization of the legal department is a significant productivity gas pedal for companies.
Legal departments with low digital maturity
A study on the digital transformation of the legal function revealed that only 18% of legal departments believe they have an advanced level of digitalization. This very low level of legal maturity is surprising, given that mastery of tools and new technologies is one of the skills now expected of lawyers. Moreover, secure SaaS tools, such as the DiliTrust Governance Suite, as well as players supporting the transition, are nevertheless well present on the market.
This delay can be explained by a still traditional vision of the company’s legal processes. Collaboration is not a reflex, and the use of digital technology implies a profound change in methodology. Moreover, implementing a digitalization process can be long, and implies strong participation of the main concerned parties. Finally, some legal departments believe that they are not yet sufficiently familiar with new technologies to launch a digitalization process.
However, the performance gain is concrete, especially with the increase in the workload of legal teams and the appearance of functions such as legal design.
Digitalization is the key to a more efficient legal department
The legal function has taken on an exponential role within the company. From HR processes to contract security to compliance with security standards, the legal department serves as a guarantor of the company’s strategy. However, certain tasks act as a brake on the activity of lawyers and consequently limit the productivity of the company.
This is the case, for example, for legal research and contract drafting. These tasks can be digitized, even automated, and above all shared. With a digitalized legal department, standard contracts can be quickly exchanged and modified. The same goes for legal research, the results of which can be centralized for the entire team.
Freed from this type of task, the lawyer can focus on higher value-added tasks such as contract management and litigation management, consulting, or even HR process management. The legal director becomes a true “business partner” and supports the company’s management by being as close as possible to the strategy.
3. THE DIGITALIZATION OF THE LEGAL DEPARTMENT IS A COMPLEX PROCESS
The digital transformation of the legal department is not a process that can be improvised. However, with the rise of digital and the crisis of 2020, it is urgent. It is crucial to start a digitalization process now to hope to maintain its competitiveness in 2021 and 2022.
The choice to recruit a legal operations officer
The role of the legal operations officer is to accompany the digitization of all the legal function’s poles, in coordination with the company’s other departments. This legal operations officer will generally have a good knowledge of the company and internal recruitment is often preferred. Their legal profile must be accompanied by strong management and coordination skills for cross-functional projects, as well as a very good knowledge of digital technology.
This is a function that is very present in the United States, but which is slow to be established in France. This can be explained by the high cost of these specialists for the company, especially in times of crisis. In France, the trend is to turn to legaltechs, external specialists in digital transformation.
Calling upon companies specialized in digitalization
Legaltechs are new generation companies. They propose to bring digitalization to the legal management of companies, in particular through the automation and dematerialization of tasks. Some of them offer support for the digitalization of the legal department and provide innovative tools. These tools include artificial intelligence (AI), deep learning or contract management automation. Thanks to blockchain and the use of the cloud, company data is digitized and secured, as is dispute resolution (alternative dispute resolution, ADR).
DiliTrust Governance offers a complete SaaS solution for the digitalization legal departments. The available modules are adapted to the identified needs of the company. The solution allows for a simplified implementation of the digitization process, notably thanks to intuitive, collaborative, and ultra-secure tools. Another advantage is access to 24/7 support and training on the tool and digitization.
Finally, using an external solution allows you to approach the process in its entirety, for a faster and more efficient transition. With the economic outlook of 2021, legal departments should look for solutions that guarantee a rapid increase in productivity.