As the pace of digital transformation elevates and accelerates towards new heights, businesses may be left nervously on the side-line. Within the legal profession, especially, there is a very well-regarded reticence towards adopting technology. The time is now to reshape and reinvent business models with digitalization. Reviewing what experts counsel as not working is one sure fire way to combat failure and drive competitive advantage, from the outset.
According to Thomas H. Davenport and George Westerman, digital experts, writing for the Harvard Business Review, ‘No managers should view digital- or any other major technological innovation -as their sure salvation’. Yet, the reality is that the future of Legal Departments is a fast approaching digital one.
The Fourth Industrial Revolution is here and according to a recent survey by Deloitte, 94% of respondents agreed ‘that a digital transformation is a top strategic priority for their organizations’ but only 14% of respondents are highly confident that their organisations are ready to fully harness the changes associated with Industry 4.0.
It is safe to assume that business models in Legal Departments need to scale their digital capabilities in a realistic manner. The benefits are numerous for those whose digital ambitions are realised. By transitioning to digital department, legal professionals can improve both internal and external dialogue with stakeholders, to deliver a superior client experience, manage budgets more efficiently and most importantly, improve productivity.
2018 research highlights that for the first time ever, ‘corporate legal departments expect to spend on outside counsel but more on legal IT systems and software’, with the biggest increase in spending was on legal IT systems and software.
So, why are companies failing in their digital transition?
According to Gartner’, Companies using the discontinuous approach [to business model change] achieved 2.25 times the progress of typical firms’. Essentially this means that project success can be explored using an approach that is free from the constraints of current business. Research from the global consultancy group also highlights that organisations who do not have ‘strategic clarity’ on their digital transformation are set to fail. So, what does a successful transition model look like?
A SUCCESSFUL TRANSITION MODEL
The key business model: Gartner advise that to efficiently reinvent your Legal Department through a digital transformation, the following 4 aspects of the business model must be considered:
- Value proposition
- Customer base
- Business capabilities
- Profit Model
If the entire Legal Department understand what investments and initiatives while upholding the importance of the above, the transition will be smoother overall.
- ‘Be Wary’: Digital experts Thomas H. Davenport and George Westerman counsel that ‘executives would be wise to be wary about the siren call of new technological innovation’. In practical terms, shiny and bright new tech trends like AI and IoT should be examined cautiously.
- Do your homework: While it really is the next logical step, Legal Departments need to help their department to build solid knowledge processes and learning about digital tools and platforms. In-house trainings are essential during this step.
- Steady goes the race: it is much better if Legal Departments can make steady progress and reach their end goal while considering the process and avoiding costly mistakes that come with rushing the process. 2018 research found that investment in digital skills and capabilities is taking place, albeit at a slower pace than other industries, with 27% of legal leaders employing technology/innovation counsel and 19% employing a data analytics expert.
DiliTrust Governance is aimed at simplifying the legal management of a business, making daily processes more effective for compliance and legal teams. For more information on using DiliTrust Governance to enable a transition to a paperless legal department, contact us today.