This article originally appeared on Law360 under the title, How Law Firm Leaders can optimize their tech investments, authored by Simon Whitburn, GM and SVP of International Business at Exterro.

Legal technology is helping expedite case processing by enabling processes to become more streamlined and efficient. 

Among larger firms, there's been a rush to the top as firms seek to tool up in order to create a better client experience and increase client retention. They also stand to make significant cost savings by bringing the 50 to 60 functions they outsource on average in house. 

So how should they determine where and how to invest when building out the technology stack? What constitutes success, and how are legal teams evaluating these solutions? 

The legal technology stack is a term used to refer to the array of digital tools that together help automate the workflow processes of the legal firm or in-house legal team within large corporates. It will typically comprise financial and administrative tools to help expedite billing but also legal case management software that make it easier to carry out tasks such as document labeling and review. While these solutions should in theory be integrated the reality is many operate as point solutions, in which case they can tend to act as data silos. 

Legal Leadership 

There is a mind-boggling array of solutions available to handle processes such as e-discovery, data privacy and compliance obligations. Consequently, there's a need to focus and pinpoint exactly where automation is needed. But how should you go about creating a lean set of business tools? And how do you do this in a way that future proofs the business? 

Firstly, focusing legal tech investment requires a clear view of what you are looking to achieve. Leaders can start by identifying the most critical processes in their departments, and assess their respective costs. This will allow for prioritization in terms of the largest available savings. Ranking by business visibility is useful too.

Second, speaking to colleagues in similar positions at other firms can be invaluable in understanding which projects are most realistic. If in a dozen conversations, nobody enthuses about their successful transformation exercise in a specific area, it's possibly a tough nut to crack. Conversely, it may be that many colleagues can point to provable savings made on a particular workflow, suggesting that a mature market is addressing a solved problem. There's nothing wrong with being the first to solve a difficult problem, of course.

With a set of potential projects identified, it's a good time to go to market and have the vendors show you their wares. It's worth spending some time on this exercise even if the plan is to turn the project itself over to consultants or integrators. This way, you learn the lie of the land. 

Again, have the vendors introduce you to reference accounts early on. If they can't, that's telling — and if they can, you can learn much from the implementation war stories. Taking the lead and spearheading the adoption of technology isn't something legal practitioners are particularly comfortable with, as attested to by Gartner in its report "The Future of Legal: Six Shifts GC Must Make by 2025." This found that only 9% of respondents believed they could create a cohesive, long-term plan for digitizing the legal department. 

Moreover, legal practitioners often don't feel they have the bandwidth to assess how well solutions are performing in order to gain this oversight. In the Henchman report "8 Experts Predict Legal Tech in 2022,"contributors from various legal backgrounds make the point that they'd ideally like to have a wash-up at the end of the year to determine what worked and what didn't, and where value could be added. 

The participants also commented that without someone with both legal and technical acumen, the law firm tends to be at the mercy of software vendors, and this makes it far less likely they'll independently assess the merits of solutions and establish an effective road map. The Gartner report suggests the way to resolve this is to involve all stakeholders, allowing a top-down approach to be taken to evaluating the effectiveness of technologies. But by following these simple steps, legal leaders can identify transformation projects that are aimed at improving expensive, business-visible workflows, and are likely to succeed. 

Picking projects that fit well with each other and are susceptible to a holistic approach — perhaps they all depend on having an evergreen data map, for example — can help leaders articulate a well-defined plan for digital transformation, along with defined metrics for measuring success. Finding vendors that fit in with the overall vision as well as providing point solutions is the last piece of the puzzle. 

Costly Decisions 

A lack of oversight can prove costly if the team fail to establish the best solution for the business with regard to the automation of each specific workflow. One means of mitigating risk is to avoid big bang wholesale change. Moving a previously paper-based system onto a specific technology platform in one go can be disastrous if edge and corner cases have not been sufficiently identified and analyzed. 

The legal space is littered with shelfware — big systems lying unused because they can't cope with the vagaries of real-world inputs. Instead, a modular, piecemeal approach can drive change far more effectively. Take one simple element of a workflow and automate that successfully. Suddenly, teamswill be asking or demanding to save time and effort on their steps in the process — helping with change management. 

Work with vendors who can roll out a solution piece by piece, showing the advantages and savings along the way. Not only is the project more likely to be successful, but license fees are likely to be spread over several financial periods. This divide and conquer strategy also leads to a better understanding of the underlying business processes — and that can pay dividends by allowing leaders to choose best of breed point solutions for each step, ensuring one leads seamlessly into the next — rather than choosing an end-to-end solution that may not be the best answer at any particular point. 

E-discovery, for example, is well described by the Electronic Discovery Reference Model. In recent years, vendors have competed to offer end-to-end solutions, from collection through processing, analysis and review to production. But identification, preservation and collection are really the preserve of information governance, and can most efficiently be done under that aegis. Processing and analysis depend on compute resources and skills such as machine learning, while review is fundamentally a user interface or user experience problem. Improving each step separately, perhaps with different point solutions, can lead to much better overall outcomes than committing to a single tool, which may or may not be next year's flavor of the month. 

A Future-Proof Road Map 

Determining what works best is therefore paramount, but the legal team also needs to keep one eye on the future to plan the technology road map. They will need to consider how future workloads are likely to manifest themselves and make provision for these. For example, the Association of Corporate Counsel's "2022 Chief Legal Officers Survey"found that respondents expected to see more legal resources devoted to financial transactions as well as regulatory enforcement with respect to overseeing cybersecurity compliance, data privacy and environmental, social and corporate governance issues. 

Planning for the future will also require some appreciation of how technology is evolving and what newcomers such as artificial intelligence bring to the table. Today, AI is largely used to free up legal time in various ways. It's used to prioritize documents for human review, review incoming productions, perform a secondary review of lower priority documents or to provide quality control for human reviewers. Yet these don't really play to the strengths of a technology that can significantly aid and assist the practitioner. For instance, if we use the example of e-discovery once again, AI can be used in early case assessment to spot hidden concept clusters, communication patterns and custodian relationships. This can help get to the facts of a matter faster, while also yielding downstream cost and time savings.

Predictive coding, a supervised machine learning process, is also being used in document review in the form of supervised machine learning, using human-provided seed sets, but in the future it will be entirely unsupervised, so that the AI will look for patterns in the data — both similarities and disparities — unaided, which will then be flagged to a human for review. 

Legal leaders are in some ways fortunate that legal practice can be slower than other parts of the business in terms of technology adoption. They can afford to wait and see which technologies deliver real value. Online courts are an obvious example, whereas the judgment of small claims by automated AI is perhaps an idea before its time. They should therefore:

• Keep a weather eye on new technologies used in the business generally, including AI, machine learning, virtual reality, augmented reality or even robotics;
• Ensure that their team is tasked to consider applications of these technologies within the legal sphere; and
• Most importantly, always have in mind upcoming changes in the role of the legal department within the business — changing interface provides great opportunities for efficiency and effectiveness improvements.

Investment in such technologies is likely to drive spend over the next few years, with Gartner predicting that technology budgets will increase threefold through to 2025. That forecast was made prior to the series of economic shocks we've seen throughout this year, and which are expected to last into next year, can be expected to focus hearts and minds on cutting costs. 

Achieving that will require legal teams double down on their efforts to bring processes in-house, but we can also expect to see more emphasis on the needs for technology to play nicely together. Integration is likely to become much more pressing, particularly now that teams have become more au fait with using tools during the pandemic that allowed them to collaborate more easily. This has fueled the appetite for a seamless experience in legal tech.

Simon Whitburn is general manager and senior vice president of international business at Exterro Inc. The opinions expressed are those of the author(s) and do not necessarily reflect the views of their employer, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.