May 08, 2020

 Sharath Beedu

general counsel Consulting elm efficiency law department law firm legal ecosystem collaboration

Here’s a terrifying thought: what if our best practices and new initiatives have created new problems? When it comes to Enterprise Legal Management (ELM), your law departments and law firms may now be going through this nightmare scenario. Many law organizations are following what they believe to be the best path to technology-led process automation when, in reality, they need to rethink, adapt, and adopt a more holistic approach to ELM.

How did we get here? In the preceding decade, legal work experienced a sizable shift. With increasing pressure to reduce costs, “business as usual” –blindly paying invoices, letting firms handle matters as they saw fit–was no longer an option.  General Counsel sought transparency from outside firms regarding work performed, and the rationale for that work. Law departments began to bring work in-house and to select different firms to handle different types of matters. Various point solutions arose in response to the need to provide General Counsel with the information they sought to control spending. Initially, each point solution was novel and game-changing and became entrenched in its specific silo.

Why has this approach to ELM still left many law departments struggling? To begin with, coordination across teams is complicated. Inefficient and ineffective channels of communication can delay and jeopardize business goals. This leads to a perception that the law department is impeding business success, rather than adding value and helping a business achieve critical objectives. Siloed operations result in deterioration in transparency across multiple teams and systems until it’s impossible to determine what each team is doing, how they are performing against budget and the status of each matter. Confusion creates risks and results in unpleasant surprises. Finally, cost pressure has intensified. While law departments are doing more with smaller staffs, new efficiencies are proving elusive—the decisions of general counsel are more visible today, including the struggle to control legal spend. Technology point solutions have resulted in a collection of disconnected systems and dashboards without a clear, 360-degree view of the legal work across internal and external teams.

The solution to these problems begins with re-conceptualizing the relationship between law departments, law firms, and law companies as a legal ecosystem rather than an assembly line of separate entities that act autonomously. ELM has been synonymous with Enterprise Legal Management – the command-and-control approach, aided by process automation. By viewing legal services and operations as an interconnected ecosystem, we think of the ELM as Ecosystem Legal Management. The new ELM, built with an understanding of the interplay within and between different law organizations, directly addresses the problems associated with legacy ELM.

The new ELM is an interconnected platform that connects various point solutions, some of which are best-of-breed while others do “just enough.” An ELM built on such an inter-operable platform allows common data to flow between systems and makes it possible to start seeing more than just incremental value from multiple systems. It enables real-time collaboration and coordination among in-house and firm professionals; it allows for seamless communication, free from interruptions and delays, and delivers total transparency across all matters. It provides machine-driven insights into legal operations that make timely and value-based decisions possible. This new ELM,  Ecosystem Legal Management, should be the approach that law departments can adapt to experience significant operational and economic benefits.

The only way to escape a nightmare is to wake up. General Counsel are waking up to the new ELM.