“While the right technology for a given team depends on their underlying priorities, their digital progress to-date, and their own risk posture, legal leaders must also monitor advancements in innovation to guide where they focus their technology investment,” said Hutto. “Focused investment in these areas can unlock the kind of transformational efficiency gains in legal and compliance like we have witnessed in other business functions, such as finance or HR.”
Foundational Systems of Record
The pandemic has driven a proliferation of legal and compliance work even as teams face disruption to their working environments. At the same time, the organizations they support face heightened demands for corporate accountability and transparency. All the while, sophisticated innovations like analytics and AI promise to fundamentally change the practice and business of law, despite perennially remaining 5-10 years away.
Investments in foundational system(s) of record for legal and compliance promise to address all three trends, enabling better capture and reuse of work product, reducing the otherwise ad hoc data capture required for ESG reporting, and building datasets that could unlock the potential of analytics and AI. On the hype cycle for legal and compliance technologies there are several related technologies on or near the plateau that can help create such a system of record of that will benefit directly from one.
“Enterprise legal management (ELM) systems continue to advance and provide a compelling option for pulling basic information out of poor-fit channels like email, personal devices or shared drives,” said Hutto. “Even more important than putting them in place is keeping a team on the same page for how the solution should be used. Only then can they enable more effective information sharing for the post-pandemic era of hybrid work, improve accountability and transparency in the legal organization, and enable predictive analytics capabilities.”
Digitally Enabled Workflows
“Legal and compliance teams face more work to manage than ever before, and the traditional overhead costs are enormous,” said Hutto. “Digitizing the highest volume workflows is both feasible, with mature technologies to do so, and has been shown to have profound results in terms of legal productivity for early adopters – if well managed”
Legal leaders should identify the workloads that are sapping the most time in their departments and target those as a priority. For example, in many organizations, the processes of contract lifecycle management (CLM) are both time consuming and ready for digitization with mature technology to do so. Subject rights requests are another area that can be transformed with technology adoption and currently drain a lot of resources from many legal organizations.
“Leaders should carefully consider where and how to invest in a given workflow – for instance, a CLM solution with a basic intake method and user-driven workflow routing often delivers greater, more consistent value than an overly complex configuration with poor-fit automations that fails to get off the ground,” said Hutto, adding, “Don’t waste the precious time of your team – on top of the cap-ex on a tech solution – trying tackle the wrong opportunities.”
Digital Management of Risk
Regulatory volatility, digital business transformation, increasing cyber risks, and the magnitude of information derived from monitored risk and security activities are straining the ability of organizations to manage risk effectively through traditional ‘analog’ means, and the pandemic has only exacerbated this stress.
“Trying to manage the organization’s risk profile without digital investments is not only needlessly time-consuming, but also inadequate,” said Hutto. “Digital management of risk can help connect disparate processes or stakeholders, deliver unprecedented insight, and will underpin dynamic risk governance – a transformational shift for how organizations should approach risk governance.”
Legal and compliance leaders should look for opportunities to streamline and simplify their risk management and compliance-related activities and improve their understanding of risks through system integration with operational-level data sources, supported by risk program maturity assessment and consulting engagements, as well as augmentation of risk expertise and content through managed services. But companies should approach the replacement of multiple risk management solutions with a single, integrated risk management solution carefully. While such a strategy should reduce overall spending and improve risk mitigation in theory, organizations face immense complexity harmonizing disparate systems and processes and typically must sacrifice some ‘best-fit’ tooling or workflows enjoyed by individual stakeholder groups.
Gartner clients can read more in: “Hype Cycle for Legal and Compliance Technologies, 2021”
Clients and the general public can also register for the complimentary webinar: “Plan Your 2022 Investments with Gartner’s Hype Cycle for Corporate Legal Tech”
About the Gartner Legal & Compliance Practice
The Gartner Legal & Compliance practice brings together in-depth research and analysis, peer-based best practices, metrics and data to offer legal and compliance leaders a platform to make the choices that will drive their business forward and deliver results. Additional information is available at https://www.gartner.com/en/legal-compliance. Follow news and updates from the Gartner Legal & Compliance Practice on LinkedIn and Twitter.