Legal and compliance leaders can tap myriad technology solutions today to help them in their key mandates to manage risk and facilitate the business's digital transformation. Few do yet, but the tech marketplace is full of innovations to watch in automation, analytics, artificial intelligence and other emerging technologies.
“Companies must invest in legal technology more aggressively — but more importantly, they must invest more effectively,” says Zack Hutto, Director, Advisory, Gartner. “Otherwise, legal and compliance functions will remain a drag on productivity and responsiveness.”
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Trend 1: The rise of virtual legal assistants
Gartner predicts that by 2023, virtual legal assistants (VLAs) will field 25% of internal requests to legal departments at large enterprises, increasing operational capacity for in-house corporate teams.
Legal departments need to automate where possible to improve efficiency and lower response time. “The technology marketplace is filled with solutions to replace human resources, but these tools cannot automatically accommodate a given organization’s unique legal requirements or workflows,” says Hutto. “Legal and compliance leaders must consider the specific operational capabilities they want to improve when evaluating technology opportunities.”
“ The effective use of VLAs depends on corporate legal and compliance leaders playing an active role in the configuration”
VLAs, or AI-powered chatbots, are positioned to field the increasing volume of internal questions that legal departments expect in the coming years, reducing response time and the need for human interaction. When VLAs can’t answer, they can route questions to the appropriate resource and provide preliminary information that will aid a lawyer in quickly and appropriately answering.
However, the effective use of VLAs depends on corporate legal and compliance leaders playing an active role in the configuration or creation of these tools to meet their company’s specific needs.
Trend 2: Fill the legal technology expertise gap
Gartner predicts that by 2023, 33% of corporate legal departments will have a dedicated legal technology expert to support the increasing automation of core in-house workflows.
Today, a large delta exists in legal departments between those who have knowledge on legal matters and workflows and those who understand technology.
Dedicated legal technology experts — or those who have a good understanding of both legal service and technology — will be a key role for legal departments to improve performance. Leaders will need to hire and develop these roles to close the gap.
Learn more: Legal Technology
Trend 3: Increase coordination for third-party risk management
Gartner predicts that by 2023, organizational spending on third-party risk management technologies to support due diligence and monitoring will increase by 50%.
Digital business transformation amplifies the risks associated with third parties. Third-party risk management (TPRM) today is fragmented across legal, compliance, privacy, procurement, supply chain, quality, finance and IT. Moving forward, the organization must pull together the ownership structure for TPRM and force consolidation of the TPRM technology and service provider marketplace. This consolidation will enable organizations to have a unified view of risks.
Read more: A Better Way to Manage Third-Party Risk
Trend 4: Increase investment in privacy tech
Gartner predicts that by 2023, there will be a 150% increase in internal legal counsel investment in dedicated solutions to handle subject rights requests (SRRs) on behalf of clients.
Increased privacy regulations, like the Global Data Protection Regulation (GDPR) in Europe or California's Consumer Privacy Act (CCPA), have created an overwhelming number of SRRs. “Teams must not only act within the given time frame but must also consider the resources required for what can be a time-consuming manual process,” says Hutto.
The number of SRRs is expected to increase, and current processes take too long and require too many resources. According to the latest Gartner Security and Risk Survey, organizations spend, on average, $1,406 per SRR. Eighty-three percent of respondents needed at least a full working week to respond to each request. Automation will be required to support departmental scale and meet regulations.