According to the Legal Departments on the Move report, digital budgets have increased by 23%. How can corporate legal departments secure the budget for their digital initiatives?
Times are changing, and they are changing fast. The ongoing COVID-19 pandemic has transformed the opportunities for effective work for corporate lawyers, like many other professions, and brings value to the organization. However, are all these developments reflected in the digital budgets of legal departments?
Nearly a quarter of legal departments have seen their digital budget increase
According to the report, Legal services on the move, by Wolters Kluwer and the European Company Lawyers Association, 23% of legal departments have seen their digital budget increase. It should be clarified that these increases should be seen as permanent and not an ad hoc increase in spending that helped legal services cope in the early stages of the pandemic.
Of those who have seen their digital budgets increase, 20% have budgets under €25,000, 30% have budgets between €25,000 and €100,000, 9% have budgets between €100,000 and €250,000 , and 5% of legal departments have higher budgets. €250,000. 36% do not have a specific digital budget, although they can attest that their actual budget is higher than it was before the pandemic.
In this article, we explore how the legal department can make a business case for digital budgets and, as a result, get the budget they need to investments in legal technologies.
Identify your squeaky wheel
The first step is to identify your pain points, as this will help your stakeholders understand why it is important for the legal department to address that particular pain point. Examples of problems include the costs associated with missing deadlines, losing contracts because it takes weeks to get approvals, and the inability to effectively respond to business requests for contracts. The key here is to specify how your issue affects the business at all levels. You can make a much stronger case for your investment in legal technology when you have numbers to back it up.
Define metrics and KPIs
Stakeholders, especially the CFO, want proof that the digital budget will be put to good use. You must be able to demonstrate how you will measure if you are achieving a return on investment (ROI).
How can you ensure that your digital budget delivers ROI? Make sure it’s focused on the business impact or outcome, not just the needs of the legal department. The truth is, business leaders care most about the impact on the bottom line. For more guidance on calculating ROI, see our white paper on how to prove the ROI of your investment in legal technology.
The role of the General Counsel
The General Counsel plays a dual role in ensuring stakeholder buy-in to the digital budget. The General Counsel must ensure buy-in from the legal team. On the other hand, the legal director must ensure that business leaders are on board with the digital budget, otherwise it will be difficult to achieve the objectives of the legal director’s roadmap. Our article on make the business case for contract management software offers suggestions for gaining stakeholder buy-in.
Want to learn more about how legal departments plan to allocate their digital budgets to invest in legal technology? Detailed results are available in the report, Legal services on the moveincluding the most urgent processes for legal departments to improve, the impact of the pandemic on the functioning of legal departments, and the role of digitalization in ESG issues.