How a legal spend management solution helps non-legal departments
It can be difficult for legal ops to build a business case for new software, especially if higher-ups think the investment will only help your team.
It’s true that the most obvious advantage of modern legal technology is that it makes things easier for the corporate legal department. However, moving away from a legacy system to a current legal spend management solution also benefits finance, sales, IT, and the C-suite.
Use the following information to show how legal spend management solutions help non-legal departments to also succeed, leading to a more productive, collaborative workplace and a stronger bottom line.
Finance gains increased spend visibility
Even though they share overlapping responsibilities, many finance and legal ops teams don’t share a single source of truth for legal spend data. This disconnect leads to frustrating invoice surprises that finance — not legal — has to resolve within the company budget. This limited insight also means finance has to spend a lot of time reaching out to legal and vendors to try to resolve issues.
With a legal spend management solution, finance gains comprehensive insight into legal spend, from seeing the statuses of accruals to spend by timekeeper or practice area. This makes it easier for finance to create accurate monthly and yearly budgets because they know what legal invoice charges are coming in advance, and they can better predict future spend.
This comprehensive data also simplifies creating complex reports, including ones proving Sarbanes-Oxley Act (SOX) compliance to the Securities and Exchange Commission. Piecing together spend data from legacy software, spreadsheets, and conversations with legal ops is much more time intensive and error prone.
By automating the data collection, a legal spend management solution lets finance spend more time drilling down into spend analytics and drawing insights from the report than compiling it. What’s more, top-shelf software also comes with reporting templates to save finance time fulfilling CFO requests.
Enhanced visibility from a legal spend management solution also means that legal ops can take over accruals monitoring from finance — which makes more sense because they work more closely with law firms than finance does. Legal departments can easily check the software dashboard and proactively connect with providers if there’s an unexpected charge, rather than waiting for discrepancies to surface during quarter-end finance reviews. Legal and finance can work more efficiently together to optimize spend, and finance has more time to focus on high-value work.
Sales can streamline contract workflows
Mismanaged contracts cost organizations around 9% of their annual revenue. A robust legal spend management solution with contract review features lets sales and legal proactively work together to avoid these losses.
Without legal technology, there’s a lot of back and forth between sales and legal departments during the contract review process. One of two things usually happens:
- Sales will reach out with multiple questions about whether each contract meets legal standards and has to wait for legal to respond
- Sales tries to expedite the process by looping in legal at the end, only to find out there’s a bunch of issues to be addressed
Both methods are inefficient and cause frustration for both parties (and prospects). A legal spend management platform shifts contract review from reactive to proactive, using automated features to keep sales and legal in lockstep.
Corporate legal teams can enter pre-set contract standards with legal artificial intelligence. Legal artificial intelligence checks new contracts against them and highlights deviations for sales to review. This expedites the review process since sales and legal don’t need to spend time figuring out compliance issues.
Sales also benefits from clause libraries. Clause libraries are databases created by legal departments containing pre-approved alternatives to contract items that are frequently contested in negotiations. Sales won’t get stalled out if a prospect pushes back because they can easily find other options to pitch from the digital library.
Much like finance, sales also benefits from the comprehensive nature of a legal spend management system. Since contract data is in one location and not stored across different platforms, sales can efficiently analyze which contract elements are the most effective. Sales can then share its findings with legal ops and work with them to ensure the companies pre-set standards are conducive to new business.
IT can spend less time on legacy system maintenance
If you ask your IT team to help you shop for new legal spend management solutions, they’ll probably be thrilled. Homegrown and legacy software tools are a logistical nightmare for IT, so the chance to bring on a modern legal spend management solution will be a welcome change.
Legacy software requires significant time and effort from IT to keep it running. According to Hacker Noon, IT engineers “spend 33% of their time dealing with technical debt,” which includes maintaining outdated systems. Not to mention legacy systems can cost companies “up to a 15% budget increase every year for maintenance,” as noted by ModLogix CEO Vlad Vasker. Additionally, homegrown and legacy systems are more vulnerable to costly data breaches because their defense is just comprised of security patches, not comprehensive updates.
Legal technology vendors know that strong data privacy features are critical and will give prospective customers peace of mind, so they include robust cybersecurity protections in their software solutions. This takes stress off IT and will mitigate the cost of a data breach if one happens — Kaspersky found that small and medium businesses “with outdated technology” can lose 54% more money compared to those with frequently updated IT systems.
When IT spends a significant portion of each week patching subpar software and acting as a call center for recurring employee issues, it leads to low morale and high turnover. This is a huge problem for departments that rely on passed-down knowledge to maintain homegrown and legacy systems because it creates a gap that makes it harder to train new members.
Advanced legal spend management solutions are much simpler to work with than old legal software, which means IT can gain time back to focus more on technical innovation and other strategic priorities. This shift to higher-level work will help keep and attract employees.
New legal technology is also typically supported with robust customer service and learning tools, so legal ops has a solid resource to help with issues and employee training. This reduces frustrations between legal departments and IT because it’s a lot easier to resolve any technical issues that arise.
C-Suite members can use data-backed recommendations to inform their decision-making
A Gartner survey of C-suite executives found that 85% of respondents said they’ve made relying more on data and analytics a “personal priority.” However, they struggle with “finding the right type of data,” “accessing quality data,” and “getting clear signals from the data or analysis about what to do.”
An advanced legal spend management solution mitigates these problems by giving legal, finance, and sales end-to-end visibility into spend data. Teams can then take these analytics and transform them into actionable recommendations. This business intelligence gives the C-suite the context and insight they need to make more strategic business decisions.
For instance, by using a legal spend management solution to track vendor metrics, legal ops can give the C-suite data-backed recommendations on who to work with. This means executives can shift away from the historical precedent of making decisions based solely on relationships and move toward partnerships that objectively generate the strongest return on investment.
A legal spend management solution helps legal operations show its value
By introducing new legal software to help other departments improve their performance, your legal department can further establish itself as a team player and trusted business resource across the organization. Request a demo to see how our comprehensive legal spend management platform can transform department efficiency.