When it comes to improving the legal industry’s digital maturity, all of the respective journeys should be viewed as more evolutionary than revolutionary.
Over the next two decades, AI-driven digital transformations will give general counsels (GCS) and legal teams unprecedented information awareness and insight, freedom from low-value legal functions, and the ability to more easily use complex technologies. And with purposeful, impactful stewardship, artificial intelligence will provide a competitive advantage to organizations demonstrating a broad mastery of this technology early-on.
Still, about 45 percent of automation projects fail to deliver the expected return on investments (ROIs) and profits these days. And the likelihood of surpassing profit expectations is only one in ten on average, according to McKinsey. That’s because digital transformation programs are difficult to execute and therefore, see the same sets of problems. Delivering a brand-new technology – without fully understanding the desired direction for success – is a guaranteed prescription for failure.
The good news is that you can increase the chances that your own digital enablement will beat performance expectations. McKinsey’s recent research also reveals that the most effective digital transformations are “distinguished mostly by the best practices that executives choose to follow.” In fact, by sticking to a well-defined set of transformation practices, you can increase the likelihood of exceeding profit expectations by more than 50 percent. “For established companies, the pressure to digitize business models and products has reached new intensity,” McKinsey says. “The best-performing decile of digitized incumbents earns as much as 80 percent of the digital revenues generated in their industries.”
Simply stated, you need the right situational awareness. It isn’t only about employing a technology like an end-to-end contract management tool. Rather, it’s a matter of thinking about and augmenting your legal services and business models overall. And that means evaluating your legal digital transformation at the very outset.
Measure Success Criteria for Legal Digital Transformation
In the legal sector, digital transformation could be described as a journey from being in a state of readiness to delivering new technology, solutions, and paradigms. But your journey shouldn’t come to an abrupt end at this point. Not by a long shot. The third and final facet of digital transformation involves looking at the success criteria for all business outcomes and measuring the same metrics that you decided to use while getting yourself ‘transformation-ready.’
In other words, it’s easy to get lost in the features and functionalities of a new digital system like a contract lifecycle management (CLM) solution. To avoid this, focus instead on the benchmarks that your legal team and organization set out to meet and exceed in the first place. Your legal digital transformation, in this way at least, should be treated as an ongoing obligation. Here are three specific ways to evaluate your ‘transformation success’:
Focus on Critical Business Outcome Attainment
First of all, look closely at the analytics. Set a clear goal for your legal team to run a discovery phase before generating a report – including statistics – on your own digital expectations. Then create a digital transformation plan and deploy the best possible solution, before keeping track of your critical business outcomes.
Next, you’ll want to show the success of your digital transformation project to the senior leadership team (SLT) – if not the entire organization. After all, everyone wants to hear these particular stories and share in various successes. And digitalizing legal is a very significant one for any business.
Measure and Report on Quantifiable Metrics
As stated above, transformation success is all about measuring the metrics that you’ve already set and endeavoring to hit on or exceed your individual outcomes. It’s also important to employ quantifiable success and failure metrics against a benchmark set.
Although it may be tempting to set excessively ambitious targets, setting the bar too high will demoralize you and your legal team. Instead, think through and lay out what can be reasonably expected of your project within six to 12 months.
Be Willing to Experiment – and Experiment Some More!
Engender a willingness to experiment, remaining open to forgiving occasionally missed targets. Remember that digital transformation in legal is as much about shifting the cultural mindset as introducing whole new processes, ways of working, and technology systems. For this reason also, setting realistic yet aggressive ROI goals and actionable KPI targets is key.
Although digital maturity is a remarkable achievement worthy of any accolade, you need to continue to adapt, as a legal professional, and automate your corporate legal department. You need to be prepared to set off on another transformation journey – whatever that may be – and grow even more digitally mature, as a result.
Indeed, in an industry founded on structure and strict regulations, change can be difficult. But the evolution of GCs and other legal professionals means fully embracing that ‘change.’ Compared to the serious pain of not being able to generate, manage, and analyze contracts during times of crisis, for instance, that of any legal digital transformation is rather inconsequential.
Perhaps most poignantly, digital maturity makes a world of difference when it comes to your legal department’s fitness and preparedness overall.