What is Enterprise Legal Management (ELM)? It’s the practice management and operations strategy of a corporate legal department, as well as the group of technologies that make those operations possible. ELM software is the technology solution that brings together people, processes and information across the legal department and extends to all the internal stakeholders and outside counsel that legal interacts with. It provides everyone in that organization with a single source of truth for legal operations across all practice areas.
Properly implemented, ELM builds a foundation for digital transformation and integrated risk management for the entire enterprise.
“In order to bring about more change within in-house legal departments, they need to break down the silos within their department and across the organization. This is where process improvement and the implementation of the right technology is of paramount importance.”
“Enterprise Legal Management” encompasses the many components necessary to successfully run Legal Operations and fully integrate Legal as a strategic partner for the rest of a business.
What are these components? They include:
- Matter Management
- Spend Management (e-billing)
- Workflow Automation
- Contract Management
- Content Management
- Reporting and Analytics
- Key integrations with other software
While you can read more in-depth about these and other 10 Must Haves for ELM in our free ebook, ideally an Enterprise Legal Management solution should be a single platform that integrates these components. By providing that single source of truth, business leaders are able to make informed strategic decisions and drive toward the KPIs that create meaningful long-term value to the entire organization.
ELM allows the legal department to serve as a hub for innovation and excellence, providing an example of efficiency and responsiveness for the rest of an organization. As well as handling all things Legal.
Who do these components support? Here are just a few of the job roles who stand to benefit the most from an ELM solution:
- Chief Legal Officers
- General Counsels
- Attorneys and Staff Counsel
- Legal Operations professionals
- Paralegals, Administrators, Docket Clerks, Legal IT
- Chief Risk Officers
- Compliance Teams
- Corporate Secretaries
- Boards of Directors
- Senior Management
- The Legal department’s relationship with outside counsel and other partners
As I mentioned in an interview with Law360:
“Offering legal services and legal best practices is really not so much about just running a legal department anymore. It’s about being a strategic advisor and a manager of operations with the rest of the company.”
Having an integrated, streamlined system in place helps Legal become that strategic advisor.
Why Legal Teams Need ELM
As businesses grow, many legal teams are under pressure to control spend and maintain work quality, gain visibility into the entire legal department and drive more high-value work from attorney staff. But you simply cannot gain this type of visibility and insight for the entire department by simply using manual tools such as emails and spreadsheets.
No less than 82% of respondents to a recent HBR Consulting survey stated their legal needs would increase in the next year. Yet at the same time, they’re also being pressured to be more productive, responsive, and mindful of costs.
The only way to do more with less is to have the right processes – and technology – in place to make your department run as efficiently and effectively as possible. Thereby freeing up your team members to focus on what they’re actually getting paid for – to do the work of legal.
How do corporate teams handle these increased demands in Legal? By turning to a more streamlined, automated, integrated solution – Enterprise Legal Management.
“Legal departments today are expected to run like a business. They need to be efficient, deliver quality services at the right price, develop the talent on their teams, leverage data and analytics to make the best decisions possible and secure the best outcomes possible.”
How does ELM help manage these increased demands so Legal can run more like a business? Three ways. This type of solution should empower Legal to:
- Better manage data and information
- Automate processes
- Take action on insights
Now let’s take a closer look into each.
1 – Better Manage Data and Information
Cybersecurity breaches, incomplete matter data, lost opportunities for eliminating poor-performing firms – what do these three things have in common? They are all possible results from insecure, disparate, nonstandardized systems and processes.
Because, let’s face it. Not having a secure system in place from which to manage, store and locate your data leaves your Legal team open to significant risk, which could have disastrous consequences if the wrong information gets lost – or worse – ends up in the wrong hands.
Aside from mitigating risk, what are the benefits to better data management?
“It’s designed to improve reporting, decision-making and making sure we deliver maximum value for organizations,” McGovern explains.
All legal departments traffic in tremendous amounts of data. This data comes from a wide variety of sources, including matter files, emails, documents, invoices, legal research, contracts, patents, employee incidents and claims. While management of this data can seem overwhelming, it could also be your greatest untapped resource for driving legal improvements and achieving results.
So it’s important to have it all in one place.
2 – Automate Processes
According to a study by Hobson & Company, corporate legal departments face two key challenges today:
- A lack of standardized processes
- Inefficient systems for managing outside counsel
These two challenges are closely intertwined, since a lack of standardized processes often leads to inefficient management systems.
How can Enterprise Legal Management help solve these challenges?
- Through streamlining processes, it can cut operational efficiency costs significantly. For instance, ELM can reduce the effort to open and assign new matters by as much as 75%.
- Through better managing outside counsel, it can reduce external legal spend by 5-10% annually.
- Through knitting collaborators together with workflow automation, it can save companies up to $3.1 million.
Having these standardized processes in place also reduces or eliminates the risks of manual errors and oversights such as overlooked emails or forgetting to add necessary data to a matter file.
By centralizing data and approved assets (like standard clauses and forms, for example) in a single location, with a standardized process in place being used by everyone, legal teams can see real benefits – both to their operations and to their bottom lines.
3 – Take Action on Insights
While housing your data in a single source of truth is incredibly important, simply having data isn’t much good if you can’t actually use any of it. That’s where the ability to drill down into the data housed within your ELM system to get actionable insights becomes key.
As my colleague, Kirk Sadler, the Director of Product Management at Mitratech, says:
“Clients should be able to transform their data to answer questions of interest to them. They should be able to get actionable insights in real-time to help them improve their Legal Operations.”
Some examples of using your ELM data to drive real value for Legal? Here are a few possibilities:
- Create “what-if” scenarios. Legal teams should be able to use the wealth of financial data stored in their ELM to create “what-if” scenarios. This could include calculating the average billing rate of timekeepers by timekeeper level on specific matter types or by phase of a matter.
- Track work for volume discounts. ELM data should enable you to track the volume of work assigned to outside counsel. That way, you can take advantage of Alternative Fee Arrangements (AFAs) and negotiate volume discounts as the amount of work goes up.
- Speed up patent or trademark process. For technology companies, being able to move patents or trademarks forward more quickly is pivotal to gaining an edge over the competition. Being able to get actionable insights from your ELM data can help you understand who the most efficient partners are, which internal resources get stuff done the fastest, and who has knowledge for the next type of patent you need.
While these are just a few possibilities, the true potential for actionable data is practically limitless.
“It’s about efficiency, but efficiency isn’t the end goal. If you can do an analysis efficiently, you can take action that will have an impact sooner. That is where the true power lies.” – Mitratech VP of Sales Operations, Karen Oxenford-Melcher
ELM adoption is growing rapidly because it’s a solid answer to the challenges faced by today’s legal departments. It provides visibility, proof and demonstrable evidence of legal best practice. The alignment created between legal and the rest of the enterprise unlocks opportunities for organizations to understand and, according to appetite, either take on or avoid risks that can create a competitive advantage in their perspective markets.
Looking for more on Enterprise Legal Management? Here are some resources you might find helpful:
- 10 Must Haves for Enterprise Legal Management
- What is Matter Management?
- The AIG Story: Building the World’s Largest Legal Management Platform