What is enterprise legal management and how to choose the best software

Enterprise legal management (ELM) is becoming increasingly important as legal budgets continue to grow, companies expand, and new technologies emerge. The responsibilities of general counsel are growing, the expectations for delivery and operational efficiency are increasing, and the ask to control costs and budgets is constant.

As a result, general counsel in large organizations must use enterprise legal management software to automate workflow processes and increase productivity and transparency. "GCs must anticipate not only changes in the legal profession, but also what trends may be impacting the business more heavily," according to Thomson Reuters 2024 State of the Corporate Law Department report.

What is enterprise legal management?

Enterprise legal management is the operation and administration of a corporate law department's responsibilities and strategies. It includes a wide range of tasks, including legal e-billing, spend management, budgets, matter management, finances, legal operations, intellectual property, securities, and more.

A corporate legal department typically undertakes or supports numerous types of matters, including:

• Transactions
• Litigation and disputes
• Intellectual property and trademarks
• Mergers and acquisitions
• Licensing
• Securities
• Legal compliance and governance
• Portions of employment, claims, real estate, procurement, and sourcing

ELM software automates these and other tasks and produces data that supports the reporting and management of legal work. However, doing versus reporting is a crucial distinction to make: one drives efficiency, while the other aligns with data-driven decision making and demonstrates value to general counsel stakeholders.

The needs of executives and the objectives of the team drive ELM priorities. According to the State of the Corporate Law Department report mentioned earlier, these priorities generally fall into four categories:

• Effectively advising the business
• Efficiently operating their functions 
• Protecting the business from risk
• Enabling the growth of the business

ELM software helps a law department accomplish its work in all four areas while delivering data, reports, and analytics on that work to stakeholders, executives, and board members.

How can ELM software help legal departments?

Using technology to simplify workflow and manual processes is a high priority, according to 72% of the 2023 Legal Department Operations Index respondents: "A well-known cliché holds 'you can’t manage what you don’t measure.' Unfortunately, for many LDO professionals, many metrics, outside of those related to costs, are not routinely tracked."

For each legal team within an in-house law department, ELM software best supports legal spend management, legal matter management, contract lifecycle management, reporting, legal analytics, knowledge management, intellectual property management, compliance management, and legal risk management.

• Legal spend management. Track, analyze, and optimize in-house and outside counsel costs:
  • E-billing and invoice review and approval, with audits supported by artificial intelligence (AI)
  • Firm or vendor management, supporting firm selection, enterprise procurement goals, and diversity and inclusion (D&I) objectives
  • Timekeeper rate management supported by peer benchmark data
• Legal matter management. Monitors the inventory, details, and status of matters:
  • Matter budgeting, finances, document management, and individuals assigned to a matter, collaboration, status, outcomes, and tasks
  • End-to-end completion of an individual matter from intake, planning, execution, and closing
  • End-to-end management of all matters, including budget, status, legal spend, and key performance metrics, with the ability to segment the data by department, geography, firm, or matter type
• Contract lifecycle management (CLM). Draft, review, negotiate, approve, and sign individual contracts and store, report, and analyze the complete set of contracts:
  • Document storage, document management, contract templates, analysis, and insights that are often powered by AI, collaboration, and e-signature
  • End-to-end execution of an individual contract from initiation, drafting, review, and negotiation to approval and signature
  • End-to-end management of the entire contract collection, including storage, management, key performance metrics, and insights
• Data and performance reporting. Analyze legal spend and matter management data to determine individual, team, and departmental performance:
  • Easy access to data, report templates, visualizations, dashboards, key performance metrics, and the ability to merge data with other enterprise systems through API, ODATA, or tools like Excel, Power BI, or Tableau
• Legal analytics. Apply business intelligence and strategies derived from data, trends, and analysis to support data-driven decision-making:
  • Insight and recommendation on budget, spend, rates, outcomes, and benchmark data examining actual versus expected costs and performance data, comparing your legal department to peers or competitors
• Knowledge management. Use best practices in contracts and matters curated from thousands of repetitions:
  • Research, templates, checklists, clause libraries, best practices, adherence to or deviation from best practices, and measuring the plan's performance against achieved outcomes to learn from peer and historical data
• Intellectual property (IP) management. Manage, protect, and defend intellectual property such as inventions, patents, copyrights, and trademarks:
  • Idea capture, research, drafting, filing, portfolio management, prosecution, licensing and royalties
• Compliance management. Monitor, implement, and comply with regulations, legal guidance, and enterprise code of conduct:
  • Privacy and regulatory compliance; environmental, social, and governance (ESG); ethics; employee training; acknowledgment of business practices; and tracking adherence
• Legal risk management. Demonstrate risk and exposure in high-profile cases and across the full set of matters and contracts:
  • Identifying and quantifying worst-case scenarios versus actual outcomes across transactions, licenses, litigation, regulation, and privacy, demonstrating mitigated risk to general counsel stakeholders

Looking at enterprise legal management all at once may seem daunting. Many technology systems can automate processes, provide AI insights, increase efficiency, improve collaboration, and improve data accuracy. No single piece of ELM software will do absolutely everything, nor are all in-house counsel, chief legal officers, or legal operations teams ready to implement all parts of their ELM strategy at one time.

Start small and iterate based on the priorities of the team and the stakeholders. Developing a smart, open, and connected ELM strategy will provide the flexibility to adapt to changing business priorities.

How to choose the best enterprise legal management software

When selecting an enterprise legal management software solution, it is vital to consider whether the platform can grow and change to meet your needs. Prioritize APIs, open standards, partnerships, and connectivity to allow your software to scale along with your legal department.

For most in-house legal teams, an e-billing solution and legal matter management will produce meaningful reports and decisions that are the foundation for legal spend management and analysis of legal operations.

Document storage and secure file sharing using existing enterprise document-sharing tools or a fit-for-purpose document management system (DMS) will prepare the team for future AI and contract lifecycle management use cases.

While you don't need to have your entire legal tech stack in place on day one, choosing the right ELM software as a foundation is critical for near-term success and long-term growth. The best software solution meets both your current needs and your future aspirations. 

Build your ELM strategy

Every legal team and law department will have different needs and different priorities regarding what they need from an enterprise legal management software. There will forever be constant tension and decisions regarding whether to perform work in-house or engage outside counsel. Not all problems need to be solved all at once; some may never be solved at all.

Know what’s possible and develop an ELM strategy that best enables the team to simultaneously facilitate and protect the business, all while controlling legal costs.

Looking to build an enterprise legal management strategy? We can help. Learn more about the solutions that meet your ELM needs.