What is enterprise legal management and how to choose the best software?
Enterprise legal management (ELM) is becoming more and more important as legal budgets continue to grow, companies expand, and new technologies are introduced. The Legal Department Operations (LDO) Index indicates over half of the corporate legal departments they surveyed are now deploying and managing nine different software solutions for various in-house legal team needs. 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 evergreen.
To automate workflow processes and increase productivity and transparency, most general counsel in large organizations rely on some form of enterprise legal management software. Before we go into the details about selecting the right software for you, let’s first define what enterprise legal management is and how it helps corporate legal departments.
What is enterprise legal management?
Enterprise legal management is the operation and administration of both the responsibilities and strategies of a corporate law department. ELM refers to a wide range of tasks — from legal e-billing and spend management to budgets and matter management; from finances and legal operations to intellectual property and securities.
The easiest way to think about ELM is to start by reflecting on the types of work a corporate law department typically undertakes or supports:
- Litigation and disputes
- Intellectual property and trademarks
- Mergers and acquisitions
- Legal compliance and governance
- Some parts of employment, claims, real estate, procurement, and sourcing
For each of the above, there is software that helps with the doing of the legal work and there is data that supports the reporting and managing of legal work. The doing versus the reporting is an important distinction: one drives efficiency and the other aligns to data-driven decision making and demonstrating value to general counsel stakeholders. Which one to prioritize is an important decision in any ELM strategy and will be determined by the needs of stakeholders and objectives of the team: transparency, costs, or efficiency.
Simplest statement of ELM: if it’s part of the remit of your general counsel or chief legal officer, ELM software helps your law department to both get work done as well as deliver data, reports, and analytics to properly represent the team with executives and board members.
How can ELM software help legal departments?
For each of the legal teams within an in-house law department, ELM software best supports the jobs of 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/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: Monitor the inventory, details, and status of matters.
- Matter budgeting, finances, document management, the firms and individuals assigned to a matter, collaboration, status, outcomes, and the tasks of a matter.
- Includes end-to-end completion of an individual matter from intake to planning, through execution to closing.
- Includes end-to-end management of the whole collection of all matters, including budget, status, legal spend, and key performance metrics, with the ability to slice the data by department, geography, firm, matter type, or any other need.
- Contract lifecycle management (CLM): Draft, review, negotiate, approve, and reach signature of individual contracts as well as store, report, and analyze the full set of contracts.
- Document storage, document management, contract templates, analysis and insights which are often powered by AI, collaboration, and e-signature.
- Includes end-to-end execution of an individual contract from initiation, drafting, review, and negotiation to approval and signature.
- Includes end-to-end management of the whole collection of contracts such as storage, management, key performance metrics, and insights across the whole body of contracts.
- Data and performance reporting: Slice and dice all legal spend and matter management data to demonstrate the performance of firms, individuals, and teams, as well as the entire law department.
- Easy access to data, report templates, visualizations, dashboards, key performance metrics, and the ability to merge data with other enterprise systems — be it 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 to compare actual costs versus expected costs, and performance data to compare your law department vs 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 or deviation to best practices, measuring the performance of the plan against the achieved outcomes, and — ideally — the ability to learn both from peer data as well as your own 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, and potentially licensing and royalties.
- Compliance management: Monitor, implement, and prove compliance with regulations, legal guidance, and enterprise code of conduct.
- Privacy and regulatory compliance, environmental, social and governance (ESG), ethics, employee training and acknowledgement of business practices, and tracking adherence to compliance.
- Legal risk management: Demonstrate risk and exposure both in outlier high profile cases as well as in aggregate 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.
Many different pieces of software or technology can help automate processes, provide AI insights, increase efficiency, improve collaboration, and improve data accuracy. Developing an ELM strategy that is smart, open, and connected will enable the flexibility to adapt to changing business priorities.
Looking at enterprise legal management all at once can be daunting. No single piece of ELM software is going to 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. It’s best to start small and iterate based on the priorities of the team and the needs of the stakeholders.
How to choose the best enterprise legal management software?
For most in-house legal teams, beginning with a legal e-billing solution and getting started with legal matter management will enable the first meaningful reports and decisions. These two items act as the foundation for expanding into the more advanced facets of legal spend management and matter management, as well as analysis of legal operations.
Contract teams will also take law departments down the path of document storage and secure file sharing, which could use existing enterprise document sharing tools or could use a fit-for-purpose document management system (DMS), readying the team for future AI and contract lifecycle management use cases.
The most important consideration is that your enterprise legal management solution choice can grow and change along with your needs. Prioritize APIs, open standards, partnerships, and connectivity to allow your software to bend and shape, being as malleable as your law department. The entire legal tech stack does not need to be solved on day one, but choosing the right ELM software as the foundation of the stack is critically important to realizing both near-term success and long-term growth.
The best ELM software is the solution that 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 the constant tension and decision between performing work in-house or engaging outside counsel. Not all problems need to be solved all at once, some maybe never 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.
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