The goal of adopting legal technology is to provide business, and not legal, value to a firm. A transaction management solution cannot stand in for lawyers’ expertise. It does, however, make repetitive tasks a lot easier and quicker to perform. The value legaltech solutions provide is financial – they save firms time and money on matters and help them build a stronger brand in the long-term.
A transaction management solution also makes it easy to involve all stakeholders and legal teams, but also managers and firms’ business units. Legal operations are completed faster, which means less costs, more revenue and heightened competitiveness for companies.
A recent study revealed firms that had invested in technology – like software that allows lawyers to monitor matters’ progress in real time, or tools that let clients directly perform tasks without active participation from lawyers – showed better financial performance than firms that hadn’t.[1]
Outlined below are the main ways in which you can assess the (highly positive) ROI of transaction management software.
Legal transaction management tools are designed to simplify and accelerate the transaction process. By using platforms like Closd that allow parties to exchange information rapidly and accurately, manage workflows, and seamlessly execute closings remotely, lawyers avoid the cost of losing precious billable hours and of administrative expenditures:
Using a legal technology tool like a cloud-based transaction management platform significantly reduces these costs; at the same time, the costs of implementing and using such platforms are relatively low. They amount to:
Legal technology also provides a ROI that is less immediately tangible; it takes longer to become apparent, but brings huge returns for a firm. This can be summed up as benefits that help boost a firm’s image, and with this bring in more clients and retain staff:
Combined, the points outlined above provide a picture of the highly positive return on investment in legal technology for firms. This calculation would need to, of course, consider adoption rates and ramp-up times, considering the number of lawyers using the technology impacts effectiveness, and the benefits are greatest if all lawyers begin using it quickly and exclusively. But considering these myriad benefits allows firms to roughly calculate the gain from their investment, from immediate to projected longer-term advantages. Firms can expect a high ROI: Wolters Kluwer reports that firms that use more technology not only outperformed non-technological firms “across all areas of preparedness related to technology, staffing, organisational and client focus”, but 62% of these firms “reported that their profitability increased over the prior year”, compared to only 39% offirms that were transitioning to technology use.[12]
[1] 2016 Report on the State of the Legal Market https://www.thomsonreuters.com/content/dam/openweb/documents/pdf/corporate/press-releases/2016_pm_gt_final-report.pdf
[2] Law Firms are Inefficiency Factories, Innovation is the Cure https://www.artificiallawyer.com/2018/06/11/law-firms-are-inefficiency-factories-automation-is-the-cure/
[3] Law firms slow to embrace ‘new’ technology due to a lack of desire and motivation to change https://www.lexisnexisinteraction.co.uk/blog/2016/01/07/law-firms-slow-to-embrace-new-technology/
[4] Performance Drivers and Change in the Legal Sector in 2020 https://www.lexology.com/library/detail.aspx?g=5a7d853f-5168-4112-91ff-fb384a7f6ec4
[5] Why are so many law firms trapped in 1995? https://www.theatlantic.com/business/archive/2015/10/why-are-so-many-law-firms-trapped-in-1995/408319/
[6] 2020 Report on the State of the Legal Market https://images.thomsonreuters.com/Web/TRlegalUS/%7B169f0d36-6fcd-4cc1-bd84-878b713055cb%7D_2020_Report_on_the_State_of_the_Legal_Market-191231.pdf
[7] Reinventing the Law Business: How To Train Associates https://abovethelaw.com/2015/04/reinventing-the-law-business-how-to-train-associates/
[8] Performance Drivers and Change in the Legal Sector in 2020 https://www.lexology.com/library/detail.aspx?g=5a7d853f-5168-4112-91ff-fb384a7f6ec4
[9] ABA TechReport 2020: Cybersecurity https://www.americanbar.org/groups/law_practice/publications/techreport/2020/cybersecurity/
[10] The Risks of Technology Incompetence https://www.americanbar.org/groups/gpsolo/publications/gp_solo/2019/november-december/risks-technology-incompetence/
[11] Beneath the Surface of a Cyberattack – A Deeper Look at Business Impacts https://www2.deloitte.com/content/dam/Deloitte/us/Documents/risk/us-risk-beneath-the-surface-of-a-cyber-attack.pdf
[12] Performance Drivers and Change in the Legal Sector in 2020 https://www.lexology.com/library/detail.aspx?g=5a7d853f-5168-4112-91ff-fb384a7f6ec4
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