The speed of change in AI is overwhelming, and the potential for in-house legal teams empowered by AI is enormous. The release of Claude's Word add-in in the past week is just the latest example of how quickly things are changing the opportunities for in-house legal teams.
However, most legal teams are not ready for it. If anything, I suspect the sense of paralysis many already feel will increase, as they worry more about making the "wrong" choice.
The state of the New Zealand In-House Legal Market
This year, I have met with many in-house legal teams across New Zealand, so I have a very good feel for the market, from large legal teams to sole legal counsel.
Most have made very little progress in the past few years. Documents remain stored in shared drives; emails are stuck in individual Outlook accounts; and Excel spreadsheets are used to store important matter and contract data.
There are several factors behind this, which I will cover in later posts, but most people are aware that things could be a lot better and want to make improvements. They just don't know how.
There are several very good legal matter management platforms available on the market, and most of these teams are aware of them. They haven’t adopted one of these platforms for several reasons. For some, it is a question of budget: despite the strong return on investment that should be possible from these platforms, they are unable to make the business case for the investment required.
In other cases, securing approval from other stakeholders, particularly IT, is a problem. They haven't been able to make the case for why they are being held back by current systems or for the value to the organisation of addressing the issues.
The largest factor is a lack of time to truly understand the range of possible outcomes, and the particular outcomes they would like to achieve. The analysis needs to go beyond aspirations to do more interesting and valuable work and to show genuine business benefits, spanning the organisation, not only within the legal team.
This lack of clarity makes it very difficult to know what technology you need, how you would use it, how much change it is likely to require, and how much change you are capable of. Trying to eat the elephant in one bite is too much, and as a result, no progress is being made at all. Meanwhile the opportunity costs of not being able to use AI are compounding.
In a series of short posts, I’ll take a different approach. I’ll look at the individual small steps a team can take to make substantial progress in a short period of time, at low cost, and to set the conditions for more ambitious improvements in the future, leveraging the capabilities of artificial intelligence.
Step 1 – Stakeholder Engagement
The first step I recommend is getting other stakeholders warmed up. Leaving this until later is likely to be a deal killer.
Finance
Finance may be a key stakeholder, as they may need to help raise the money. However, you need to be careful not to set alarm bells ringing too early. Of course, there will be an aversion to spending more money in this tight economy, but at this early stage, you don’t even know what solution you’re going to want and what it will cost.
The key is to let them know you want to make inquiries to see what is possible, that you understand no investment will be made without being able to demonstrate a very strong ROI, and that you intend to look at how to make the most of what you already have first. Your goal, and responsiblity, is to find ways the legal team can deliver better outcomes for the organisation, so you would like to conduct some initial investigations and report back.
IT
Similarly with the IT team. Where we see the most initiatives fail is when the IT team is involved late and doesn’t understand the context or the costs to the organisation of the current way of working. As a result, they block any further movement.
They may insist that they already have another system that can do the job well enough, even when it can’t.
They could say they can build a solution, even though that will cost substantial amounts in terms of their time and yours, it will likely never get built, and even if it did, it wouldn’t be as good and well supported as what is freely available in the market that can be licensed at low costs on flexible terms.
As with finance, the key at the early stage is to make it clear you are just looking at options and will report back. If you can demonstrate what you want, why you need it, how it goes beyond existing solutions, and the value it will create, it’s useful to know there are options. IT can then respond to see whether they can provide a better option, and the respective costs and benefits can be fairly assessed.
The best IT teams that we see are supportive of legal teams investigating options, with a particular focus on how far they can get with the technology they already have, such as Microsoft 365. They are open to the options of having third parties provide solutions such as Microsoft Power Apps, which can be deployed securely in the organisation's own environment, and are happy to play a role in defining the solution and making sure the organisation's requirements are met, without burdening themselves with the responsibilities of fully designing, building and supporting a solution.
Involving key stakeholders early, which can include bringing them to early meetings with prospective suppliers to ensure requirements and full opportunities are understood and covered off, is likely to save substantial time and cost overall and to ensure that progress can proceed very quickly from there.
This collaborative approach is a good foundation for further steps, which I'll cover in later posts.
