7 tips for embracing the legal digital transformation as an in-house lawyer

From agriculture to education, retail to healthcare, digital advancements have pervaded almost all corporate functions. The legal profession has been one of the last to accept this digital transformation. Where the technological overhaul has swept through almost every other sector, many legal professionals have held on to traditional working models.

But outdated ways of working could pose long-term threats. With pressure to take on more work, flat or declining budgets, fewer resources and demands to serve as strategic business partners, in-house legal teams are striving for efficiency and effectiveness.

In its 2024 State of the Corporate Law Department report, the Thomas Reuters Institute explored the key focuses for corporate legal teams. Informed by interviews with over 4,500 professionals worldwide, including legal leaders and C-Suite executives, they revealed General Counsel’s increasing emphasis on driving department efficiency, updating technology and enabling corporate strategy.

With increasing workloads in mind, in-house lawyers and legal professionals are seeking ways to source time. A future-focused legal department will put technology at the centre of this endeavour.

The reality of digital transformation in the legal industry

Digitalisation is changing the way legal services are delivered and experienced. Effective digital transformation leads to a more productive workforce. Embracing new technologies enables in-house counsel to provide more efficient and effective services, centred around their client’s needs.

But while buying and implementing technology plays a part, the most crucial element is to bring the team along for the ride, to engage team members in the change process. Digital literacy forms the foundation of innovation in modern businesses.

As reported by the BBC: “Today, digital literacy is no longer a functional proposition, it’s a mindset. In the modern workplace, there is a greater expectation for employees to nimbly adopt whatever technology comes with their job as well as adapt to ever-changing tools and approaches.”

And it is quickly becoming a non-negotiable for lawyers and legal professionals.

What makes a digitally literate lawyer?

Fundamentally, legal technology is the toolkit that empowers users to systemise workflows and improve efficiencies so their time is more focused on delivering results to the business. However, its deeper ambition lies in transforming the way in-house counsel approaches all aspects of their role, from day to day tasks to their overall strategic contribution.

Blending technical skills, data proficiency, critical thinking and strategic planning, digital literacy in law goes beyond an understanding of software. Rather it is a willingness to try new technologies, embrace trial and error until you find the right tool, improve collaboration, learn new processes and be digitally confident.

Effective management of digital tools and data allows in-house lawyers to see better operational efficiency and respond more strategically to business needs, whether that’s by identifying legal risks early or improving contract efficiency. And with increasing calls for legal departments to act as strategic business partners, digitally literate lawyers who can analyze data and optimize processes are crucial.

But adopting new technologies does not always come instinctually. Additionally, Lawyers with already demanding workloads have limited time to invest in self-learning new skills. The wealth of legal tech solutions available means it is easy to get overwhelmed or invest in technology for technology’s sake. Digital tools need to be intuitive and immediately beneficial, otherwise they run the risk of going unused. Adoption is an organisation-wide initiative however. Strategists, Operations, the IT Department each have their own discrete roles, working collaboratively on digital literacy and incremental improvement.

7 tips for implementing digital transformation in the legal sector

1. Adapt to stay ahead

The prediction that increasingly capable machines will encroach on traditional legal work has been made very real and imminent by Generative Artificial Intelligence. According to the Thomas Reuters report, 42% of respondents believe AI will be transformational in the legal profession. A further 32% believe it will have a high impact. But in-house lawyers need to be active participants in the evolution to harness them effectively.

Early adopters of technology can position themselves as industry leaders. The first step? Stepping beyond the comfort zone. And one of the best ways to learn is by doing, so by challenging themselves to explore unfamiliar technologies, in-house lawyers can offer suggestions for tech-based solutions that benefit the entire team, or even the organization as a whole.

2. Explore more innovative ways of working

With the likes of Microsoft Teams and Zoom becoming regular meeting places for colleagues, corporate communications are increasingly via digital platforms. The pandemic urged many companies to accelerate the digitalisation of their operations and adapt to a new way of working. In April 2020, Satya Nadella, Microsoft’s Chief Executive, noted this global shift that achieved “two years worth of digital transformation in two months”. As a result, hybrid work became essential. And now, four years on from the initial lockdowns, it is embedded.

Data uncovered by research and consulting firm Gartner shows most lawyers currently work in some form of hybrid model. They reported that 61 percent of global legal professionals, both in-house and within traditional law firms, undertake hybrid working. Having the option to work from home can help lawyers maintain a better work-life balance. And technology can be used to make the transition from home to the office seamless.

3. Include digital literacy in professional development

Continuous learning is synonymous with the legal profession. As laws and regulations are introduced and evolve, attorneys are tasked with keeping abreast of any updates or changes. A culture of adoption for digital transformation and processes helps to advance digital competency within organisations, facilitating learning and development through the same systems used for day to day task management.

Continuing professional development (CPD) programs should be adapted to include digital literacy as a core component, including areas such as cybersecurity, AI in law and cloud computing.

Allens, a leading international law firm, introduced The Future Fluent Passport program. It aims to prepare the firm’s lawyers and corporate functions for digital transformation. Being implemented across the firm, it covers topics from data analytics to digital ethics and is designed to keep staff “capable and confident” in using new technology to elevate their service delivery and stay innovative.

4. Actively collaborate

The need for business units to collaborate effectively in the workplace has never been greater. A digital transformation requires multi-disciplinary collaboration and alignment. Typically, when considering the implementation of new technology, the legal department information technology (IT), finance and procurement teams all have a buy-in. However, a digital transformation may require contributions from those in sales, operations, technology, marketing and communications and the C-Suite level.

Having surveyed 373 in-house legal professionals, ACC and Everlaw found that although legal teams want to increase their use of technology, they lack the capacity needed to realize its full value (The State of Collaboration in Corporate Legal Departments). Identifying their legal departments’ top priorities, 70 percent of respondents reported that they wanted to better align with other business units, and 66 percent said they wanted to employ greater use of technology. However, only 20 percent work closely with IT.

Digital transformation in the legal industry demands increased integration of data and analytics, which IT can support. “Digital transformation is about bringing the enterprise together and breaking down barriers,” IDC Senior Research Analyst Ryan O’Leary advised General Counsels in 2019. “Work more closely with IT…A lot of security concerns come from implementation, not necessarily the technology.”

5. Maintain cybersecurity awareness

Legal firms and departments are prime targets for cyber attacks. They hold sensitive client data and therefore must put robust defenses in place. Staying abreast of best cybersecurity practices isn’t optional — it’s necessary. Ongoing staff training, secure communications and safe storage of data are among the practices legal teams can use to protect information and prevent data breaches.

Confidentiality is the backbone of the legal sector. Effective cyber processes safeguard client information, and ensure compliance.

Working alongside the IT department, legal departments must implement security protocols that address current risks and prepare for potential threats as they enter the digital age.

6. Develop a digital strategy

As corporate legal teams become recognized as strategic leaders, involved with enterprise-wide operations, they need to be able to demonstrate their value to others in the business. Evaluating progress is crucial to keeping your department on track while measuring the effectiveness of the digital transformation legal initiatives.

The expanded role of in-house counsel requires a comprehensive understanding of business objectives and measuring performance against organizational metrics. This is particularly crucial as business models become increasingly complex and the pressure to reduce costs continues. Specific key performance indicators (KPIs), like contract cycle time and legal spend as a percentage of revenue, should be tracked, reported and acted on. Lawyers must identify key challenges and opportunities, and propose plans to solve or leverage them.

7. Take a client-centric approach

Digitally mature companies like Microsoft and Apple have emerged as corporate leaders. Importantly, they were early adopters and never stopped adapting, and their steadfast focus has been on customers. Technology is already woven into daily life, and corporate legal departments must embrace change to stay relevant and effective.

A higher level of digital maturity allows lawyers to better understand and anticipate the needs of their organization. Actively seek feedback from stakeholders and use their input to refine processes and services. In turn, in-house attorneys can meet their client expectations and reinforce their role as integral contributors to the organization’s success​.

How digital transformation can elevate the legal function

Digital technologies are pervading several aspects of legal workflows. Cloud computing brings the likes of contract and knowledge management together in one place, while specialized AI can automate the review of legal documents. Now is a crucial and opportune time to improve your legal team’s digital literacy and prepare for the digital transformation.

Enhancing skills, opportunities and operations

• Workflow automation: Achieve consistency in productivity and performance with process automation, enabling corporate legal departments to optimize and simplify manual processes. This improved procedural efficiency ensures the team meets or exceeds client demands.
• Cybersecurity risk assessment: With data-backed analytical insights, in-house lawyers can stay vigilant to risks, create a risk-aware reporting culture, reduce human error in reporting and meet legal requirements and compliance legislation.
• Case management software: Cloud-based tools simplify tracking the trail of all past and present legal matters. With a solid system in place, legal teams can become more strategic and forward-thinking.
• Data analysis for informed decisions: Many in-house lawyers struggle to demonstrate their value to the organization. Data analytics software brings transparency to your department’s workflows, designed to deliver strategic insights aligned with your business objectives.
• Career opportunities: Now largely considered a “non-negotiable” in the workplace, mastering digital tools can open new roles in sectors like legal operations and compliance. Digital literacy is a continually increasing necessity. Staying ahead of the technology curve is crucial in the ever-changing labour market.
• Change management: Strong leaders foster a culture of innovation and adaptability. They are vital for navigating digital transformation. General Counsel must lead their teams effectively through transitions, ensuring staff are engaged and confident to adapt to new technology.

Digital transformation projects made simple with Dazychain

Simple and easy to use, Dazychain supports every aspect of your matter management. From intake to reporting, document management to risk and contract assessment, our end-to-end system is a single source of truth for your team. We can create a simple configuration or a fully automated experience, depending on your needs. With onboarding support to help you get started, and continuous assistance to ensure your ongoing success, Dazychain can prepare your legal department for a digital future. Book your demo today!