The Great Recession of 2008 had a significant impact on the legal industry with reduced budgets and headcounts, and increased business and legal complexity.
Thanks to this past experience, this time around our crystal ball shows a pretty clear picture of the challenges we’re likely to face (or are possibly already facing) along with the knowledge of what worked (or didn’t) to mitigate or solve those challenges.
The legal technology industry has also come a long way since then — in fact, the Great Recession could be seen as a catalyst for major change across the legal tech landscape.
In this article, I’ll take three challenges the legal industry tackled during the Great Recession, and look at how you can prepare your in-house legal team in the best way possible, by arming them with the best tools.
1. Expecting in-house legal teams to do much, much more, with a lot less
We know recessions bring tough budgetary decisions, whether it’s cutting costs or getting more out of existing resources. Given these restrictions, it’s unlikely that any increases in the volume of work will be matched with increases in headcount.
Therefore, teams need to do more work with fewer resources, meaning that saving time and increasing productivity becomes paramount to the ongoing efficiency of the legal team.
And we don’t need to do too much digging to find areas where we can make productivity gains. According to the 2022 In-house Legal Technology Report, lawyers and legal operators reported spending over three hours per day:
- searching through emails and other systems to determine matter history or seeking advice from outside counsel (40 percent of respondents); and
- back and forth with the wider business to gather complete information or update them on the status of contracts and other work (40 percent of respondents).
Without the right legal tech, not only is time wasted, but the type of work the in-house legal team spends its time on is also under-serving the business.
Time is the one factor that limits what we can achieve, and it will always be in exceedingly short supply. When the pressure is on, there’s the tendency to focus on turning around the quick wins, churning out low-value operational requests, with the illusion of being productive. We might get some praise for responsiveness, but legal is not really doing the work that adds value to the business.
The Report also found that these lower-value tasks bring less job satisfaction, with 92 percent of legal professionals unable to focus on larger business goals as they’re spending so much time on low-value, largely manual tasks, which are also affecting their ability to deliver a legal service in a timely way.
Legal tech = time back and productivity gains
Legal tech, such as a legal workspace, can give back time and create capacity by:
- streamlining intake (more on this below);
- automating repetitive tasks;
- offering self-service options for contracts and legal knowledge through a portal or hub;
- connecting tools such as matter management and contracts to improve context and reduce the number of point solutions you need to deal with; and
- working from a connected platform, so there is a single source of truth.
This means you can respond to fluctuations in workload without burning yourself out, which is especially relevant when preparing for the impact of a recession.
2. Abrupt changes in the type of legal work and its complexity
During the Great Recession, a lot of the work typically outsourced to law firms returned in-house, putting pressure on already stretched teams who had to deal with not only an increased volume of work, but different, more complex work, often with a higher value to the business. Also, the changing economic landscape found fewer high-value mergers and acquisitions, and more insolvency, bankruptcy, restructuring, and litigation.
It’s not all negative though! If there’s an influx of high-value work, then there’s the opportunity for the team to grow its legal IQ or learn how to be more creative in unbundling issues to maximize efficiency when using outside counsel.
Of course, a change in the type and volume of work means increased pressure on the intake system, especially where it is delivered to the legal team in various forms and via multiple channels.
Legal tech = streamlined intake and workflows
Adopting legal tech, such as a legal workspace, means intake of legal requests is delivered to the legal department in a more structured form, resulting in:
- less back and forth with the business as all details are captured upfront, reducing duplication and saving time;
- the ability to triage requests, prioritize and assign to the best person;
- data that’s visible and helps to make decisions around optimizing workflows, hiring and resourcing, and reporting on ROI; and
- identifying low-value or repetitive requests that may be suitable for automation or self-service by business users.
Legal tech can also empower business users by enabling them to submit intake via their favorite tools. Integrations with solutions such as Outlook, Gmail, Salesforce, Slack, and Microsoft Teams mean that business users are more likely to proactively send requests through to legal.
3. Unable to show the real value of legal to the business
One of the most significant differences between the Great Recession and now is the explosion of legal tech, with gazillions of digital documents and other forms of data from multiple sources flooding into and generated by the legal department. The issue? Many of the tools that hold this information are separate or not connected. This leads to the surfacing of data for reports and insights being a resource-hungry and costly activity, requiring legal tech that offers more than ‘control F’ to locate and surface relevant data.
Legal tech = data from connected legal tools
During an economic downturn, some organizations look internally for efficiencies and cost savings, so it’s important to have the data and visibility that shows the real value that legal adds as an integral part of the business.
Demonstrating this value means measuring legal’s contribution to the business. This task requires something more sophisticated than a spreadsheet of work completed that just shows the team has been busy doing stuff, rather than actually adding value or enabling the business to succeed. So there’s the need to access and collate data, and then a way to analyze it. Capturing this information on one platform, such as a legal workspace, means you can produce reports on in-house performance, engagement with the wider business, and outside counsel performance and spend, and how that work aligns with the business’ KPIs or objectives.
Selecting the right legal technology for the future
In recessionary times, the right legal tech helps to mitigate and manage challenges, such as increased volume of work with fewer resources, changes in the complexity of business and legal work, and the ability to show the real value of the legal team to the wider business.
Yet, an impending recession is not all bad news — it can be the catalyst for the change we need to become a high-performing Connected Legal Function. We can prepare by taking action to optimize our productivity, build better relationships and show the business the value the legal team adds, moving the legal team from a cost center to a profit center.
It’s a great moment in time to shift the needle on how legal is perceived in the business.