Enterprise Legal Reputation Report: Uncovering Untapped Potential
Oct 19, 2022
Corporations worldwide embrace technological dynamism to compete with their opponents and accelerate their growth. This also helps them maintain a good reputation with their internal teams and clients. While ERP, CRM, and SCM are renowned and fully functional operations, LegalOps is relatively new and yet to be adopted by legal firms worldwide. Revenue generation, operational efficiency, innovation, and corporate culture are all linked to how an efficient legal team contributes to a company's growth.
To help legal teams develop more actionable plans to affect necessary change in their workflows, operations and culture, New York-based research firm Provoke Insights surveyed 4,000 enterprise employees and 500 corporate legal professionals from The United States, United Kingdom, France and Germany. It was conducted in January 2022 on white-collar professionals.
Guardians of the Enterprise
The legal department protects the enterprise, its assets and its people. As a result, about 60% of the surveyed employees optimistically view relations with the legal department. Furthermore, 78% consider legal as the protector of the business, and approximately 47% of respondents in the US find legal as a trusted advisor.
According to a Provoke Insight survey, 60% of the employees, majorly from HR and Finance, reported good relations with the legal department. However, there was a decline in positive responses from the Sales (43%), IT (38%), Marketing (37%) and Procurement (37%) departments.
Work From Home Efficiency
Globally, 41% of legal teams work in hybrid mode, while 12% work full-time from home. Turnaround time while working from home is a major concern faced by enterprises across the world. 10% of the American respondents reported a lag time of weeks to acknowledge their inquiries, let alone address them. The primary reasons for delays in getting a response from Legal were a resource crunch and a massive amount of work.
During the pandemic, working from home heightened this turnaround time even further. Moreover, the transition from a physical work environment to a virtual one took a toll on collaboration and efficiency, which impacted growth, differentiation and culture unfavorably. In corporations where Legal works remotely in the US, 36% of the respondents felt that the legal team is less responsive than in pre-pandemic times.
Innovation, Growth & Culture
About 47% of the respondents believe Legal positively influences innovation at their companies, including product development, research, patents and intellectual property. Half of the respondents believe that Legal's slow pace, overly laden processes, abundance of caution, and lack of resources adversely affect deal cycles. One in five respondents in the United States is concerned that the legal department lengthens the time to close and win deals.
On the brighter side, about 48% of the study's respondents, particularly those in the United States, believe that Legal is trying to improve at helping accelerate deal cycles. With artificial intelligence (AI) and other modern technology solutions to automate legal workloads, the speed at which Legal operates improves by 25%. This is made possible with the help of SaaS-based platforms like Traact, which helps streamline entity management, contract lifecycle management, matter management, and much more.
While Legal can improve its ability to impact sales, revenue, speed of Procurement and innovation, it also has the unique advantage of assuming a more significant leadership role in other parts of the business and its corporate culture; diversity, equity and inclusion, and data security being two requisite sectors.
Over 75% of the respondents believe that Legal efficiently manages data security in their respective corporations. Many respondents also felt that Legal could become more service-oriented rather than merely policy-minded as protectors of the business.
Relations Between Legal and Internal Clients
During the study, 75% of the respondents in the United States cited harmonious working relationships with internal clients. Legal feels it shares the best working relationships with Finance (84%) and HR (79%). In addition, 91% of corporate legal respondents believe they share exemplary interactions with their internal clients, and 95% of corporate legal respondents consider their department efficient in managing service requests.
The legal team reported highly positive relationships with IT (78%), Procurement (76%), Sales (74%) and Marketing (73%). On the other hand, the employee responses are dramatically lower, at just 38% for IT, 37% for Procurement, 43% for Sales and 37% for Marketing. Nearly 95% of US legal employees believe enterprise employees applaud their efficiency.
Employee retention is currently a grave concern in companies worldwide. Around 49% of all corporate legal professionals believe recruitment and talent retention require improvement.
The time to evolve for the legal team is now. At Traact, we help streamline legal ops by bringing all legal matters to a single place and providing better visibility, increasing legal service satisfaction. In addition, our SaaS-based platform helps auto-track reminders, eliminates repetitive work, saves time, and increases operating efficiency.
Regarding entity management, Traact can automate registered agent service and filings for all your entities and qualifications while tracking your international entities. It combines collaboration and workflow capabilities for matter management to make a unique user experience on a highly configurable platform. Track and manage every aspect of the contract lifecycle for its performance, compliance, and other success factors through every stage of the document's lifecycle — from execution to renewal or expiration.
Every jurisdiction requires different licenses and permits to operate, from obtaining to renewal and termination. Traact ensures you don't miss a single deadline where your business would get impacted. From small claims to a civil case, our dispute & litigation module helps you boost productivity, collaborate seamlessly with external counsel, & share insights. In addition, the board management feature allows all aspects of corporate board management and governance. Schedule meetings, share minutes, and exchange documents; Our software is designed to streamline processes, prevent oversights and ensure best practices are followed.
Collaboration with Legal
Legal has a good foundation for supporting Sales and the revenue acquisition process. First, the legal team believes that it positively affects sales cycles, with nearly 68% of respondents confident that they help Sales effectively close deals and generate revenue. In addition, 56% of employee respondents acknowledge Legal as providing positive support for Sales.
Contract lifecycle management (CLM) is a significant opportunity for legal operations teams to impact and transform the business, mainly because it is an area in which Legal is frequently overlooked. 40% of legal respondents stated that they spend four to five hours, or at least half of every business day, reviewing and managing contracts, which means half of their workweeks, quarters and fiscal years are spent manually reviewing contracts.
The United States has the highest percentage (35%) of contracts finalized in four to six months. Deal closure and revenue generation (44%), vendor procurement (42%), partnerships and mergers and acquisitions (23%) are all perceived to be negatively affected by inefficient contract lifecycle management.
54% of legal professionals stated that their CLM is currently automated. Automation can impact operational and cost efficiency by boosting productivity for lawyers by as much as 51.5%.
81% of legal respondents believe their contract management processes are efficient. However, 19% think otherwise. CLM, AI and ML tools can accelerate the entire contract process – from document generation and redlining to e-signature and finalization. There is an opportunity to improve, and software like Traact can help add efficiency to your legal team.
When it comes to innovation, 61% of the legal respondents globally believe they positively impact their businesses' innovation capabilities, such as supporting and protecting company patents and intellectual property. But, above innovation, it is people who are the atomic units of a business. As a result, legal can influence corporate culture and values more than ever throughout the company.
In the US, nearly 32% of legal professionals are beginning to prioritize DEI for their departments. In addition, 52% of the respondents report that their companies prioritize vendor diversity across their businesses, including the legal department. Almost 38% of legal professionals admitted diverse hiring prioritization in their companies. Around 33% mentioned the importance of cyber risk management. It is within these realms – DEI and data privacy — where Legal can play a pivotal role.
Efficiency and Accountability
Just as Sales, Marketing, HR, Finance, Supply Chain Management, Procurement, Product Development and Engineering have evolved making the best use of technology, legal operations are on the verge of transformation. Besides being a part of running the business, Legal has a direct and optimistic effect on the growth. With its presence across all departments, Legal has the ability to make a mark materially.
37% of legal respondents say chief financial officers hold Legal accountable for outside counsel spending and legal expenses in general. Additionally, 11% say their boards consider Legal responsible for their spending. While the internal clients are concerned about Legal's operational efficiency, the executive teams and board majorly focus on cost efficiency.
To execute gains in efficiency and demonstrate the value of its operations and impact on broader business, Legal must improve visibility, share accountability and collaborate more strategically, not just transactionally.
While conducting the survey, it was found that nearly 59% of enterprise employees characterized Legal as operationally inefficient. However, Legal's point of view cites that almost 95% feel they are perceived as efficient by internal stakeholders. Because clients perceive Legal as inadequate, 65% of legal professionals and enterprise employees recognized that internal clients sometimes bypass the department and its processes.
To address matters, close deals, contribute to topline revenue and margin control, and pivot to meet ever-changing market conditions, speed and spending must remain top of mind. Here, software like Traact can help improve efficiency and add to the revenue by allowing the team to save time on redundant tasks, which they can utilize on crucial matters.
75% of the legal respondents in the US believe they are cost-efficient. However, about 36% of the legal respondents admit to being able to measure the return on investment (ROI) for all outside counsel. The average department can track just three-fifths (60%) of outside counsel spending.
Embracing Modern Technology
Nearly 56% of legal professionals in the US believe that the technology they use is sufficient, while 44% feel that it needs improvement. In addition, 28% of the respondents consider themselves early adopters of the technology, 62% consider themselves middle adopters, and 10% describe themselves as late adopters.
Nearly 50% of legal professionals admit their department is opposed to change. They cite budget issues (48%), perceived lack of tech competency (31%) and lack of time for learning new systems (25%) as deterrents.
In the US, 74% of legal departments integrate AI into day-to-day operations.
Moving Towards Legal Innovation
To move ahead in this fast-paced world, Legal must not only maximize core competencies but also adopt automated, AI-driven technology. Almost 46% of legal respondents do not have automated systems for managing contracts, necessitating manual labor to complete the most mundane, repetitive tasks like generating document templates, drafting, redlining, finding existing contacts, reviewing contract history, proactively identifying key dates for renewals, seeking signatures and more. Here are the critical technologies that Legal should pay attention to.
Enterprise Legal Management (ELM) is integral to today's legal departments. It provides workflow clarity, drives process improvement and touches every Legal need, from matter management and legal service requests (LSRs) to vendor management and legal holds. In addition, ELM optimizes processes, allowing you to alter legal management workflows to match your unique business requirements. Finally, it streamlines your legal team's tasks to manage work across the department and enhance inter-department communication efficiently.
Despite the availability of such technology, 47% of legal professionals admit they currently lack sound systems, with 48% of respondents worldwide utilizing AI-integrated e-billing and spend optimization solutions. In addition, 46% acknowledged that Legal must also do a better job adopting technological innovation.
Contract Lifecycle Management solutions allow the legal team to automate contract reviews and administer data for revenue purposes. Around 55% of legal respondents in the US said their contract processes are automated. CLM mitigates the risk and empowers supplier-customer relationships. Above that, it saves on the time that Legal spends on drafting, redlining and executing contracts, freeing up 30% or more attorneys' time to perform other crucial tasks.
As the world generates exponential data, the scope for security and threat widens. This certainty allows Legal to show increasing impact, particularly as a protector of the business. However, keeping a security watch is also inherently a caretaker of privacy and intellectual property. As a result, legal is much more confident in its readiness to support data security and privacy, with 71% expressing satisfaction with their status quo in the US.
The Power of AI
77% of legal respondents incorporate AI into daily operations for matter management, e-billing and contracting. 41% of legal professionals in the US use AI for e-billing alone. AI-enabled workflow tools analyze data to find contract patterns and provide task recommendations and approval. In addition, it can review and suggest revisions for NDAs. It can consult the company playbook and clause library, steer contracts from the first draft to execution and renewal, flag key issues using contract review templates, and suggest proper edits.
Adopting AI minimizes delays and spending, optimizes Legal's bandwidth to drive revenue and maximizes efficiency throughout the enterprise. Implementing new technology can help Legal encash its influence as a trusted advisor and authority figure. From simplifying workflows to optimizing costs, Legal can leverage SaaS-based tools like Traact to serve as a pinnacle for collaboration and operational efficiency.
Future-Proofing Legal Ops
With transformation comes excellent opportunities. Legal's ability to attain greater visibility impacts the business and its potential to increase cost and operational efficiency through automation, and the learnings yielded from AI. The future of legal is re-envisioning possibility, driving relevance and achieving operational wins.
Book a demo with us to understand how Traact can help you simplify your legal ops.