Legal Reimagined- Tips for the contract management process
Legal Reimagined- Tips for the contract management process

Resisting the Great (Legal) Resignation by Updating Legal Technology

Recent research by Microsoft shared in its 2021 Work Trend Index showed that 41% of the workforce is considering leaving their employer this year. But the “Great Resignation” has already been affecting the legal industry.

With a whopping 4 million Americans having quit their jobs in July, the ‘Great Resignation’ is very real, and it’s having profound effects everywhere. Legal departments aren’t exempt from it, but legal technology provides a means of mitigating its impact.

What’s causing the Great Resignation?

The simple fact is that the pandemic has made people realize what they value and evaluate their priorities, especially on the personal and business front. If you haven’t felt it yourself, consider yourself fortunate.

Experiencing and talking about mental health challenges at work has become normalized (a silver lining), and as the Harvard Business Review put it,

In 2020, mental health support went from a nice-to-have to a true business imperative. Fast forward to 2021, and the stakes have been raised even higher thanks to a greater awareness of the workplace factors that can contribute to poor mental health.

Despite the pandemic fatigue being a somewhat shared experience, employees are hesitant to return to work for various reasons, including:

  • Some aren’t willing to return to the office, especially full-time.
  • Values have shifted and personal life takes priority over work.
  • Some expect a hybrid work environment as the bare minimum.
  • Burnout. The work/life balance blurred for many employees through the pandemic and they now expect compensation for additional hours or policies in place to protect their time.

While this might seem reasonable to some, employers are already wrestling with other consequences of the pandemic. It may have resulted in revenue loss, or indirect consequences such as new expenditures on technology to adapt to remote work.

Legal Reimagined: Conquering Today’s Challenges with Tomorrow’s Technology

A changed landscape

The aforementioned challenges, combined with the fact that many companies and law expect their attorneys to return to the office, has led to retention issues. In March 2020, the turnover rate within legal departments and law firms hit an all-time high of 9.7%. Turnover isn’t cheap – an employee’s departure will generally cost a company a steep 33% of their annual salary.

Between the disruption caused by the pandemic and the Great Resignation, the legal industry is undergoing dramatic changes. As employees leave, organizations start getting creative to attract talent. One of the interesting ways U.S. law firms decided to cope was to start looking for talent north of the border. In fact, this isn’t the first time American firms poached Canadian lawyers – many call it the ‘third wave’. As described in this in-depth article,

It may seem strange that this cross-border hiring frenzy began when borders were, well, closed…many white-collar professionals managed to prosper throughout the coronavirus crisis and its economic aftermath. Large law firms and their clients have more work — and more profits — than ever. “When the world’s in a crisis, lawyers tend to be busy,” says Adam Lepofsky, founder and president of RainMaker Group, a Toronto-based recruitment agency.

In fact, despite COVID-19 causing unprecedented challenges throughout the world over the past two years, 2021 has seen a significant increase in legal spend. In fact, it’s estimated that large domestic companies will have spent more than $23 billion on litigation in 2021, up from $22.8 billion in 2020. As spend increases, though, there’s a tandem demand for legal teams to become more efficient and productive with those budgets.

Automation is a top priority

To see how legal departments are addressing this, it’s worth looking at a survey carried out by the Corporate Legal Operations Consortium (CLOC), with respondents from 200 organizations across more than 22 industries and 21 countries. The study found the top priority is implementing diversity and inclusion programs, with the close runner-up (at 57%) being automation of legal processes.

This focus on automation isn’t new; it was ranked as high priority the previous year too. In fact, Gartner predicts that legal departments will have automated 50% of legal work related to major corporate transactions by 2024.

In March 2020, the turnover rate within legal departments and law firms hit an all-time high of 9.7%

Automating legal processes, whether by adopting ELM, CLM, or workflow automation solutions, has allowed legal departments to swiftly and easily implement processes in response to the pandemic, such as for tracking the ability of outside counsel to continue to deliver services, or measuring DEI progress even during disruption.

But legal departments are discovering some less obvious, but still important, benefits of automating.

Legal reimagined: How legal technology helps retention

Automating mundane legal tasks, such as NDA processing, so staff can work on more rewarding projects is one way workflow automation can help with job satisfaction and retention. When great employee onboarding is capable of improving retention by 82%, it’s crucial to have good HR workflow automation in place as well.

Another benefit?  Legal technology can temper the loss of the institutional knowledge represented by the departure of attorneys or other legal staff.

By embedding vetted best practices within automated workflows or management solutions, the enterprise can retain institutional knowledge within proven processes. This also includes data on what best practices were more productive, which activities consumed the most time, and so on, allowing leadership to hone those processes. They’re then able to onboard new employees into workflows which have been tried and tested.

As legal departments increasingly reach across departmental boundaries, they’re able to pass along these optimized processes to other business units, equipping them with workflows that have a certain legal “expertise” already woven into them.

64% of in-house legal departments say legal technology has resulted in better workflows and processes for attorneys, helping to mitigate the issues caused by mundane, traditional processes.  Legal technology will continue to evolve, though; some CIOs and GCs are retiring the idea of simply adopting standalone, one-off products.  They’re interested in implementing flexible, single-source, seamlessly integrated legal tech stacks capable of driving success for the entire organization, while making their legal departments much more alluring for future (let alone current) generations of attorneys and legal staff.

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