Legal Tech Sees Opportunity in Corporate Law’s Evolution

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In-house legal departments have become an attractive target to legal tech companies as they look for ways to improve efficiency. And by turning to technology, corporate legal departments may be fundamentally altering the power balance between them and their outside counsel.

“It just feels like the early stages of something, where in-house teams are really stepping up and doing some really interesting things and really looking at technology and process improvement and efficiency in a very interesting way,” said Rob MacAdam, director of legal solutions at HighQ. The legal tech solutions provider has recently built an extension onto its existing platform featuring a suite of tools geared specifically towards corporate legal teams.

So why are in-house departments suddenly looking to invest in legal tech? The better question might be why not sooner. Even within an industry that has notoriously reluctant to adapt to new technologies, corporate legal teams might still be a step out of touch. Put another way, when new solutions do hit the marketplace, a company’s first thought isn’t always its legal department.

“[In-house departments] are in many cases kind of the forgotten team amongst their organization. They are used as problem solvers… They haven’t necessarily had that same investment as other teams [with] technology,” MacAdam said.

But legal departments are realizing they need solutions to help streamline increasingly hefty workflows. To be sure, HighQ isn’t the only solutions provider to take notice of a demographic ripe for legal tech. Carly Toward, a lawyer in charge of value propositions, market positioning and industry insights for corporate legal departments at Thomson Reuters, said her company has gradually increased its focus on in-house legal teams over the last five years.

The shift is due in equal parts to a surplus work that needs to be done within those departments and the right technology finally being in place to automate the completion of that work.

“There’s a ton of manual process that exists within the legal department today and [with] departments bringing in technology managers to legal ops teams, they’re certainly driving that interest as well,” Toward said.

Frank Giovinazzo, a managing director at InCloudCounsel, thinks that in-house teams are subject to more routine legal processes—summarizing or negotiating basic contracts, for example—than the average lawyer at a law firm. Those duties subtract from time that could be spent on more lucrative tasks.

“To monopolize their time with routine legal functions that can be outsourced really sacrifices an extremely valuable resource that they were hired to provide,” Giovinazzo said.

Establishing that value might also entail readjusting the power dynamic that exists between corporate counsel and their law firm counterparts. The new addition to HighQ’s platform was built with the idea that while it enables collaboration with outside firms, in-house counsel remains entirely in control.

MacAdam said that a company could use the platform to evaluate the performance of different firms in its employ. If the time came to part ways, there wouldn’t be any haggling over data or access to the system.

“I think that the other trend that we’re seeing is in-house teams stepping up and actually wrestling away control from the law firms and saying, ‘This is going to be on my terms and not yours,’” MacAdam said.