Efficiency, to some degree, has become the water the business world swims in. Conversations about technology and processes are shaped by the question of how efficiency can be improved. But efficiency, at its core, is a question of speed: How can an organization get a task -- such as data entry, for instance -- done faster.
Instead, perhaps businesses should be more focused on productivity. While productivity is related to efficiency, it asks a different question: How can an organization tailor its processes and technology to help the business?
Corporate legal departments (CLDs) are a prime example of where improved productivity can make a substantial impact. Legal departments have a direct effect on their companies’ bottom lines, so CEOs frequently look to them to reduce and manage costs. But those goals can’t be achieved by simply becoming more efficient; they also require an eye toward maximizing profitability and productivity.
To that end, controlling costs may sound simple, but it actually requires a high-level, holistic understanding of the department and its business. As the CTO of a company that produces enterprise legal management software, I've seen firsthand that by having such an understanding, a legal department can gain unparalleled data-driven insights, address everyday challenges, streamline workflow, increase adoption and improve business outcomes. How? With three areas of emphasis: technology, processes and people.
Within CLDs, e-billing is a popular foundational technology, as paper invoices are highly ineffective and costly. According to the "2017 State of the Industry Survey" from the Corporate Legal Operations Consortium, 83% of corporate legal departments use some form of an e-billing system.
Reducing manual labor is an obvious way to turn technological progress into efficiency improvements, but e-billing is just a piece of the puzzle. Effectively managing outside counsel spend requires leveraging AI, new workflow capabilities and domain expertise, along with e-billing technology.
Even with e-billing tools in place, many departments still rely on manual labor to review invoices, lack multidimensional data review and have trouble managing increasingly complex billing guidelines. It’s crucial to have a robust system of AI tools that can do much more. AI and machine learning can automate previously manual tasks based on how the work has been done historically, using such data to identify patterns and, in turn, flag potential violations. AI can also minimize the turnaround time of complex decision-making, such as reviewing invoices against guidelines, by assessing attributes of the workflow and automatically routing work to the correct person.
In other words, AI does not just make processes faster -- it makes them smarter, too.
Many legal departments use e-billing solutions that operate separately from their other tools, but this approach creates a number of challenges. First, it makes it harder to see where money is being spent and which investments are creating the greatest returns. Second, productivity and efficiency both suffer when workers must routinely access several systems to do their jobs. Adding more fragmented tools -- even if they promise to individually increase efficiency -- isn’t going to improve productivity. For example, an e-billing solution that works within the Microsoft Office Suite, where many lawyers spend a good deal of time, is more appealing than a brand new widget.
Three questions can help teams improve internal workflow processes: What is the baseline of the current process? What kinds of processes can deliver value? And what kind of process can be adapted for use across distributed teams? In choosing which optimization initiatives to focus on first, legal departments must consider how they will impact teams across the board.
The best way to do this is to create a journey map to outline existing steps, identify all inputs and outputs, and interview stakeholders across teams to figure out which steps offer real value. Anything that isn’t considered valuable is waste and should be eliminated.
Consider, for example, credit card approvals, which often involve a lot of manual processes. It’s not unheard of for credit card issuers to take weeks to onboard new clients. In reality, the only thing the issuer needs for approval is a business name and number -- not five pages of information upfront. That’s a wasteful step. It’s better to get the most pertinent information upfront and gather the rest later.
In the legal industry, invoice approval processes are another area ripe for improvement. Invoices should be triaged based on size. There’s no reason for a $5 invoice to go through the full workflow process.
While e-billing has become widely adopted, an incumbent approach like manually assessing invoices can sometimes feel safer to employees, thanks to familiarity bias. To overcome this, people must be empowered to try new things, think big and know that failure is OK.
Employees across the team must be empowered to challenge the status quo and be rewarded when they do so. It can start with something as simple as a 30-minute meeting of people from different functions and teams. Bring them together. Challenge them to come up with a solution and offer a reward.
Still, it’s important to remind team members that the process of streamlining workflow and implementing new tools is sure to come with some setbacks. That reality must be clearly communicated to everyone involved so fear and potential disappointment don’t undermine the initiative. The team should be able to fail fast and learn from it.
In fact, thinking big could easily be the tagline for productivity. A successful legal department can’t simply have workers who only care about the success of their own teams and can’t just have a tool that gives insight into one slice or variable of the business. Productivity comes from having a holistic implementation of solutions across the entire department.
Organizations are increasingly dynamic. For legal departments and others to evolve and meet their organizations’ objectives and expectations, they need a slightly new way of thinking. A three-pronged approach that takes into account technology, processes and people offers a simple way to take the current emphasis on efficiency and evolve it into a productivity-centric mindset that can benefit the organization at large.