Economic downturns present general counsels with a difficult choice: You can either downsize #LegalOps and freeze #LegalTech spending, or you can choose to invest and double down on both. It’s a natural tendency to want to spend when we’re in times of plenty, and put on the breaks when the economy slows – but is that actually the best approach?
Smart investment can leverage your existing resources by improving the speed, quality, and cost of delivering legal services. Automated technology can handle many of the tedious and time-consuming tasks that lawyers typically have to do manually. This reduces the amount of time and effort that lawyers and other staff need to spend on a project, which in turn lets your legal team do more higher value work.
Layoffs are a mistake.
One misconception is that legal ops works on things that are important, but not urgent. As a result, we often see the mistake of Legal Ops layoffs during challenging financial times. Cutting out the one person or team solely focused on efficiency and scale is short sighted. Efficiency is always a good thing, and it’ll be especially appreciated when the time comes for your business to grow again.
It’s a great time to hire.
Even if your company can avoid it, there are a lot of businesses out there laying people off right now. This actually makes it the perfect time for you to land some star talent. Every economic downturn sees lots of great people looking for roles, and the smart companies know now is the time to snatch them up while there’s less competition to hire.
For the most part, tech is less expensive than headcount. When economics won’t allow for hiring, think about adopting new technologies to scale and boost your business. Take a look at your workflows and processes, and look for technology — like contract lifecycle management (CLM) software — designed to make your existing resources more efficient and productive. Having trouble getting buy-in on the investment? Leverage peers in your community who’ve had success. Share their case stories about saving multiple full FTEs’ worth of work.
Focus on professional satisfaction and avoiding burnout.
The work doesn’t stop when there’s an economic downturn. Demand for legal services continues – and may even grow – when financial anxiety heightens. What signal does it send to your team, then, if you’re freezing or cutting resources while still expecting them to do the same total amount of work?
Investing in technology offloads some of the burden and reduces the amount of routine, low-value work assigned to employees. Freeing your people up to focus on more creative, high-value tasks leads to greater job satisfaction and a happier team.
Use a crisis to prepare for the moment the crisis ends.
Crises make most businesses act more conservatively. This is not the time to slow digital transformation, though — it’s actually the right time to accelerate. Previous recessions have demonstrated that the companies that can maintain their momentum during a downturn will have the best chance of making it through in one piece.
That said, why just maintain when you can prepare for what’s next? Strategic investments are crucial to maintaining momentum and also essential to meeting future demands and pulling ahead of the competition. Investing in tech during a downturn might feel like an unnecessary luxury at that particular moment, but that’s the wrong way to think about things. Adopting the right technologies during a crisis can help you survive it and, just as importantly, better position yourself for when the crisis passes.
The key is to invest intelligently.
When you’re resource constrained, it’s critical to choose the right software and not just blindly invest in technology. Things to think about:
- Time to value. Hearing things like, “It’ll take a full year to get this implemented”? Run for the hills! You need to get up and running as quickly as possible, so look for technology that’s easily deployed and quickly adopted by your teams.
- No code. You don’t have the luxury of spending time and money on outside help with administering your new system and making day to day changes. Look for tools you can manage yourself, using your own team’s resources.
- Ease of use. Crises don’t afford time to focus on change management. Your users need to see the immediate value of new tech to drive quick adoption. Any tech you invest in should be intuitive and easy to use. The last thing you need is to introduce a new tool that actually creates more work through endless training and troubleshooting.
What do smart GCs do?
When the belt tightens, general counsel aren’t so free to add lawyer headcount or rely more heavily on outside firms. That’s when the forward-thinking GCs know they have to think more creatively. If history is any indicator, this is exactly the time when we’ll see real innovation and investment in legal ops and technology.
As I always say, legal ops and tech are force multipliers on your department and drive immediate and measurable ROI. We saw the explosion of legal ops hiring during the 2008 Great Recession (when I was first hired at Google), and also in 2020 during the Covid-19 pandemic. I’m already seeing it again now with our current downturn, and this hiring is paired more and more with digital transformation. There may have been an initial freeze on spending at the onset of the downturn, but smart departments have started to invest more in legal ops and legal tech to extract the most value out of their existing resources.
Legal ops friends, this is when we shine! Our data acumen, insights, prioritization, and business acceleration are vital to our organizations. When the going gets tough, we step up and prove the value and impact we bring.
Ironclad is the #1 contract lifecycle management platform for innovative companies. L’Oréal, Cisco, Mastercard, and other leading innovators use Ironclad to collaborate and negotiate on contracts, accelerate contracting while maintaining compliance, and turn contracts into critical carriers of operational business intelligence. It’s the only platform flexible enough to handle every type of contract workflow, whether a sales agreement, an HR agreement or a complex NDA. The company was named one of the 20 Rising Stars on the Forbes 2019 Cloud 100 list, and is backed by leading investors like Accel, Y Combinator, Sequoia, and BOND. For more information, visit www.ironcladapp.com or follow us on LinkedIn and Twitter.
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