Legal & IT Collaboration: Where to Start

Imagine a General Counsel at a rapidly growing tech firm on the cusp of launching its most ambitious AI-driven product yet. The launch is weeks away, but various contracts are trapped in a labyrinth of approvals, the compliance team is waving red flags about data usage, and the GC is unsure not sure if the team has right software licenses in place. This isn’t just a legal problem or an IT issue; it’s a symptom of a deeper disconnect that’s costing the GC’s company time, money, and competitive edge.

This scenario echoes in boardrooms and offices across industries and underscores a critical challenge facing modern businesses: the urgent need for seamless collaboration between legal and IT departments. As technology increasingly drives business operations and introduces new complexities, the traditional boundaries between these teams aren’t just blurring—they’re actively hindering progress.

But what does effective collaboration between legal and IT actually look like in practice? How can these traditionally siloed departments work together to drive innovation while managing risk? Let’s take a look at some areas and projects legal teams can start with.

1. Contract lifecycle management and related processes

Today, legal teams don’t operate in isolation. To create a seamless contracting ecosystem with IT, identifying a robust, scalable contract lifecycle management (CLM) solution is step one.

Find a cross-functional CLM platform. 

• Form a joint legal-IT task force to evaluate CLM software options. Include representatives from legal, IT, procurement, and key business units.
• Develop a detailed requirements document that addresses both legal needs (e.g., clause libraries, approval workflows) and IT concerns (e.g., security, integration capabilities, scalability).
• Conduct a pilot program with a subset of contract types and/or a specific team before full rollout. Use this phase to identify pain points and refine processes.

For example, if your organization struggles with contract visibility across departments, you can partner with IT to implement a CLM system that integrates with your CRM and ERP systems.The result? Contract creation time can drop significantly, and you can eliminate rogue contracting by business units.

Create a digital clause library with version control. 

• Collaborate with IT to develop a clause library for approved contract clauses that capture both legal and IT’s risk, compliance, and security requirements.
• Implement a tagging system for easy searchability (e.g., #indemnification, #confidentiality).

After building a clause library for your organization, ideally within your CLM, when regulatory changes affect your data protection clauses, for example, you can quickly update the central repository, ensuring all new contracts immediately reflect the changes.

2. Compliance and risk assessment

Staying compliant in a rapidly evolving regulatory landscape requires a proactive approach. Here’s what you can do:

Develop a compliance monitoring dashboard. 

• Work with IT to create a real-time compliance dashboard that pulls data from various systems (e.g., HR, finance, operations).
• Set up automated alerts for potential compliance issues, such as approaching deadlines or unusual data patterns.
• Conduct quarterly reviews with IT to refine the dashboard based on changing regulations and business needs.

For example, you can work with IT to create a compliance dashboard that tracks GDPR, CCPA, and industry-specific regulations. When a potential GDPR violation is flagged in your marketing department, legal can intervene and prevent a costly mistake that IT might feel the repercussions of.

Implement AI-powered risk assessment tools. 

Collaborate with IT to select and customize AI tools–or CLMs offering built-in AI functionality–that can scan contracts, emails, and other documents for potential risks.
Develop a risk scoring system tailored to your industry and risk appetite.
Establish a process for legal review of AI-flagged issues, including a feedback loop to improve the AI’s accuracy over time.

If your CLM has AI-powered contract data ingestion features, you can scan and tag your entire contract database. It can then identify and flag risky clauses. For example, it could flag several outdated force majeure clauses that might have left your organization exposed during the COVID-19 pandemic, allowing legal to proactively update the agreements.

3. Software licensing and use

Effective software management is a key area where legal and IT must work hand-in-hand. What might that look like?

Create a centralized software asset management (SAM) system. 

• Partner with IT to implement a SAM tool that tracks all software licenses, usage, and compliance.
• Develop a process for legal review of all new software purchases, including open-source components.
• Set up automated alerts for license renewals, allowing legal time to negotiate terms.

For example, you could implement a SAM system and discover that you were over-licensed for several expensive CAD software packages. This insight would allow you to renegotiate licenses, saving hundreds of thousands of dollars annually.

Establish a software approval workflow. 

• Work with IT to create a streamlined process for employees to request new software.
• Implement a risk assessment checklist that covers legal, security, and compliance concerns.
• Set up an expedited process for low-risk, pre-approved software to balance security with business agility.

This way, while enterprise-wide tools require full legal and IT review, team leaders can quickly approve low-risk productivity apps from a pre-vetted list.

4. AI tech implementation and usage 

As AI becomes ubiquitous, legal teams must be at the forefront of ensuring responsible use. They can:

Develop an AI governance framework. 

• Collaborate with IT, data science teams, and business units to create a comprehensive AI governance policy.
• Establish clear guidelines for AI data usage, model training, and output interpretation.
• Implement an AI ethics review board with representatives from legal, IT, and relevant business units.

For example, if you work in healthcare software, you could build a governance framework for your diagnostic AI tools. This allows you to rapidly deploy new AI features while ensuring compliance with healthcare regulations and ethical standards.

Implement AI auditing and explainability tools. 

• Work with IT to select and implement tools that can audit AI decisions for bias and provide explanations for AI outputs.
• Develop a process for regular AI audits, with legal review of the results.
• Create templates for AI impact assessments to be completed before deploying new AI features.

An HR organization, for example, could use AI auditing tools to review their AI-powered recruitment system. They could discover unintended gender bias in the algorithm, allowing them to correct the issue before it becomes a legal liability.

Legal and IT are better together

By implementing these practical strategies, in-house legal teams and IT departments can create a powerful alliance. This partnership not only mitigates risks but also drives innovation and efficiency across the organization. Remember, the key is ongoing communication and a willingness to continuously refine these processes as technology and legal landscapes evolve.