The legal tech mistake even the best GCs make

Assessing legal tech is a pretty hot topic right now.  

So I thought I’d pen some thoughts on the subject for those on the in-house side. 

When assessing what technology to buy, I often see in-house teams, and more so procurement teams, quickly descend into a feature/functionality audit or comparison with ‘competing’ products. The very nature and structure of RFPs for technology lend themselves to the feature/functionality audit. This is a dangerous approach. (And yes, I see the RFP irony!!)

Don’t get me wrong. Functionality is clearly important. The tech needs to solve your problem. 

Where most teams go sideways is the lens through which they evaluate those features, competitors, and pricing. 

What you’re not doing

Before we dig into the proper lens through which to view purchasing legal tech, let’s start with how you should not view it.

• You’re not deciding on what ‘tool’ (a term I hate!) to buy. 
• You're not deciding what ‘tech’ to buy. 
• You’re certainly not deciding which ‘feature’ weighs more heavily, or which solution is cheaper, so that you can show you saved money on the cost of the solution.

What then, are you doing?  

You’re deciding which company and team to partner with. 

Which team will you trust enough to put before your CLO, the legal exco, and your lawyers? In short, you’re deciding which team you’ll stake your reputation on and make a part of your own team. 

That might sound a little dramatic, but let’s be clear, the path of failed or disliked legal tech implementations and solutions is littered with shattered reputations. Those of you who have been through the experience of a failed legal tech software implementation know it all too well.

The legal tech assessment checklist

What does seeing the process through a partnership lens mean in practice?

1. Happy GC/CLOs: What do the vendor’s customers say about them? Do they scream praise from the hilltops? Or shrug their shoulders? Speak to GCs/CLOs and their leadership team. If legal leadership is ecstatic, then you know you have something!
2. Repeat point 1.
3. Change Management: Change management in legal tech is usually underestimated. And again, it’s difficult, if not impossible, to see it in a feature-comparison spreadsheet. How many change management programs has the team successfully implemented in similar-sized/industry companies? How skilled is the team you’re evaluating at change management? Do they articulate what the change management will look like, the challenges you’re likely to face, and the strategies to deal with those challenges? How do they report on all of that and more on a quarterly basis? Ask them to show you.
4. Team Experience and Quality: What’s the quality and experience of the team that your own lawyers will engage with day to day, from the more routine support to the highest value and most complex transactions? Are your lawyers likely to call you after the experience and thank you for your selection?
5. Team’s Innovation Trajectory: How far has the vendor come, say, in the last 5 years? (Assuming they've been around that long!) Do they innovate or follow? Past performance in this space (unlike financial investment advice!) is a good indicator of the future. If little has changed in the past (or can otherwise be described as lipstick on the proverbial pig), then expect more of the same. However, if the company made leaps and strides in its product development and innovation, that trajectory is more than likely to continue (and compound).
6. Tomorrow vs. Today: Too often, the assessment is made on what the product can or cannot do today, or what is cheaper today. That is way too short-sighted. The questions you need to ask yourself are: Will this company and team be able to deliver what our legal team needs, not just today, but tomorrow? Will this company set the standard for what the industry will need tomorrow? And have they shown that from the way they’ve worked in the past?
7. Data Advantage: Does the company you’re evaluating look like they have a data advantage that is going to be difficult for the competition to catch? 
8. AI and Roadmap: How has the company incorporated AI into its product? What’s their vision for the future in their space, and how confident are you (based on their history) that they can execute on that vision?
9. Your reputation matters: It’s worth repeating: Which team will you trust enough to put before your CLO, the legal exco, and your lawyers?   

It’s all about outcomes

I love the way that Jim Gray, VP of Legal Operations at SAP, summed up buying legal tech when he said: 

“At the end of the day, you're not just buying software, you're buying a business outcome.”

After working with Jim Gray and dozens of other Fortune 500 teams, I've learned that getting the right business outcomes means first finding the right partner. 

Cheers, 

-Jim

This post originally appeared in PERSUIT's Value Standard Newsletter. Join the 5,000+ legal leaders who get insights into the innovation shaping the legal landscape delivered to their inbox fortnightly.