Benefits of Legal Workflow Automation for the Legal Department
Introduction
According to reports by McKinsey,?50% of work can be automated?in today's age, and?31% of businesses?have undergone full automation of at least one function. The legal sector has been traditionally averse to technological adaptation and has focused on billing clients based on hours spent on their tasks.?
To generate higher revenue, law firms desire to maximise various tasks and hours to make their legal practice more profitable. Unfortunately, there are various non-billable hours, especially the ones involving administrative tasks that may, although consuming a significant portion of a firm's everyday schedule, remain non-compensated. According to data from 2020,?more than 63% of tasks?performed by legal professionals are repetitive, rules-based, and need no interpretation or judgment. According to some estimates, legal firms can reclaim 30 - 40 % of their time by automation.
What is Legal Automation?
Legal automation involves legal professionals and firms utilising software and technology to manage and execute various legal tasks or workflows while mitigating risks and increasing efficiency. Legal workflow automation is a subset of legal automation involving software for automating and streamlining the processing of legal documents and tasks. It usually involves the usage of a specialised medium/platform for storing and managing legal documents, generating agreements and contracts, and automating administrative tasks—for instance, approvals, data entry, searches, and filing.
What is the Necessity of Legal Workflow Automation in the Legal Workplace?
Historically, legal departments have been involved in a manual and siloed process for performing typical and regular workflows consisting of burdening administrative tasks.?
As rightly mentioned by?Kathy Zhu, the founder of Streamline AI, who shares her experience as an in-house lawyer, "Managing chaos that was flowing from all sides, including Slack and emails, without having a centralised place and tremendous lack of visibility where how much work I was completing every quarter, which business sending more work, and which got worse where I lead a team"
These seemingly minor issues hindered efficiency and led to critical challenges such as delayed response times, increased risk of overlooking essential tasks, and a potential breakdown in communication within the team. The lack of a centralised system affected not only quantifiable metrics of work completion but also the overall cohesion and effectiveness of the legal team.
Legal workflow automation can benefit the legal sector in the following ways:
What Are the Areas Where Legal workflow Automation Can Be Used?
Managing the Intake: The intake process for most law firms involves signing up/onboarding a new client, gathering basic data, contact information, and other relevant details for opening a case, starting a claim, or initiating legal work. This intake process in small law firms where the resources are low can be both exhausting, resource and time-consuming. This is where the legal workflow automation software can prove effective as it becomes easier for firms to cater to clients and businesses with minimal use of the limited workforce.
Handling the Voluminous Matters: For a regular legal professional, there is no other way except to adjust to the habit of going through piles and piles of paper, irrespective of whether it is a litigating or a transaction lawyer. Going through bundles and bundles of paper, reading between the lines, and finding the appropriate judgments to support a case is not an uncommon nightmare among legal professionals. However, legal workflow automation software can help in these and related scenarios by summarising the documents or looking for any errors that may have gone unnoticed by the human mind.
Processing Billing: Billing is crucial for a law firm to succeed and can be one of the most dreaded, repetitive, and time-consuming activities for a lawyer or a law firm. According to a 2022 report by Legal Trends, lawyers spend only 2.6 billable hours on non-billable tasks every day on average. Such activities include invoice preparation and sending, payment processing, and updating trust ledgers. By applying legal workflow automation software, these activities can be streamlined, freeing up time to spend on helping clients and logging higher billable hours.
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Managing Clients: We live in a digital millennium that has brought multiple opportunities at our fingertips as lawyers and legal professionals but has also increased cutthroat competition. Thus, losing clients to a competitor law firm can be costly regarding revenue generation and growth. But if the basic services offered by your firm are in similar lines to others, then it becomes necessary to differentiate yourself from your competitor while ensuring the retention of your clientele and its expansion at the same time. One of the most effective ways of achieving all these goals can be done by putting the right technology, aka legal workflow automation, in place.
What Are the Benefits of Legal Workflow Automation?
Compliance Enhancement: Every law business has to execute administrative tasks regularly. Many lawyers have to spend hours on low-value tasks like data entry, case administration, etc. A study conducted by Lexion of 450 in-house legal staff members discovered that many legal professionals spend too many hours on low-value work.?
Law firms deal with complicated legal issues. These circumstances necessitate that they stay updated on the latest rules and regulations. When managing an elevated amount of work, associates may experience difficulties managing many tasks and clients simultaneously. These tasks could be automated to save a significant amount of time and resources. When law firms use automation technologies to address these issues, associates can free up time to focus on innovative and value-added work. There are numerous legal workflow automation systems available for handling legal paperwork and automating repetitive operations such as document generation, review, and contract drafting.
Compliance enhancement is one of the perks of legal workflow automation since organisations will be able to organise all the rules and regulations, so they need not look them up every time. Legal teams can monitor and reduce compliance risks more efficiently by employing automation tools, delivering a more secure and efficient legal practice.
Risk Management & Organisation: The legal personnel must constantly examine risks and maintain the organisation's security, which might make it challenging to embrace large-scale change. However, as the demand for more efficient and adaptable services grows, more teams are turning to automation solutions as an effective approach to respond to these changes and satisfy business demands.
Most general counsels are doubtful of their department's capacity to manage complicated legal risks. FTI Consulting, in collaboration with Relativity, conducted a survey in which 100% of chief legal officers identified risk management as one of their top concerns and capacity challenges. Built-in safeguards can be used to encourage risk mitigation, ensure critical provisions are never overlooked, and raise knowledge of current best practices and compliance.
Making it easy to handle high-volume requests: Legal workflow automation is a critical asset in the legal field by supporting the efficient administration of high-volume requests. This game-changing technology streamlines and expedites the management of multiple questions, contributing to increased operational efficacy. The automated workflows operate as guides, seamlessly navigating through numerous steps and cutting processing time for high-volume requests by 30%.?
Furthermore, the system's focus on preserving accuracy and consistency results in a respectable 25% reduction in reported error rates across legal teams. Legal practitioners can shift their attention to demanding activities, resulting in increased productivity and faster response times. In short, legal workflow automation reduces workload and enhances the efficiency and efficacy of legal processes while dealing with a high volume of requests.
Improve team operational efficiency: Legal practitioners are frequently required to complete significant volumes of documentation while attempting to advance cases. Legal workflow automation may accelerate the process by automating all repetitive manual tasks (such as billing and form filing), freeing up lawyers' time. This can assist law firms in achieving a faster turnaround and increasing efficiency and productivity. Aside from saving time, an automated legal workflow can save costs by eliminating the need to hire several employees for regular documentation. Furthermore, these technologies can aid in the reduction of costs associated with the storage, printing, and other aspects of legal documents.
Real-time data for decision-making: By automating legal workflows, users may quickly manage the whole life cycle of a contract, from creation to review to approval and execution. All contract administration processes are centralised, making it easy for paralegals, general counsel, and chief financial officers to make precise decisions swiftly.
Client Intake and Onboarding: Legal workflow automation may improve everything, from initial contact with potential clients to intake, onboarding, and, eventually, scheduling. This also means that the clients will have a better experience. It ensures that the client receives clear, consistent information from the start of the process. Making sure they understand the plan of action, particularly what will be expected from them, reduces unneeded ambiguity and hassle and improves the attorney-client relationship.
According to a recent ABA Benchmark Study, 42% of law firms wait three or more days to respond to a prospective client. This underscores the requirement for a workflow management system to scale case management. Inefficient client intake, delays or lack of contact, and failing to keep clients updated on their issues can only make them dissatisfied. A law firm can complete these activities more efficiently and in less time by utilising automated systems.
Conclusion
Workflow automation has the potential to greatly improve the legal industry by removing redundant procedures, increasing efficiency, and reducing errors. By automating regular duties such as document preparation, data entry, and communication, legal practitioners can spend more time on higher-level tasks that require their skills. Embracing automation improves overall effectiveness in operations and allows legal practitioners to devote their skills where they are most needed, moving the industry into a new era distinguished by increased efficiency and better client service.