3 tips for pitching a legal spend management solution to your CEO
61% of surveyed CEOs in the 2021 EY Law Survey claimed they planned to make “significant investments into data and technology.” Yet 97% of general counsel respondents said they struggle to get C-suite approval for bringing on new legal technology.
So, what’s causing the disconnect? It’s a simple matter of framing.
While you obviously want a legal spend management system to boost your department’s performance, your CEO is unlikely to be swayed by that advantage alone. You’ve got to show your CEO the concrete value legal tech will bring to the entire company. The more you can approach your pitch as a business partner and not just a lawyer, the easier it’ll be to convince your CEO of the value of legal software.
1. Explain the negative impact of your current tools on the bottom line
It may feel a bit nerve-wracking to tell your CEO that issues with your team’s legal tools are damaging their performance and the bottom line. You don’t want to sound like you’re making excuses, but you also can’t expect your CEO to know what they don’t know. If they’re aware of how updated legal technology can solve critical business pain points, you’ll strengthen your case for an investment in it.
Harder to identify opportunities to save
When busy legal ops members have to manually scour rows of spreadsheet line items to find places to control costs, it’s impossible to catch all the opportunities to cut back. There’s also a good chance that the data they’re using is error-prone, which can result in decision-making that hurts the bottom line rather than helps it.
Comprehensive legal software pulls in real-time data across platforms, reducing duplicate and manual data entry errors and making it easy for legal to drill down into macro- and micro-level spend details. Team members can clearly examine legal spend across searchable dashboards that show details like spend by timekeeper, spend by practice area, spend for in-house counsel, and external spend. This visibility helps legal ops to both reduce and optimize legal spend.
For example, if a legal ops professional sees that document review by two law firms takes up most of the external spend budget, they can easily make the case to shift that work to an alternative legal service provider that’s less expensive but still high-quality.
These platforms also support further cost savings through automation, including law firm billing guidelines and volume discounts. SimpleLegal found that users who implemented just these two processes saved an average of 8.4% on legal costs. Can your CEO say the same thing about the ROI of spreadsheets?
Increased burnout and turnover
An investment in technology that supports employees is a critical retention strategy, especially as organizations fight to attract and keep talent amid the Great Resignation. According to Adobe Workfront, 49% of respondents said they’re likely to resign “if they’re unhappy or frustrated” with their company’s digital tools. Bringing on an automated legal spend management solution streamlines workflows and gives legal ops time back to focus on legal work they enjoy and find meaningful — a critical component in employee engagement.
When employees feel overworked and are drowning in repetitive, low-level tasks, they’re more likely to burn out or resign. When employees only have access to manual tools like spreadsheets and cumbersome legacy tech, they have to spend more time on admin tasks like data entry and compiling reports — and they’re already strapped for time as it is. According to the Corporate Legal Operations Consortium, the average full-time legal ops professional supported 23 other employees in 2021.
If your CEO still balks at the cost of new legal technology, tell them how much employee burnout costs companies: between $120 to $190 billion each year, according to the Stanford Social Innovation Review. That’s much, much higher than the cost of a legal spend management solution.
2. Emphasize how legal spend management solutions support organizational goals
The more you can tie legal tech’s value to high-level company priorities, the better the chance you’ll have at getting C-suite support. CEOs expect their legal department leaders — and by extension, their in-house legal teams — to function more as business analysts and less as legal cost controllers. Explain to your CEO how a legal spend management solution can create better alignment between the department and overarching business goals, like supporting an agile enterprise model and a diverse and inclusive workforce.
Increased adaptability
An agile business — one that can seamlessly adjust its business strategies and resulting actions as circumstances change — is more likely to thrive. The COVID-19 pandemic was a prime example of this need for corporate adaptability. Companies adjusted to everything from remote work to new merchandise pick-up options. For legal ops teams, legal spend management technology helps businesses remain flexible and proactively respond to unforeseen events, providing real-time data and reports in one accessible location.
When legal has to manually update and keep track of critical metrics, there’s a good chance that there’ll be delays as well as data entry errors. These lags and inaccuracies create a foundation of unreliable business intelligence, leading to ineffective decisions at both the department and C-suite levels. Over time, these choices can quickly spell disaster for a company, especially in a turbulent economic environment.
Automated data updates in legal spend tech allow corporate law departments to be confident that their reports will include the most accurate and current information. This enables legal and executives to make the most strategic decisions that support the best interests of the business.
With legal tech that centralizes information and reduces data silos, teams can spend more time brainstorming proactive solutions to problems and sharing those proposals with higher-ups. The comprehensive nature of a legal spend management solution also makes it much easier for teams to collaborate, especially in remote environments. A single source of truth means less back and forth between departments trying to share information — teams have access to the data they need when they need it.
Stronger diversity, equity, and inclusion
The 2020 murder of George Floyd and resulting Black Lives Matter protests acted as a catalyst for corporate America, prompting a renewed focus on social justice efforts. Part of this work includes striving to build more diverse, equitable, and inclusive workplaces. Legal technology can play a key role in supporting an organization’s DE&I goals by helping legal teams objectively measure and review outside counsel diversity.
If your company works with legal vendors that don’t share the same commitment to improving DE&I, that sends a negative message to employees, to stakeholders, and to the public. Legal software will let you clearly see who’s putting in the work to change, allowing you to store and track vendor diversity information over time. This includes factors such as race, gender, and sexual orientation — and you can see how these areas vary across different positions.
Armed with this knowledge, legal can make more informed choices about their outside counsel to ensure they stay in alignment with their company’s core values and “walk the walk” of social progress.
3. Demonstrate how legal tech helps non-legal departments
Just because legal spend management software has “legal” in its name doesn’t mean it only helps the legal team. Switching to an integrated legal platform adds value across the enterprise, helping different teams do their jobs more efficiently and improve collaboration.
For instance, when legal and finance don’t share a single source of truth for legal spend data, finance is forced to create budgets based more on educated guesswork than on facts. This lack of insight results in budgets that are easily derailed by unanticipated invoices and incorrect accruals. As finance scrambles to resolve these issues with legal and its vendors, their working relationship with legal becomes strained.
A legal spend management solution resolves these problems. The software pulls in spend data from multiple platforms into one place, making it easy for finance to find the past and present legal spend data they need — all without waiting for legal to get back to them. With everything from accrual and invoice statuses to spend by vendor at their fingertips, finance has the facts they need to make accurate monthly and yearly budget predictions that also have a cushion for any higher-than-expected charges.
For even more benefits to share with your CEO, including how legal tech also helps sales, IT, and the C-suite, check out this blog post.
A legal spend management solution will help your legal team to scale
After you use these tips to nail your legal software pitch and get CEO approval, now comes the fun part: choosing which legal tech will deliver the best ROI and help your team scale seamlessly along with your organization.
At SimpleLegal, our customizable platform keeps legal spend management and legal e-billing, well, simple. Thanks to our user-friendly design and included training, your team can quickly hit the ground running and start delivering new business value right away. And as your team grows, you can grow the platform’s capabilities with add-on features designed to meet its unique needs.
But don’t just take our word for it — head on over to our Success Stories to see how SimpleLegal has transformed corporate legal departments at companies like Instacart and Crocs.