Digital tools and systems used for legal purposes in an organization can boost their overall revenues and other returns in several ways. However, how does an organization know the exact ROI of legal tech? Here are some of the questions that will make the calculation simpler.
Like many other types of organizations, law firms, too, use modern information processing and communication technologies to boost their IT-related work. Technologies such as AI are also being used in such firms for various purposes such as monitoring expenditure, budgeting and the handling of knowledge management systems.
AI can be used for several other tasks in the legal industry too. For instance, AI can be used to review old court cases and automate legal research, contract analysis, litigation document creation and evaluation, amongst other things.
However, one must also understand that legal ROI may not just be of use exclusively for legal firms.
So, when you calculate the legal ROI of the tools and technologies in your firm, what are the things that must be considered to get the most accurate evaluation?
1) How Much Time Does Your Organization Save Using Legal Tech?
Time is money, especially in the legal industry. Law firms and other organizations using legal tech understand the value of time, if nothing else. So, every device or tool that helps cut down on time taken for various operations matters for organizations. For example, a faster, more expensive wi-fi connection for the legal department, which speeds up Zoom-based virtual courtroom trials and other operations, is a profit and revenue-generating technology. So, it must be considered as part of legal tech. Similarly, other technologies that help save time must be considered while making your balance sheet at the end of the year.
2) Does Your Technology Make Compliance-Related Savings?
Legal firms need to be careful while handling their clients’ personal data while representing them legally. Data security is of paramount importance and, therefore, money must be invested by legal firms and legal departments to ensure it for themselves and their clients. Moreover, the costs of security breaches and other types of data-related non-compliance may prove to be more financially damaging than the money spent on cybersecurity and data privacy. So, the money saved due to compliance is definitely an earning and could be included in the ROI.
3) How Easy is it to Use Legal Technology?
Ease of usage and implementation is a must for any technology in any firm. Legal cases are incredibly complex anyway. So, the technology that causes frequent losses of time (downtimes, complicated user interface) is not a revenue generator for organizations.
The calculation of ROI may be difficult for organizations to compute as they may not know what to categorize as legal tech. However, whenever such organizations feel stuck, they must ask themselves whether any technology or tool brings money or saves time while assisting, directly or indirectly, in legal operations. If yes, such technology qualifies as legal tech and contributes to the ROI of the organization.
