How GCs can embrace and drive the tech revolution?
Views as to the future of technology and the world of the general counsel tend to side with one of two extremes. Some picture a futuristic era where artificial intelligence replaces lawyers altogether, and others dismiss it as a technological jump too far off or far-fetched to even consider. Most heads of legal, however, seem to acknowledge that the opportunity offered by technology lies somewhere in the middle. With expectations of general counsel now going well beyond traditional risk and compliance responsibilities to encompass much broader accountabilities for assisting the board in strategy, comes new pressures in terms of mitigating risks and realizing value. This has to be achieved with fewer resources and greater efficiency than ever before. More and more, general counsel are aiming to incorporate technology solutions into their departments and daily processes in order to provide CEOs and boards with efficient and innovative solutions for addressing legal challenges and uncovering opportunities for the businesses they serve.
According to KPMG research1, 65 percent of CEOs see technology and digital disruption as an opportunity and not a threat to their organizations, and they are likely to look to their senior employees to deliver this change. It appears that most general counsel are eager to do so. Recent research from Thomson Reuters suggests general counsel2 are not only aware of the demands to embrace technology, but are also taking active steps to incorporate technology solutions into their departments. Two-thirds (67 percent) of general counsel say they are confident in and ready to try new technology, and only two percent report a lack of confidence when it comes to using new technology.
Regardless of whether they are actively taking steps already, the research suggests that general counsel are painfully aware of the consequences of not embracing technology, especially in these highly pressured economic times in which most businesses are looking to operate as efficiently as possible. An opportunity now exists for general counsel to become leaders in driving business digitalization by building a technology-powered legal department that can deliver more value to their organizations in terms of both efficiency and insights.
Three ways that general counsel can successfully embrace technology
To Gain Efficiencies
Less than 15 percent3 of general counsel believe their legal departments are effectively using big data to deliver legal services. However, adding extra head count in order to do so is not a desirable option in many cases.
Thus, general counsel tend to incorporate technology solutions in stages. At a foundational level, general counsel are equipping their legal departments to leverage existing technology platforms within the organization, including ERP data, workflow tools and other solutions already in place, typically in finance, HR, tax or treasury. Transformation programs in other departments have typically been ahead of legal. This requires a complementary effort to recruit and/or upskill legal talent to use the technology in ways that realize value for the legal department and the organization at large, which is not always easy. More technologically advanced legal departments may purchase technology outright, license specific legal technology or outsource aspects of a legal process to a service provider that has already invested in these technologies.
In all cases, general counsel have become more active in engaging their chief tax officers and chief financial officers in technology purchase decisions regarding the right technology investments to help improve productivity and realize new opportunities for value-adding insights. One example is forensic technology, an increasingly common tool used by legal teams to help sift and clean large data sets. One such tool is Relativity, e-discovery software that allows legal professionals to process large numbers of contracts, making it easier to find specific information they are seeking within those contracts relevant to a transaction or deal.
Another application used by many firms, including KPMG Global Legal Services, is HighQ, which helps lawyers quickly and securely share large or sensitive files with internal and external users anywhere in the world. It provides a platform on which customized digital legal solutions can be built. KPMG International is working with its internal software development and legal teams across the KPMG member firm network to digitize processes and build entirely new applications that are specific to legal within the HighQ platform. Some of these are already being leveraged successfully in live member firm engagements with multinational organizations.
For example, on a significant cross-border reorganization spanning multiple jurisdictions, KPMG is utilizing the platform to capture important diligence and other project information. This improves the way the project is managed by increasing efficiency and enhancing visibility for the general counsel and advisors at every stage, a benefit that carries over to other projects as well. In other cases, general counsels and their departments are using the platform directly to help manage large transactions, support restructuring or repapering processes to mitigate the challenges of geopolitical uncertainties, such as Brexit, and to achieve broader efficiencies in daily workloads and task management within their departments.
To Increase Transparency
Technology can also help measure productivity and activity, providing valuable KPI data to help optimize the legal resources available to an organization. In-house matter management (activities involved in managing all aspects of the corporate legal practice) platforms will increasingly help general counsels surface important management information and oversee their legal workflows, automatically triaging documents and processes so that the right lawyers or nonlawyers within an organization are able to progress, process or negotiate legal documentation, as required.
Legislative trends and requirements such as the move to common reporting standards, the Automatic Exchange of Information and the Foreign Account Tax Compliance Act also require the open and transparent exchange of information across jurisdictions.
Countries impose different reporting deadlines, require different file formats or data points, demand different submission methods and often do not operate test facilities. Such inconsistencies and uncertainties can make effective management of these processes a challenge without a reliable technology solution in place to provide the end-to-end visibility and adaptability needed to adjust to ongoing changes and shifting requirements.
To Promote Integration
The legal department is a critical function for business activity within an organization. No matter what an organization does today or seeks to do in the future, it faces ongoing and increasing regulatory, compliance, risk and commercial considerations that need to be reviewed and considered continually. A large percentage of an organization’s day-to-day business, and an even larger percentage of its most important business decisions, will, in some way, involve the legal function.
By utilizing technology solutions to harness the data contained in documents that pass the legal team’s desk and/or to automate repetitive tasks such as the completion of simpler legal documents, general counsel and their departments can free up time to perform analysis, and deliver meaningful strategic insights into the businesses in which they operate. They can shift away from a pure compliance and risk function to focus on providing more valuable strategic expertise to the board, executive leadership and other key stakeholders across the business.
An example of this technology application offered by KPMG is “Click and Rule.” The service involves reviewing and redrafting relevant corporate policies, streamlining key content and presenting that content in an intuitive, searchable digital format. This provides employees with digital / app-based access to critical corporate policy content, promoting greater transparency, understanding and improved compliance. The revisions ensure the policy content and structure is reduced to its core elements, providing a more precise, instructive and digestible service to employees. Policies do not lose their essential content, but are stripped of unnecessary elements to ensure efficient communication of policy content in an easy-to-use web-application through an employee’s computer or an app on their mobile device. A practical application of the tool would be if an employee needs information on an anti-corruption policy before a client dinner. The employee can check Click and Rule for a quick answer on allowed or prohibited business hospitality invitations, real-time.
Embracing the Revolution
General counsel stand to be powerful agents of transformation for their organization if they are willing to be at the forefront when it comes to the digitalization of business processes, the uncovering of insights in organizational data and strategic automation of tasks in ways that promote greater efficiency and transparency. Being a technology expert need not be a prerequisite to being a general counsel, but leading general counsel will work with partners to understand how technology can be incorporated into the legal department in strategic and transformational ways that can and will add more value into the business and beyond. As a global industry estimated to be in excess of $600 billion, the impact of legal innovation and digital transformation in the legal sector cannot be underestimated.
Talking about the technological revolution is one thing. However, for the general counsel to be ultimately successful in today’s complex business environment, they will need to actively embrace new technologies and take a leadership role in uncovering the ways in which these technologies can improve their functions now and in the future.
1 KPMG Global CEO Outlook 2017: Disrupt and grow
2 Thomson Reuters: Legal Department 2025 - Ready or Not: Artificial Intelligence and Corporate Legal Departments (2017)
3 Thomson Reuters: Legal Department 2025 - Ready or Not: Artificial Intelligence and Corporate Legal Departments (2017)
*This article was first published in Law360.
KPMG in the UK