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From Cost to Profit: How Technology Can Help Corporate Legal Departments Support the Larger Business

Published on : 19/04/2023 19 April Apr 04 2023
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Legal departments are often seen as a necessary cost center in a company, and the question of their value is often raised, especially when they are not seen as "revenue-generating." However, the legal department's role in any organization goes beyond just ensuring compliance with the law.

What role does the legal department play?

The legal department plays a critical role in managing risk, protecting the company's reputation, and contributing to the company's overall success.


The most obvious way that legal departments justify their existence is by minimizing the company's exposure to legal risks.
  • This involves identifying and addressing legal issues before they become full-blown legal problems. Legal departments help companies navigate complex legal landscapes and ensure compliance with laws and regulations.
  • They also help companies understand the legal implications of their actions, such as when they enter into contracts or pursue new business opportunities.
     

All of this helps the company reduce costs. By identifying and addressing legal issues early on, legal departments can prevent expensive legal disputes from arising. They can also negotiate more favorable contracts and settlements, which can save the company money in the long run.

Legal departments also help protect the company's reputation.

A single legal issue can significantly impact a company's brand and reputation. Legal departments work to prevent these issues from arising and to manage them effectively if they do occur. This can involve crisis management, media relations, and other strategies to protect the company's image.
 

The legal Department provides legal guidance

The corporate legal department not only ensures the company's long-term success when facing outside legal threats but by providing legal guidance and advice to other departments within the company. For example, legal departments can provide training on legal issues to employees, which can help them avoid legal risks and make informed decisions. They can also help other departments navigate legal issues, such as employment law, and ensure that their actions comply with applicable laws and regulations.

All of these efforts by the legal department contribute to the company's overall strategic objectives. They can help enter new markets, negotiate complex deals, and protect valuable intellectual property. They can also help companies understand the legal implications of emerging technologies and trends, such as data privacy and cybersecurity.
 

And what about innovation?

Finally, legal departments can also help companies innovate. This may seem like an unusual role for a legal department, but it is becoming increasingly important in today's business environment.

Legal departments can help companies understand the legal implications of emerging technologies and trends, such as artificial intelligence and blockchain. They can also help companies navigate legal issues related to intellectual property and other areas that are critical to innovation.

And speaking of innovation, the addition of technology within the legal department itself can often be a key component in helping them pivot from being cost centers to becoming profit centers.

Corporate legal departments can generate revenue by adding technology in several ways, including:


Automating routine tasks

One of the biggest ways that technology can help generate revenue for corporate legal departments is by automating routine and time-consuming tasks. By using artificial intelligence (AI) and machine learning (ML) tools, legal departments can automate tasks such as contract review and drafting, legal research, and eDiscovery. This can help save time and resources, allowing lawyers to focus on higher-value work that generates revenue.


Improving efficiency

Technology can also help improve the efficiency of corporate legal departments. By streamlining workflows and reducing the time it takes to complete tasks, technology can help legal teams handle more work in less time, which can help increase revenue.


Enhancing data analysis

Technology can help corporate legal departments analyze data more effectively, which can help identify patterns and trends that can be used to generate revenue. For example, data analysis tools can help identify areas where the company is vulnerable to legal risks, allowing legal teams to proactively address those risks and prevent legal issues from arising.


Providing better client service

By leveraging technology to provide better client service, corporate legal departments can attract and retain more clients, which can help generate revenue. For example, by using client portals and online communication tools, legal teams can provide clients with real-time updates on their cases and streamline communication.


Reducing costs

To conclude, technology can help corporate legal departments reduce costs, which can indirectly help generate revenue. By reducing the need for manual labor and improving efficiency, legal teams can save money on staffing and other expenses, which can be reinvested in revenue-generating activities.

Legal departments play a critical role in any organization, and their value goes beyond just ensuring compliance with the law.

Overall, legal departments help:
  • Managing risk,
  • Protecting the company's reputation,
  • Supporting strategic objectives,
  • Ensuring long-term success,
  • Saving money,
  • Promoting innovation.

While they may not be "revenue-generating" in the traditional sense, legal departments are essential to a company's overall success. By understanding the critical role of legal departments, companies can ensure they receive the support and resources they need to thrive in today's complex business environment.
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