The next recession is knocking at the door and unfortunately for in-house lawyers, there’s no punchline. Instead, legal teams face tighter budgets and increased pressure to manage costs as businesses become increasingly vulnerable to disputes spurred by the downturn.
In-house lawyers must now grapple with the age-old question: how can you better manage your litigation costs? This was the focus of The Lawyer’s latest roundtable discussion, hosted in association with legal tech firm DISCO and attended by a number of in-house counsel from major UK organisations.
Here are three main takeaways.
- Seconds turn into minutes, minutes turn into hours
History has taught us that a recession often leads to contentious insolvency and restructuring, plus litigation involving professional negligence, white collar crime, and investigations. The next one is unlikely to be any different.
Several attendees noted that their first priority is to avoid litigation in the first place, while several others predicted that the number of claims they face, or will bring, is likely to go up. In the good times, businesses may waive their rights to litigate, as they focus more on building relationships or avoiding the stress that disputes bring. But when every penny starts to count, companies must fight the fight.
The days of lawyers presenting litigation costs to clients without justification are long gone. Now, in-house counsel must justify these to their boards.
What has changed since the last recession, however, is the sophisticated time-saving tools now available to legal teams. Legal technology has developed dramatically in recent years and in-house teams should look to partner directly with tech vendors to help support their strategic business aims.
In particular, the ability for large organisations to now have efficient systems in place to handle hundreds of cases is seen as a necessity. While much of this results in overall cost savings, as some attendees realised, keeping up with the latest technology can be tricky.
Among the latest tech tools is DISCO’s Ediscovery software, which the company says boasts sub-second search speed and eliminates loading delays when clicking between pages. It helps lawyers find their evidence faster and ultimately reach resolution in a more cost-effective way. To the costs themselves, many software providers still offer unpredictable pricing models for software, which hide additional charges for data expansion, analytics, or AI. With DISCO, its flat-rate, per-gigabyte pricing model eliminates surprises and allows for better budget planning. After all, if you can’t control or predict these costs, what’s the point of investing in the first place?
- The helpful robot in the room
Of course, you can’t talk about time-saving tech without mentioning AI and machine learning. Automating data-heavy and time intensive tasks – from document review to edisclosure – is an obvious route of managing legal costs and frees up lawyers to focus on more complex work.
Disclosure tends to be one of the most expensive and time-consuming aspects of litigation, taking away weeks of lawyers’ time, requiring tedious searching of company files by in-house counsel, all to be followed by accusations from the opposing side that your search was insufficient.
Attendees discussed how AI-powered software can be used to narrow down millions of documents to a much smaller, and potentially relevant, selection. The technology can clearly identify trends and provide insights before lawyers start diving into documents. It recoups the wasted time, effort and cost spent by lawyers to review a single document, only to decide it’s not relevant.
During the roundtable discussion, attendees questioned whether they could totally trust AI. They asked, if mistakes are to be made, isn’t it better for lawyers to make them? On the contrary, as DISCO vice president Tripp Hemphill pointed out, the English courts now require lawyers to explain to the court why they do not want to use this technology.
Embracing AI is clearly a way of securing a strong grip on costs. However, it is only as resourceful as the lawyer applying it. Upskilling lawyers to operate the platforms is one thing, another is knowing how it can streamline workflows.
Legal teams that carefully strategise and plan for data preservation, collection methodologies, and the review process will better avoid inconsistencies, duplication, and rework. The same goes for analysing datasets. AI and its findings are wasted if legal practitioners lack the skills to convert these insights into efficiencies. Investing in such training could mean greater speed and less legal spend in the long run.
Sponsor’s comment: Tripp Hemphill, vice president of enterprise markets at DISCO EMEA.
There were several subjects of discussion, everything from managing budgets, risk, and litigation strategy, but we returned to two themes time and again — how to optimise existing business while on the doorstep of an economic downturn, and how to maximise efficiency, enhance collaboration, and reduce litigation cost with AI-powered legal technology.
To mitigate the inherent risks associated with a possible recession, businesses should be looking closely at their supply chains — engaging in proactive conversations with suppliers, new and existing, to shore up possible weak points and get ahead of problems.
While market dynamics are stressful, technology could help drive efficiencies, mitigate risk, and inform strategic decisions. AI-powered, cloud-native tech should be ‘front and centre’ for corporations that want to maximise their own performance, in parallel to engaging outside counsel. AI-powered solutions can analyse vast quantities of data at breakneck speed, and departments could use the underlying platforms to then collaborate anywhere, anytime in a controlled, secure environment — driving efficiencies as pressures increase.
One final theme that we talked about throughout the night was a rallying call to corporations to be creative in the way they approached budgets — this wasn’t about doing more with less, but about finding creative solutions to in-sourcing work, and developing risk appetites to take account of early-settlement opportunities and arbitration strategy. It was to these areas that legal tech, AI-powered or not, could significantly help lighten the burden by automating low-value, repetitive work, providing rich streams of data, and helping achieve more favourable outcomes.
