Lean Legal: the road to smart growth

The good news is that legal can be optimized and contribute to business wins. We are here to help companies and legal teams find a better way of working with legal so that they can grow smarter, despite increasingly challenging business conditions. One way to achieve sustainable and responsible growth is by applying the concept of Lean Legal. 

Lean Legal is a framework for legal teams and businesses that helps them optimize legal processes to support their overall business goals. The result is smart growth - growth that is sustainable, long-term, and scalable. Throughout this article and several others, we’ll introduce PocketLaw’s Lean Legal framework, why we believe it’s business critical, and steps to get started on your journey to becoming lean.

Why you need to improve your legal processes now

Growth does not happen without legal. It’s required to hire people, protect software, close new customers, sell goods and services, ensure you comply with data protection laws, and so much more. With things moving faster than ever in the business world, your legal processes need to be able to keep up and support that growth – not be a blocker. The competition is always just around the corner, or there could be a new law overnight that will roll out by the end of the year that could impact your business. You need to be able to adapt – fast. There is no room for (legal) bottlenecks. 

Every day you spend not improving your legal processes you’re stunting your company’s growth. Growth is a necessity, but in the current market conditions, it’s no longer a “growth at all costs” mindset. It has to be sustainable, durable, and responsible and contribute to a healthy bottom line for the company. And more importantly, costs have to be limited, meaning companies must find new ways and work smarter. 1+1 needs to equal 3 or 10, not 1.5. 

In addition, there isn’t simply pressure from the authorities to be on top of your legal game – there is also pressure from customers and investors. Customers expect the brands they engage with to be fully compliant, more transparent, and secure. Investors expect the same. 

Legal has an impact on every part of the business, and it has the potential to be a complete enabler of progress and a safety net as the business grows. A way to start paving the way for legal to support growth is through Lean Legal. 

What is Lean Legal? 

Take a quick second to think through some of the current processes you have in place for legal. Take, for example, your employment processes, or your commercial agreements. Plot out all of the steps needed to ensure that you get it done and get it done correctly. How many steps is it? And how much risk for human error is there? How much time and resources go to waste every single day?

By not optimizing and reducing the steps in your legal processes, you are wasting time, risking errors, and risking being behind and non-compliant with laws as they update. All of that can, and most likely will lead to money and opportunities lost. You’re always running a little bit (or a lot) behind, even if you don’t realize it. Simply adding more people to try and fix the problem has failed in the past – so now it’s time for a change. 

For years, companies have invested in lean processes throughout the business, but have neglected legal. No one would dream of letting marketing spend money on advertisements without tracking progress, or relying on separate spreadsheets on various desktops to get the accounting done. Yet that is exactly how most companies choose to deal with legal. Why? Most companies don’t realize that a large portion of everyday legal work can be automated to save time and reduce risks, therefore they don’t invest in improvements. Now that needs to change.

The optimization of everyday legal is where Lean Legal comes in. The Lean Legal framework consists of 3 steps: Measure → Assess → Innovate

Adopting the framework helps legal teams and business owners have a more strategic and data-driven approach to working with legal. With the right insights and data into legal processes, you can optimize your workflows, more quickly act on opportunities, and allocate resources in a smarter way. The result is smart growth - growth that is sustainable, long-term, and scalable.

Let’s dive deeper into each of the steps, what they consist of, and the actions to take to become lean. 

Measure 

To understand whether or not what you are doing has the intended impact, you need to measure it. Having a way of measuring success is common for all other aspects of business already – sales have targets and KPIs they’re measured against, and so do marketing, customer success, and product. So why don’t we measure more when it comes to legal? 

Wouldn’t it be helpful to know: 

• How long does it take to draft a contract? 

• How many errors, on average, occur during the drafting process? 

• How long does it take to get a new contract to a signing customer? 

• How long does it take to get a contract signed after it’s sent? 

These, and so much more, are all things we can measure and improve upon in legal workflows.

With the Lean Legal framework, you should, 

Set up KPIs. Decide on key company metrics related to your legal processes that you can measure success against. For example, decrease the drafting time of contracts, increase the acceptance rate on contracts by 10%, or decrease negotiation time. If a team is running an experiment to decrease negotiation times, for example, make sure there are metrics in place for that experiment so you can properly measure its success. 

Incorporate soft metrics. Gather internal feedback from employees and customers about the contract process. These more qualitative data points will help add color to your KPIs and what is impacting them.  

Create company benchmarks. Creating benchmarks for legal helps you continue to measure and improve upon performance. For example, you don’t want the contract drafting time to exceed 15 minutes for certain because you know that at that point you aren’t using automation in the best way. Creating benchmarks also give teams a target to strive for and helps enforce a culture of continuous improvement. 

Once you’ve measured, there are probably areas where you want to re-assess and improve upon. 

Assess 

We recently asked you to think through your current legal process for one business need. Now think of all the points in that process where something could go wrong or get lost in translation. With a lack of clear processes and multiple stakeholders, things can get messy fast, so you need to have a way of keeping control. 

Assess where there is waste or inefficiency so that you can gain control and reduce risks. To do this,

Create a legal source of truth. You need to have everything stored in one central location with a clear structure and ownership. Having everything in one place saves you the headache of not knowing where contracts are stored and if they are stored securely. If you’re currently storing your contracts in Google Drive or something similar, assess how secure and risk-prone this process is. 

Automate tasks wherever you can and eliminate any unnecessary back-and-forth processes. When lengthy and complex processes are in place, they often take more resources than are needed. The most impactful way to allocate your resources better is to automate repetitive, low-complexity tasks with the tools that help you with everyday legal contracts from discovery to storage. Assess your current legal tech stack – is it helping you streamline your processes, or creating unnecessary barriers? Are you using tools to help you automate and reduce administrative tasks? 

Keep up-to-date with changes in the law.  Staying up-to-date allows you to hire people with the most up-to-date employment contracts or launch marketing campaigns in new markets without having to worry. You might not have the perfect solution at the moment you need it, but you need to ensure that you’re compliant enough so that you’re not risking severe penalties or damage to your brand. 

By gaining more control, you can allow yourself to be bolder and take on bigger risks. These two elements are crucial to driving hypergrowth.

Innovate 

The transformation of legal services and processes has barely begun. E-signing and first-generation contract lifecycle management (CLM) tools have initiated a change but are not even close to being able to support the needs of ambitious businesses. The old ways of working must be challenged and improved from a technology standpoint as well as from an internal processes standpoint. 

The cool thing is, that you have some amazing talent who can help you challenge and significantly improve how you work with legal bottlenecks and inefficiencies. Creating a working environment where it’s encouraged is key. To do that, 

Trust teams to experiment.  Leaders should set up company guardrails for each team to follow to create a safe-to-fail culture that encourages teams to experiment and strive for better ways of working. For legal teams, this means being given the space to experiment with new ways of working and tools to help them eliminate any bottlenecks. 

Create space for employees to challenge the current processes.Encourage other teams to speak about what they feel is inefficient with current processes, and to start a dialogue about how they can help make improvements. You can also set up easy-to-follow feedback loops like a survey that gets sent out internally to gather feedback and data anonymously. 

Update your legal tech stack. Experiment with how you can make your tech stack leaner and smarter. Experiment with how you can use the tools you have more effectively and/or introduce new tools that will further increase your efficiency. You will have fewer resources during these times, so make sure you have a lean tech stack that is helping you every step of the way. 

Having an innovative, daring mindset and company culture is key for Lean Legal. If teams are encouraged to get creative in every aspect of their work, especially in the context of legal, the company will be able to reach its goals faster and out-innovate the competition. If you are not trying to innovate and find new ways, we can guarantee there is a competitor out there who is. 

Lean Legal isn’t linear – it’s a framework that’s intended to help with continuous improvements. So once you’ve gone through the framework once, you can go through it again and measure, assess, and innovate. 

Achieving Smart Growth 

Smart growth: growth that is sustainable, built for long-term success, and scaleable. 

As we said earlier – growth is necessary, but it is no longer sustainable to have the “growth at all costs mindset.” We need to be smarter with how we allocate and spend our resources, which means getting control of your current legal, cultivating an innovative mindset in the company culture, and cutting waste and streamlining processes to increase efficiency. This is done by adopting the Lean Legal framework. 

We’ll keep diving deeper into Lean Legal, and we hope you want to keep learning too!