Inefficiency Costs: The High Price of Poor Legal Service Request Management for Businesses

Importance of efficient legal service request management for businesses

Having an efficient legal service request management process is of paramount importance for any business. It ensures that legal support is provided in a timely and accurate manner, minimizing risks and any legal disputes that may arise. By streamlining their request management, businesses can operate more smoothly and avoid unnecessary delays and complications.  

However, one of the largest inefficiency costs comes with legal not properly demonstrating their value to the business. Legal departments are understaffed to properly service the business and cannot always procure the resources they need to work efficiently. Oftentimes, legal must work within silos, isolating them from the business, leading to miscommunication and creating a poor perception of legal by the business. This strained relationship between legal and the business can easily be resolved, however with proper legal service request management.

Costs of poor legal service request management

When a legal department’s legal service request management process is optimized to handle requests from the business, it can lead to an improved relationship between the business and legal, helping them to secure the resources they need to drive efficiency. Through proper legal service request management, legal can clearly and effectively demonstrate their value and ease the tension that exists between them and the rest of the business. The inefficiency costs of poor legal service request management cost the legal department the most, hindering them from being viewed as a critical asset to the company.

Understanding the Costs of Inefficiency

1) Delays and missed deadlines

One cost of inefficient legal service request management is that it often leads to delays and missed deadlines, which can have cascading effects across the business. Delays in legal support can hinder key business operations by causing a bottleneck effect that disrupts project timelines, costing the business time and money. Missed deadlines can even result in more serious consequences such as contractual breaches, legal disputes and potential penalties that can expose the business to financial liabilities, damaging relationships with clients, partners and even employees. Not only does it cause the business a loss in time and money, but it furthers the already poor perception of legal in the business. It also perpetuates the mistrust other parts of the business have with the legal department, causing unnecessary tension while working together.

2) Frustrated stakeholders

2a. Negative impact on client relationships

Efficiency, or lack thereof, in legal service request management has a direct impact on an organization’s reputation. Delays, mistakes and the inability to meet client expectations erode trust and confidence in the company's ability to deliver on its promises. This can result in damaged relationships with company stakeholders such as clients and partners. Maintaining a strong reputation is crucial for long-term success and growth, and inefficient legal management practices can tarnish that reputation.

2b. Internal frustration among employees

One of the most important stakeholders in an organization, its employees, can also suffer greatly from poor legal service request management. Internal frustration can rise amongst employees when they are consistently facing bottlenecks and inefficiencies in legal service request management that can lead to a decrease in morale, productivity and overall job satisfaction. This can impact the overall organizational environment, hindering collaboration across departments, creating communication silos that further segregate departments within an organization.  

Additionally, as legal teams are often burdened with diverting their focus to low-value, administrative work, they can often feel demotivated and demoralized as they are tasked with working on simple contract work. Instead, lawyers should be using their well-earned expertise on more strategic or higher-value work, instead of time-consuming, oftentimes painful assignments.  

Identifying the Root Causes of Inefficiency

1) Lack of centralized system and communication

The absence of a centralized system and effective communication channels can lead to significant inefficiency costs for legal departments that fail to optimize their legal service request management. Without a centralized system, legal requests and tasks may become scattered across various platforms or email making it challenging to track, prioritize and allocate resources effectively. This decentralized approach can result in delays and lost or overlooked requests, leading to missed deadlines. In fact, legal operations professionals from companies like Equitable, Panasonic, Baxter and The New York Times have reported not having a centralized system for handling requests. 47% of legal teams handle their legal requests from ad hoc, unorganized channels, creating bottlenecks throughout the rest of the company.

2) Fragmented processes and information silos

One of the primary causes of inefficiency in legal service request management is the lack of a centralized system and communication. Without a unified platform, processes become fragmented, and information gets scattered across various channels and departments. Legal requests, documents and updates are stored in different locations, leading to delays in accessing critical information. This lack of centralization hampers productivity and creates unnecessary obstacles for legal teams.

3) Inefficient coordination between legal teams and other departments

Inefficient coordination between legal teams and other departments is another root cause of inefficiency. When legal matters are handled in isolation, without effective communication and collaboration with relevant stakeholders, it can result in misalignment and delays. Legal teams may struggle to obtain necessary input or clarifications from other departments, leading to incomplete or inaccurate legal support, leaving requests unresolved and stakeholders frustrated.

Manual and outdated workflows

Paper-based processes and reliance on emails

The reliance on manual processes that rely heavily on email communications contributes to inefficiency as well. Relying on email for request submissions, document sharing and updates can lead to miscommunications, version control issues and important information being buried in overflowing and unorganized inboxes.

Ineffective task tracking and follow-up methods

Without a proper system for tracking tasks and following up on legal requests, important actions and deadlines can slip through the cracks. Inefficiencies arise when there is no clear visibility into the status of requests, pending tasks or assigned responsibilities. Inadequate task tracking and follow-up methods make it difficult to hold individuals accountable and maintain transparency within the legal service request management process.

What Implementing Efficient LSRM Could Look Like

The best way to streamline and optimize legal service request management is by implementing legal workflow automation that successfully routes and directs legal requests with full visibility across the legal team. Here are some steps to take to successfully implement efficient LSRM:

• Identify your legal department’s needs
• Choose the best fit technology for your team/organization
• Find any potential objects to new technology adoption or change management
• Define the workflows and processes you would like to automate beforehand
• Once you have chosen your tech, train the legal team on how to use it
• Test and reiterate on your automated workflow creations
• Continuously monitor and evaluate your performance

For a deeper look into implementing efficient legal service request management across your organization with workflow automation, check out our blog on successfully implementing LSRM.

Case Studies: Success Stories of Efficient Legal Service Request Management

The most innovative legal departments are leveraging technology to streamline their legal service request management. Legal departments at organizations such as Telstra, Australia's leading telecommunications and technology company, noticed that their lawyers were spending an unprecedented amount of time answering repeat questions about legal processes or issues. With over 30,000 employees for the legal team to support, and a drive to optimize and enhance their service model and relationship with the business, their key priority was to find a way to leverage automation to resolve their legal requests.  

As a result, the legal team at Telstra built a digital legal front door for all legal engagements, allowing the telecommunications team to restore almost 4,000 hours (about 5 and a half months) in productivity, increasing lawyers’ capacities to focus on strategic counsel, negotiation and other complex work. To learn more about how Telstra was able to optimize their legal service request management to decrease cost efficiencies for the business, access our case study here.  

The Bottom Line: Saving Time and Money

Ultimately, optimizing your legal service request management strategy comes down to saving time and money.  

By ensuring that legal requirements are met, and regulations are followed, companies can minimize the likelihood of costly legal disputes or penalties. Quantifying the exact cost savings will depend on the specific industry, the nature of legal risks involved and the potential fines applicable.

Streamlining legal processes and adopting time-saving tools and technologies can boost productivity within legal departments and across the organization. By analyzing the time saved, which translates to increased lawyer hours and resources available for value-adding endeavors, and in certain instances, even enabling a decrease in staff due to reduced administrative workload, cost savings can be quantified. Through the automation of repetitive tasks, minimizing manual paperwork, and enhancing collaboration and communication, legal teams can achieve greater productivity within a shorter timeframe.

Implementing time-saving tools and streamlined processes empower legal teams to focus on higher-value work, strategic initiatives and complex legal matters. This can improve employee morale and job satisfaction within the legal department. Empowered employees are often more engaged, motivated and productive, which can positively impact overall organizational performance.

Conclusion

Poor legal service request management can result in an overall loss to the company, costing the business more than they bargained for. These costs can impact operational efficiency, increase expenses and harm the overall reputation of the organization.

To elevate the legal department to its rightful status as an advisor to the company, legal teams must work to optimize their legal service request management processes, as it is of the utmost importance of the business. By investing in streamlined processes, businesses can optimize their legal operations and position themselves for long-term success.