The pandemic in 2020 impacted every single industry and the legal industry in particular experienced rapid digital transformation due to the COVID-19 stay-at-home mandates. It forced many legal teams to take a close look at their software and re-evaluate processes that are now outdated.
2021 Predictions from Eric Laughlin, CEO of Agiloft
1) Goodbye legal tech, hello enterprise software
In the digital age, contracts are no longer considered static documents. Contracts are real-time data that serves as the construction manual for an entire business. Today, it is essential for businesses to transition from solely collecting data to actively using it to gain insights and improve internal and external processes. To achieve this level of contract visibility and provide proactive notifications, contract lifecycle management (CLM) is now relied on more than ever for legal teams, especially when COVID-19 forced businesses’ operations to go completely digital.
To manage contracts and compliance risk, legal tech buyers are realizing that what they need is the full power of enterprise software, configured to address the needs of the legal community. Enterprise CLM has proven this notion with users across the enterprise and connections to the rest of the enterprise tech infrastructure. In 2021, approaching legal tech as enterprise software will have a major impact on the way legal departments select, purchase, and implement technology, and how to measure the value achievements derived from that software.
2) Enterprises must plan for increased regulatory scrutiny and new geopolitical risks in 2021
In 2020, many general counsels took time to look back at enterprise contracts, taking legal inventory to ensure organizations were protected during the economic downturn caused by the pandemic. In addition, data regulations such as GDPR and CCPA, along with California’s new privacy law CPRA forced businesses to take a hard look at how they manage customer and employee data and documents. In 2021, there will be more data/privacy regulations passed that domestic and international companies will need to account for in in their contracts. 2021 will also be impacted by geopolitical risks (such as the transition of power in the U.S. presidential administration, cyberattacks from Russia, trade tensions with China, etc.) that require global businesses to be extra prepared to protect themselves from risk.
To address these challenges, AI-powered contract lifecycle management (CLM) should not be overlooked, as it can ensure that the enterprise is meeting compliance standards and is protected legally. If you look at the top 10,000 global enterprises, roughly 15% of them say that they have enterprise-wide CLM and about 85% say that they will implement it in the next five years. Due to new regulatory consequences and 2020’s geopolitical risks, we are seeing demand for CLM increase at the enterprise level. In previous years, a single division or department would invest in a CLM tool, but in 2021, we’ll see CLM immediately rolling out across the entire enterprise.
2021 Prediction from Christian Thun, VP of Engineering and Product Management at Agiloft
1) AI will become the standard for contract generation and legal processes in the workplace
In 2021, we will finally start to see the results of tackling AI challenges, and as a result, AI will be much more accessible to companies of all different sizes across industries. For instance, the number of patent applications that concern AI has roughly doubled from 30,000 to 60,000 in the past 15 years, and AI-related inventions now account for 15% of overall applications. The coming year will bring new AI-driven solutions for contract generation and management, even in typically late-adopting industries such as legal. Due to COVID-19, attorneys were forced to work from home and there was an industry-wide explosion in the adoption of tech tools, out of necessity. It’s now clear that AI technology can benefit the legal industry in many ways and similar to other industries, increased digital transformation automation of administrative tasks leads to greater workplace efficiency.