Contracts represent the frontend business-enabling interface of a corporate legal department with the enterprise – while
the core of the department engine is formed of matter and compliance management. Namely, managing the disparate issues
and disputes which arise, and ensuring all compliances and regulations are adhered to. This is what keeps the business
purring smoothly as it moves towards creating stakeholder value. Let's take a sneak peek into how these realms are
evolving in 2024 and beyond.
Emerging trends
There are a few intersecting trends that have been combined in the recent past, all of which are expected to come to
a
head in the coming months & years. Firstly, the increasing complexity & uncertainty in business, combined with the
resultant complexity of agreements and contracts is one key trend. Management tries to cover all eventualities in
the
contracts given the complex business atmosphere, resulting in complex multi-tiered contractual obligations on all
parties. This naturally increases slippages in obligations and resulting disputes.
The second trend is the rapidly evolving regulatory landscape on various aspects impacting business, like competition,
privacy, data security, business regulations and barriers, international trade agreements and more. Keeping track of all
of these is fast becoming a serious challenge. The third allied trend is business failures, partnership breakdowns,
rising economic concerns & geopolitical concerns. And the fourth intersecting trend has been a pandemic-induced spate of
gut-wrenching business changes, for example, supply chain disruptions.
In addition, a fifth related trend has been rising employee and consumer activism that has gone onto a formalised
dispute in many industries and markets. But perhaps the most challenging trend is the rising incidence of coordinated
and simultaneous disputes, at times across jurisdictions. The net result of these six intersecting trends has been to
catapult matter management into increasing relevance.
The winds of change
The above six trends have increased the workload on the legal departments of organisations manifold; this is complicated
further by distributed and at times segregated operational hubs. In a regime of lower workloads, it was usually
manageable but the lack of a single source of truth and a single coordinated response mechanism has started to act as a
drain on efficiency over the recent years.
The above-distributed mechanism meant non-standard processes, lack of a basic SOP, delays in preparing responses due to
widely dispersed data across offices and hubs, and a resultant lack of visibility. It also meant slippages in compliance
issues or a lack of top-down clarity on the status of the needed compliances. In the changed business atmosphere, this
tend to impact productivity and efficiency parameters and rise to an incipient business risk. Therefore, there has come
about an increasing relevance of and focus on matter and compliance software.
The way ahead: 2024 and beyond
The net result from all of the above has been a co-terminus of the realization of the pain points above with the rise of
the field of legal operations, which has now taken centre stage. Another result is that it has brought workflows to the
centre and the focus of attention. In the coming months and years, these will remain centre stage, as an increasing
number of organizations take to creating standardized processes and workflows that automate and connect the disparate
parts of the enterprise, reducing multiple flows and discontinuous disaggregated data sets, reducing redundancy of work
and also reducing manual work, creating cost and work efficiencies.
This will move in tandem with the rise of the centralized repository, a single source of truth for all legal
operations-related work, not just contracts or matters. Another trend that is rising, seen above as of the six
intersecting trends, is the pressure to increase efficiencies, this means more efficient spend management is going to be
key, with the need to manage legal costs much more effectively. Thus, compliance, matters and spend management are sure
to be on a rising graph. The supporting evidence for this can be seen in the increasing budgetary support for legal
technology, as well as the increasing prevalence of social media mentions about Matter Management, as per the 2023
Gartner market guide on the CLO market.
As per Gartner, the legal technology budget is set to rise threefold to 12% of the total legal budget by 2025. Another
trend identified in the same article is the expected automation of 50% of legal workload by 2025. An insight partners
report also expects the case management software market size to grow at a CAGR of 12.4% annually till 2028; various
industry reports similarly predict a CAGR of around 10% to 13% growth annually in compliance management. The numbers for
spend management are expected to be a CAGR of 10.3%.
Conclusion
The key pain points of operational workloads, distributed datasets and non-standard multiple processes within the
corporate legal departments have been felt and responded to admirably by the industry as a whole, combined with an
increasing response from customers who had begun to feel the pinch. The response can be seen in the increasing adoption
of Case and Matter suites, Spend and Compliance suites as evidenced by the market growth expectation numbers above,
which match the contract management growth expectation which is also expected to be around 10% to 12%.
Thus, while contract management solutions currently are the frontispiece of the legal technology market, the trends and
numbers above seem to indicate that we can see far more balanced growth numbers in the years ahead – also evidenced by
the social media trend identified by Gartner. This augurs well for the industry as well as for business in general,
since legal transformation is key to attaining full digital maturity – and legal transformation cannot proceed without a
centralised standardised approach to matters, cases, spends and compliances. The legal technology industry can look
forward to a high CAGR growth in this segment for some time to come.
RazorSign
