Digital Transformation: New Report Sees Lawyers as Agents of Change

How are companies addressing the rapidly evolving need for digital transformation, and how can lawyers lead the way to help them to innovate? These are questions answered by a new report co-created by Microsoft and multi-national law firm Linklaters.

What is Digital Transformation?

Digital transformation is an umbrella term that refers to ways that companies are harnessing new technology to make themselves more agile, efficient and able to provide a more effective service for clients and customers. The ‘transformation’ doesn’t have to mean a complete shift in the way that the business operates to a completely digital model (though it can include this), but can refer to simple changes of practice e.g. moving storage to the Cloud.

It’s clear that lawyers do play an important role in this process, particularly in the area of data handling and protection, but the report argues that lawyers can play a much more leading role, helping to make key decisions to help companies move forward in a way that best suits their unique business model, while remaining secure and compliant.

Where Legal Comes In

The legal side of business development has often been perceived as risk-averse and an obstacle to innovation, being historically slower to adapt to new technology and changing business practices. Yet the findings show that legal, risk and compliance professionals are considered to be more influential than in-house technology staff and tech consultants. Lawyers are in a unique position to be able to understand all the implications, and to collaborate and engage with business leaders and stakeholders to help design and implement the most effective and most innovative technological solutions for the company.

The report presents three point Digital Transformation Practice Principles designed to equip lawyers (both in-house and in private practice) with the tools and the mindset to become agents of change in a world of digital transformation. Let’s take a look at each.

#1 Creating Clarity in Times of Uncertainty

In what will likely be a familiar scenario for many lawyers reading this, the process of digital transformation usually begins with a solution being put forward by business leaders and technology departments with the question ‘Can we do this?’. There will be pressure to provide a clear and comprehensive answer fairly rapidly. When faced with a lack of familiarity with the technology in question, the instinct may be to advise against what is being proposed due the organisation not being ‘ready’ and the amount of perceived risk of the unknown. Instead, see an opportunity to learn, up-skill and train up in new technological trends within the industry.

The response to the question of ‘can we?’ should be ‘let’s learn how’, or ‘no, but here is something even better we can do’. Another aspect of providing clarity involves applying currents rules and regulations to digital advancements, and it will be up to lawyers to analyse these new scenarios and educate the relevant departments and users. A lawyer’s role is one of constant learning and updating knowledge, and with new technology impacting on so many areas of law it is important that legal teams keep pace and are open to learn about what is next on the horizon.

#2 Building Partnerships for Innovation

Lawyers and legal teams cannot exist in isolation within a company, and it is important to build close relationships with technological departments and any other key stakeholders in order to drive innovation and keep fulfilling the business aims. Lawyers bring necessary pragmatism and consideration to key business decisions, and this approach and level of knowledge is welcomed by other departments when there exists a mutual understanding of the characteristics and aims of each.

Digital transformation isn’t just a job for the tech team which then gets the once over by the legal team; it needs to be a collaborative effort between all stakeholders – commercial, IT, security, legal, compliance – at every step of the journey. One of the recommendations in the Linklaters/Microsoft report for better digital transformation is ‘compliance by design’, which considers legal and regulatory compliance throughout the whole transformation process, instead of picking up on issues to be addressed at a late stage.

#3 Delivering Success – Negotiation and Deal Discipline

A lawyer’s skills and experience in negotiation and deal brokering will be called upon to ensure that the digital transformation deal being pursued doesn’t collapse near completion. This means not only learning and training up on the new technology as previously discussed, but also ensuring knowledge of data protection, intellectual property, contracting structures, and exit and transition management are all up to scratch in preparation for the discussions ahead. Deal discipline will also be a crucial factor of the transformation process, i.e. having good project management and securing the availability of the right stakeholders for the appropriate meetings, setting agendas before negotiation meetings so that everyone at the table is on the same page, and having discipline to focus the negotiations on the issues that are important to your organisation.

Lawyers and legal departments have the unique advantages of influence, knowledge and access to drive digital transformation. If they answer the above calls to action they can become leaders of innovation and change within their organisation and for their clients.

Lawyers: Agents of Change in a World of Digital Transformation is authored by Adrian Fisher, Counsel TMT, Linklaters, and Andrew Cooke, Assistant General Counsel & Regional Director Legal Affairs, Microsoft Asia. The full report includes a primer on digital transformation, key legal and commercial issues in digital transformation deals, Microsoft’s Safe Cloud Principles, and a checklist for lawyers for each of the three digital transformation practices principles. Click here to register to download.