How to calculate a time-saving of 12-18% on contract automation?

Last week, I read a fascinating time-saving measurement by Lexoo about productivity improvements they achieved with AI ( not ). They expected some 50% of timesaving. Unfortunately, after measuring they concluded that the time saving with AI contract review was stranded at 5%.

It reminded me of a similar exercise we did in the early years of Weagree. Indeed, as Daniel van Binsbergen (CEO of Lexoo) established, improving legal services starts with data. What if legal counsel does not track their time? What if you do not have any data?

How to measure in the absence of data?

In the absence of time writing, a way to find the sweet spot for legal tech is a deductive process. To gain insights into your improvement potential, you need to reconstruct the work done in the past. A zigzag through your past (agenda, contracts folders, email folders). 

At Weagree, we developed a model to get as close as possible to how legal counsel spends their time: 

1. Make a rough categorisation of how working hours are spent (typically, a category should not represent less than 5-10% of the whole). Refer to the past two or three years.
2. Include ‘trivial’ aspects such as team meetings, preparing and giving presentations, work-travel time, and following training and education.
3. Assume an 8-hour working day, the holidays, being ill (stay home, visit doctor or dentist), lunchtime. List all small moments that are assumed work time (e.g. smoking a cigarette, getting another coffee, post-lunch walk or shopping).
4. Allow for large or exceptional projects (as they may happen every few years) and count them in on an annualised basis.
5. Include a category unidentifiable. This is the one you will need to explain, by going back and forth through your Outlook inbox, through your agenda and trying to capture the unidentified gap.
6. Identify the big categories (probably representing the day-to-day work), and try to break up each of them into sub-categories.
7. Now tune in on each of these and quantify them. Check your agenda, your email inbox, contracts folders, back and forth:

Ad 1. The 80/20% principle

There is a guiding principle for process improvements to focus on optimising the workload on which you spend 80% of your time. Therefore, time-spent categories taking less than 5-10% of the time, do probably not help optimise your process. At least not at the initial stage of legal ops.

In the 80% is potentially where the greatest improvements must be achieved. It does not mean that you need to ignore the small categories, as you need to go back and forth many times to get the full picture.

Since there is some seniority in your work, it is useful to align with colleagues in a similar role or position. Note that it makes little sense to compare the work of a compliance officer with that of a classic in-house legal counsel unless you seek to rearrange functions and roles.

Ad 2. and 3. The cannot-improve categories

There are those work types that are hard to beat. And you may not want to. You would quantify this by simply assigning time-based on the past reality. While little improvements are to be found in the trivial aspects of the workday, there may be significant leakage in the overall workday hours. Improving may be a matter of gamification: making a sport out of optimisation and rewarding achievements (making them visible).

Ad 4. Projects (that clutter insight)

There are projects that make the work of legal counsel extremely exciting, but as they are not as recurring, should be discarded. An M&A transaction, a major arbitration proceeding, a class action or a corporate financing project, implementing GDPR or ESG is exciting to work on, but also very time-consuming. But despite being exciting, even if undertaken in support of a law firm, such a project is a one-off event.