How to Talk to Your CFO about Legal Tech
As legal tech revolutionizes the industry, offering new avenues for speed, accuracy, and quality assurance in legal work, often, one roadblock remains - the budget-minded CFO.
A Chief Financial Officer has three fundamental tasks: maintaining the books and records of the company, financial reporting, and ensuring statutory compliance. And the best CFOs take their role incredibly seriously. It’s commonly said that when asking a CFO if a glass is half full or half empty, she responds, “It’s twice as big as needed.”
So, as a patent attorney dedicated to proactively serving your clients’ best interest, how can you communicate the value of investing in a new flashy legal tech tool – particularly when your firm may be struggling? CFOs are paid to identify risks and downside, to worry about what things cost. But with the right amount of finesse and financial insight, patent attorneys can communicate the practicality of these tools and earn buy-in from their executive team.
When requesting new legal tech, here are five considerations that will lead to a productive conversation with your firm’s CFO.
Look beyond your own team.
The quickest way to alienate firm executives is to talk about how your team (and only your team) can benefit from a new tool. Especially at a law firm, where departments are siloed based on the type of law, highlighting individual use cases rather than overall organizational impact is not what the protector of the budget wants to hear. They’re all about the money, so it’s essential that you...
Talk in dollars and cents.
The most effective argument you can make in support of a new tool is a mathematical one. It’s time to get creative, and discussing the ROI of the tool with a salesperson is a good place to start.
For example, let’s consider a workflow automation tool like Juristat IDS. The value to a patent attorney or a paralegal is saved time since the tool automates the entire IDS generation process. While a CFO can appreciate that, she’s looking for evidence that the product purchase will lead to a higher value profit for the firm.
Here’s where you can do some math. Questions to consider:
- How many hours does it take to manually input necessary references for IDSs (without the new tool)?
- What is the hourly cost of the work your paralegals put into an IDS?
- How many IDSs do your team complete in a month?
- What is the monthly cost of the new product versus the monthly cost of your manual process?
- What is the cost of automating a part of the process versus automating away that entire part of your practice?
With these calculations, along with a thorough report detailing how the extra time can benefit other projects, you are well on your way to convincing your CFO that your desired tool is very much worth the purchase.
Understand your organization’s budget.
It’s important to understand the budgeting process of your firm. Every organization has to approve an annual budget, and this approval process is the best time to suggest new spending that can benefit the company. There may be money allocated for special projects, or available money from contracts coming to an end. Anticipate questions and concerns by doing some research ahead of time to build your case.
If you are requesting new funding, you need to know where to find that money. Is there a reserve of cash from past cost savings initiatives spearheaded by your team? Can money be reallocated from a canceled project? By understanding the organizational cash flow, providing realistic options for how to pay for your initiative, and knowing how the approval process works, you are making it much easier for the CFO to approve.
While you may focus on an idea’s potential, the CFO is looking for its failures—anything new and unproven is likely to be shot down. However, if you can highlight real results from other organizations and demonstrate that the rewards are worth the risk, you’ll have a better shot at getting the green light.
Beyond written case studies, dig in and get references. Better yet, try to organize a meeting between the sales representative and your CFO to discuss the nuances of the contract and pricing information. Maybe reach out to the CFO of a similar organization and ask them to share their experience with your executives.
Provide an action plan that ensures follow-up and buy-in.
CFOs want to know how the financial impact of the purchase will be measured over time and what actions your team will take if those benchmarks aren't met. They also want to ensure that the whole team is using the tool - and we all know how hard implementing new tech can be!
While metrics are key to show the potential value of a tool, verifiable department support for the purchase ensures that the tool will be used and used often. Survey your team to see what they think. The survey will (hopefully) show that there is a department-wide issue, that your colleagues want this issue to be fixed, and that the tool under consideration can provide a solution.
Negotiate with the sales representative to “try before you buy.” Of course, before discussing the tool with your CFO, you will want to explore the tool and study up on all features. With a trial period, you can prove the metrics you shared with your CFO. Does the tool allow you to put out the same number of IDSs but at a more affordable rate than the current labor involved? If so, this is proof that the tool has long-term cost-savings value, and the CFO is likely to agree.
The best CFOs have one thought on their mind: “How can I ensure the financial well-being of my organization?” Their goal is to ensure efficiency, cut excessive spending, and provide all departments with everything they need to do their job without taking away from profit.
Your challenge as a patent attorney is to show how your desired new tool will be indispensable to your future practice. By channeling your excitement into a financially-minded report, filled with structured thinking, benchmarks, and (most importantly) persuasive metrics, you can convince your CFO that legal innovation does not equal a loss in profit.
Is your CFO curious to see how Juristat can save your firm valued time and money? Schedule a demo today to learn more.