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How far we are from gauging relative ROI of software that is common among legal departments

Vendors tout the benefits of their software, including its return on investment, but none of them can offer objective, comparative and empirical support. A recent white paper on contract management software directs us to this point. The conclusion states that “contract automation and management can save time, cut costs and improve performance and efficiency better than almost any other initiative.” The claim of “better than” implies a quantifiable basis for the comparison.

Managers of law departments crave proof of such a claim, but their craving will go unsatisfied. Not only do we lack evidence for productivity gains from contract management across a range of companies in comparison to a control group, but also we can’t take the next step and match contract management to intranets, or matter management, or instant messaging, or scanning, or electronic billing, or predictive coding in e-discovery, or other software capabilities. Then to even contemplate how contract management stacks up against non-software “initiatives” – fixed-fee arrangements, offshoring, para-professionals, CLE, Centers of Excellence, and more – is at this time a remote dream.

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One response to “How far we are from gauging relative ROI of software that is common among legal departments”

  1. Jeff Hodge says:

    I don’t disagree that there is no comparative ROI analysis – at least that I’m aware of. But given the difficulties in gathering such data from a spectrum of samples, how can we begin to get at an answer? Do corollaries exist in other industries or sectors that you are aware of?