In the current market all internal functions are under pressure to demonstrate value and manage costs.

In-house law departments are not immune to these challenges. Since the pandemic, many factors have created a ‘perfect storm’ facing corporate law departments. These include increasing business demands, reduced resources, and higher expectations around turnaround times. With the backdrop of nearly half of corporate law departments saying that they are bringing more operational work in-house, general counsel (GCs) need to look to embed new ways of working to stay the pace.

As businesses remain focused on revenue growth in a challenging and uncertain operating environment, the workloads of in-house law departments are growing – all while budgets continue to face increased scrutiny. According to research from Thomson Reuters, 58% of in-house departments experienced an increase in workload and 29% experienced a decrease in budget in 2021. GCs must therefore act fast to remain effective.

Current challenges create a case for change

While it may not appear so, the mixture of challenges facing corporate law departments could present a ‘golden moment’ to bring about change. History shows us that change is never easy. However, in better economic times there can be less impetus for change; when businesses are in growth mode, there is understandably less pressure than what many functions are facing right now. 

This brings about a concept known as the ‘burning platform’: the necessity of change despite the fear of the unknown consequences. However, proactive GCs looking to redesign their functions for the next economic cycle should act now. While there will always be opportunities to optimise staffing, GCs should look beyond headcount as the only lever to demonstrate value. After all, we know that cost is not a strategy.

Operational challenges are most suited to transformation

We know from experience that there is often a misalignment between what is important and what is urgent. For corporate law departments struggling to manage existing workload, we need to question whether time spent by the function's lawyers is being used most effectively. 

Legal operations, which can present as lower value and higher volume tasks than bet the company M&A and high value disputes, can often be troublesome to navigate. However, it does require a strategic focus on design to ensure that the department is appropriately configured to deliver value. It is precisely these operational challenges that are most ripe for improvement through optimising people, processes, and technology. 

Daily challenges facing corporate legal departments such as contract management, document management, knowledge management, legal intake and matter management can mean that in-house lawyers spend more of their time undertaking administrative processes than supporting the business in managing risk.

Transformation is for the benefit of the whole organisation

While there is a significant opportunity for GCs to improve how their teams operate, including improving the efficiency of repeatable processes and increasing the productivity of team members, this is a limited perspective. It doesn't stop there. 

Other functions that have transformed in recent decades include Finance, HR, IT and Marketing. What can Legal learn from the changes that these functions have embedded? At a general level, each of these functions have made changes that did not solely benefit the people that work within these teams but have created value for the business overall.

For example, proactive Finance departments now provide access to cost and performance data and key performance indicators (KPIs) to guide business decision making in real-time. HR departments have successfully digitised operational people processes through self-service provision, enabling HR business partners to focus on higher value tasks. Within Marketing we see broad changes that have been made across people, process, and technology pillars, including through customer relationship management (CRM) systems that provide a single view of the customer and improved targeting and ROI reporting on digital campaigns.

While advances in technology and user familiarity with new tools mean that employees and customers are now more willing to self-serve than would have been the case a decade ago, learning from experience is key. The smartest corporate law departments will be those that can learn from their peers in these other internal functions, while also creating an operational roadmap that equally benefits members of the corporate law department and other stakeholder groups across the organisation.

How should GCs get started?

A natural first step in any transformation programme is to understand the challenges being faced today – both by the corporate law department as a service provider and by end users within the business. An understanding of key ‘pain points’ that get in the way of effectively managing operational processes will invariably highlight opportunities for greater standardisation, ways to minimise errors and delays, techniques to provide greater transparency and tools to improve the centralisation of key documents.

From a process management perspective, we often consider the characteristics of processes with potential for improvement. These include those that are unnecessarily manual and time consuming, those that are administrative in nature and do not require legal expertise, those that are repetitive and/or high volume and those that are seen by the customer as low value or immaterial. 

When looked at through these lenses, every corporate law department will be able to identify quick wins as well as major initiatives that will transform ways of working for the better. These characteristics will typically touch on value, cost, time, resource, and quality metrics. Once these processes have been redesigned, GCs and the lawyers within their teams will have time back in their day to fully focus on what is important, and not just what is urgent.

Secondly, corporate law departments can increase use of technology, to improve the user experience for their people and for end customers. Before investing in specialist legal technology solutions, you should look for ways to increase adoption of solutions already in use across the organisation. Often this can be done in a cost neutral way.

Since the pandemic many organisations have invested in enterprise-wide solutions such as collaboration, document management, electronic signature, and online meeting tools. Many of these solutions have use-cases for Legal beyond how they are currently being used. When considering the pain points faced today, we should challenge ourselves to ask how technology already at our disposal can help alleviate these.

Finally, the context, strategy and goals set by the CEO and business leadership provide the opportunity for organisational alignment. This is a significant endeavour in future-proofing the function and requires a fundamental review of the status quo.

If you are a leader in an in-house law department with the benefit of a blank page, would you redesign your function as it is today? The challenges we face require bold decisions to modernise the corporate law department, but the benefits can be significant: happier employees, reduced burnout, increased customer satisfaction and improved management of risk for the organisation. Let's get started.

Anthony Widdop is global director, legal operations, at Shearman & Sterling