By Victoria Swedjemark.
It is tough to work in in-house law!
Most legal teams can testify to the challenges involved in doing legal and compliance work in organisations today. There is a need to navigate large-scale business transformation, help implement floods of new and complex regulation across the enterprise and develop business resilience to crises and unprecedented risks – parallel to doing all the other day-to-day work. Legal teams often seek to be strategic and proactive, but the reality is often that the legal team ends up being reactive, stretching efforts, and available headspace, too thin.
The new situation is not only about “growing workload”, but also involves having to navigate complexity and uncertainty, and embracing digital transformation in the wider sense. In this world, we need to run faster, be more adaptable to change and disruption and collaborate more across different functions to solve new types of problems or develop new types of solutions. This means legal teams need to adapt too. But how?
The traditional operating model for corporate legal is increasingly challenging
The legacy model for inhouse legal work was designed for another type of world. It has been built on the notion that corporations need a team of lawyers to advise and guide the business, like an internal law firm that the business involve as needs arise. Problem is, this model is increasingly unfitting for the new world we live in. Let’s unpack some of the challenges.
The future requires business speed and scalability. As workload grows and business complexity heats up, the legal team try to do more with available resources, but in the end often find they are unable to manage the total demand. The day-to-day work piles up alongside all tactical and strategic initiatives that the legal team is now also involved in. In many instances, Legal becomes a bottle neck for business, which causes growing frustration from business in a world where you need to run fast to stay competitive. It also leads to growing overwhelm in the legal team, which takes a toll on engagement levels and creates risks for people burnout.
The traditional way to scale up capacity in Legal has always been to simply hire more lawyers to the team or engage law firms to do more work, but this is not a viable solution to stay ahead of the curve. It is not effective enough. It takes time to find and onboard the right people, and it is also often too expensive as business seeks to improve cost efficiency. What is needed now are ways to scale the legal function more effectively than just through the people dimension.
The future legal team are not just advisors. The advisory approach that legal teams have traditionally resorted to is also increasingly limiting. It does not position the legal function very well for managing new risks and new regulatory complexities, as the risk management and compliance management that is needed today requires operationalization across the enterprise, working with processes and technology to embed it into business. The future is complex and requires more structural and holistic solutions – a set of policies and trainings will not cut it anymore. Legal teams must move from advisors to integrators. Business also increasingly calls for the legal team to take more shared ownership of business outcomes. A legal team that simply gives some legal advice and they shy away from the difficult business decisions don’t stand the test anymore.
The future is desiloed. The traditional siloed approach of Legal is also increasingly challenging Not only is it unfit for building more structural solutions like those just mentioned, it is also unaligned with new ways of working that are emerging, like agile methodologies to solve problems in cross-functional, task- or problem focused ways. Nor does the legal silo fit well with the growing convergence in areas like ESG or data protection. What are “legal matters” these days? It doesn’t matter how we label things, as long as we find effective solutions to the most pressing problems and create the most effective solutions for busines. The new world is collaborative and solutions are designed together, across silos. The inhouse law firm is no longer an effective service delivery model.
Customer and user expectations are evolving. As lawyers we have been trained to comprehensively analyse each matter, turn every stone and produce perfected legal products. Problem is the new world might not have patience for this and, most importantly, this might not produce the most relevant solutions. In a world that is ambiguous and that is constantly changing it can be more relevant to develop a minimum viable product that is tried out and evaluated, and redesigned as needed. Business also might prefer to collaborate with Legal in a more agile approach, with quick check-ins and continuous iterations, rather than sit and wait for weeks for legal to deliver the perfected end product after an extended production cycle with little transparency and interaction.
Digital transformation has fundamentally changed people’s expectations on convenience, access, personalization and so on. This spills over into new expectations on the legal function too, such as from internal stakeholders. They expect to be able to access relevant information in real time or get tech enabled self-serve solutions, designed for their needs, such as contract or document automation.
Again all of this puts strains on the traditional advisory, legal product focused approach legal teams have traditionally applied.
Still most legal teams keep operating under the old operating model
Many legal teams are too busy to even notice all this change around them, let alone analyse how it affects them. There is often not enough time to zoom out and reflect on how business, business needs and ways of working are changing and how they need to adapt. Many teams keep assuming it is great legal service that business expects, and that the traditional operating is still fit for purpose. They keep trying to keep up a good job, but struggling – often stretching too thin, ending up reactive rather than proactive, trying to do all things, rather than the right things, in the right way
It is difficult to navigate a new world with an
old map. Inhouse legal teams need to create a new map for a new world. Let’s unpack what is involved in designing such a new map.
Clarify the role and focus of Legal – set a strategy framework for the function
A good first step as a legal function is to get role and focus right. It requires zooming out and asking “why are we here?” and “what do we contribute with?”, “how do we bring most value?”. As many legal teams are born out of the advisory, ‘order-taking model’ they tend to assume that what business most appreciate is great service and excellent legal expertise and advice. But is it really?
The best way to find out is to gather insights on business needs and stakeholder preferences. What represents great performance and great solutions from the business perspective? What is the business strategy and key business objectives, and how do we contribute to those? Start there, in defining the relevant role and contribution of Legal. Turn the perspective around, focus on the business and your internal stakeholder needs. Legal teams that align with business are best positioned to find a role that is relevant and brings value to business. To be effective and impactful rather than just do a lot of things.
Based on these insights, the legal function can develop a more profound strategy for the function and clearer prioritisations, in the form of focus areas or impact areas and performance measures to illustrate value contribution. That strategy can then be communicated to others to help others understand when to involve legal and what to expect from Legal. Done right this creates a powerful narrative that helps Legal get the right role within the organization and showcase value to others.
Move to a more sophisticated resourcing model
Whereas in the past the resourcing model for legal and compliance work has been to toss in lawyers for ‘all work legal’, the resourcing model of the future is much more sophisticated. Instead of splitting up work elements in “legal work” (like limitation of liability clauses in contract) vs. “non-legal work” (like the commercial terms), a better question to ask is, “how is work best resourced to make best use of budget and other corporate resources and deliver on business objectives?”.
A lot of the work inhouse legal teams do is effectively routine, daily business. It is work that others in the organisation can do just as well. It is familiar (core business), recurring, often low risk, standardizable and so on. Legal can take an enabling rather than servicing role in this domain, equipping others to manage this work through relevant self-serve tools, such as tech enhanced FAQs (e.g. chatbots), easy access to legal information repositories, or contract or document automation. Moving out of the routine, day to day work enables lawyers to move into more strategic matters, more proactive initiatives and solving the most complex problems better.
Not only does this help use the legal resource more effectively (to bring more value), it also helps bring business agility when business can “run with things” and internal stakeholder appreciate the convenience and experience these new solutions can offer. Because people don’t necessarily want a lawyer, they want business outcomes. The relevant question to ask – how do we help bring those results in the best possible way?
A proper resourcing model also includes other elements, like technology and outsourcing. What work that lawyers have traditionally done can be automated and what can be outsourced to various types of external partners, including alternative providers like legal operations consultants, managed service providers or legal process outsourcing firms that can perhaps handle IP management, entity managment or entry-level contract support to business.
What helps here is to zoom out and take a closer look at different pieces of work and then segment them into buckets and match them to the best resourcing options. A good start is to better understand how the legal team currently spends its time, and then ask what is a better way to resource some work.
Keeping pace with technology – and taking a holistic view to digitalization in the legal domain
Because of the traditional, advisory, servicing approach of many legal functions, the focus of tech initiatives have often been on improving the efficiency of the legal team, so that they can serve the business better – do more work in less time, work faster and so on. There is much promise in identifying ways to free up time for the legal team through the use of technology, including automation and application of AI. The release of ChatGPT in November 2022 clearly illustrates the opportunities for using AI to carry out some time consuming taks.
But it is important that the digital strategy of the legal function does not solely focus on the legal team needs. As pointed out above, business cannot be siloed anymore and different parts of the organization must come together to solve problems and find great solutions for business. This is particularly true in the compliance and risk management space – only if it is embedded systematically across the enterprise can you manage the new complex regulatory requirements and navigate the new risk landscape. Technology can be a great aid to accomplish this, if approached collaboratively within the organization. Same applies to Contract Management Technology. Large parts of the organization manage contracts in one way or the other, why CLM initiatives are best approached cross-functionally.
Legal teams that are fundamentally integrated in business are best set up to succeed with this – developing and implementing a digital strategy that benefits the enterprise as a whole and helps deliver on key business objectives. Legal teams that identify with being an internal law firm often does not see the bigger picture.
Develop the team to be future-fit
All the things outlined above – on the need to desilo the team, integrate more, align to business, embrace new ways of working, acknowledge new internal stakeholder preferences, can be a pretty big mindset shift for the team. There is a need to create a sense of urgency around this, and to work actively with having the team challenge old assumptions on performance in legal and what constitute the best ways of working. In the process there may be a need to kill some darlings.
One of the biggest threats to accomplish the necessary team mindset shift is the busyness and lack of headspace for many legal teams today. When you are stressed out you are often not receptive to how things are changing and how you need to adapt.
That is why this type of team development requires some visionary leadership and some proper planning too. You need a team development plan, able to provide answers to questions like “where do we need to be as a team in the future, and what do we need to do to get there?”. Impactful culture development – along with the hands-on upskilling and reskilling that is often required – calls for a programmatic approach.
Many change programs fail because the team doesn’t fundamentally understand the why of change, don’t feel the sense of urgency or understand what is required from them and how to do what’s necessary. It can help to do a team maturity assessment, and also to hand the team hands-on insights about all the new business needs or business stakeholder preferences, or just give them an outlook about what progressive peer functions are doing out there. What is needed is persuasive data and some inspirational examples.
Some final words
It is never to late to design this new map for this new world. A good start can be simply understanding your starting point and then outlining where you need to go. Acknowledge it is a journey to develop this new map and successfully implement the change needed. There is some work involved for sure, but it is worth the while, to ensure the legal team is impactful and creates value rather than spread too thin, end up a bottle neck to business and exhaust the team – and ensuring the team maintains future relevance.
About the Author
Victoria Swedjemark works as a management consultant and is the founder of Glowmind, a boutique consulting firm. She helps legal and compliance teams transform into the future, by 1) clarifying overall function strategy – in terms of role, focus and contribution – 2) identifying opportunities to work smarter – using technology effectively and revisiting how work is resourced and carried out and 3) evolving the team – building the skillsets and mindsets needed for tomorrow and succeeding with change management. She does so by helping in-house legal leaders and their teams analyse relevant change needs, set change plans and succeed with implementation. Victoria is herself an ex in-house legal leader, having headed up the legal function in three different companies for 14 years. She is passionate about bringing more business thinking into Legal and helping legal teams understand how the world is changing and how the legal function needs to adapt, and can reposition to more value and impact. www.glowmind.com.
Photo credit: Åsa Hafmar (Jusek).
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