Priority 3: Digitize processes
It is certain that technology will play a very important role in the ongoing transformation of businesses, but this may not be happening in legal departments to the extent required.
- 61% of the CEOs expected to make significant investments into data and technology.
- 59% of the General Counsel believed technology offers substantial potential for cost savings.
- Nonetheless, only 50% of the law departments had made greater use of technology in the past 12 months.
- One third of the legal departments felt they did not have the needed technology.
- 97% of the General Counsel said they faced challenges in securing budget for investments in legal technology.
To persuade the top management to invest in legal technology, the General Counsel needs a convincing investment case, supported by data, that legal technology can increase efficiency, enable sophisticated risk management, and more support the company’s strategy.
Priority 4: Enable the business to grow
Although most CEOs did not expect their businesses to expand this year, it is vital that every part of the organization (including legal and procurement departments) strengthens revenue generators.
- However, half of business leaders said inefficiency in the contracting process slowed revenue recognition and resulted in lost business.
- Only 52% of the law departments reported that their work was aligned with the broader business strategy.
There is significant room for the legal and contracting functions to deploy new ways to improve efficiency.
Priority 5: Deliver legal functions in a different way
Many companies benefited from the use of external lawyers, but the fees paid to them consumed a large part of the law departments’ budgets. Most General Counsel believed reducing the number of outside legal advisers could save some costs. Nevertheless, such strategy is unlikely to help legal departments’ other priorities relating to risk management, digitization and business growth.
Shifting work internally can reduce spending on external lawyers, and also offer more integration with the other business functions. This need was amplified by the increasing workloads in legal departments which outpaced budgets.
- General Counsel reported that one fifth of the in-house counsel hours was currently spent on low-complexity, repetitive or routine tasks.
- 76% of the law departments found it challenging to manage current workloads.
To optimize legal functions, General Counsel will need to turn to technology and process improvement. Yet, in-house lawyers spent too much time in selecting technology solutions and implement them cross-the-board.
What is next?
Apart from the traditional internal realignment of work and use of external counsel, the other common strategies of delivering legal functions are:
- outsourcing to alternative providers who provide process management and technology capabilities, while levering legal skills
- self-service which allows in-house lawyers to use standardized resources and automated processes to complete their work
- shared service centers which delivers services at lower costs than traditional law firms
Interviews with leaders from law, procurement, commercial contracting and other departments suggest change is already underway in most legal functions. Expanding these initiatives and maximizing their effectiveness will be the primary challenge for General Counsel in 2021 and beyond. Law departments’ success in this area will ultimately help them to align with the overall business strategy, transform risk management and enhance growth in their organizations.