More than 70% of executives’ report that the pace of change has increased. Several causes are responsible for this acceleration: changing consumer demand, global competitive pressures, new social and digital business models, widespread market volatility, and ever more active regulators.
In this era of persistent volatility leaders must identify the most persistent trends to inform their strategies and build operating models that flex to not only withstand, but profit from, shocks. As one ASX20 GC said to us ‘my job is to manage chaos’.
After over 200 conversations with General Counsels of Australia’s largest enterprises here are the four trends we believe will dominate 2016:
1. Automation and AI
You could have a party in a jam jar and still have room for the DJ with the 3% of lawyers who don’t recognise that advanced technologies such as Promotion Wizard are about to change the game for legal functions. Yet technology is an area of massive under investment by General Counsels. A recent survey by Legal Business UK suggested that only 11% of legal functions spend as much as 5% of their budget on technology. Fortunately, 82% forecast they will spend more next year.
As one early adopter of Promotion Wizard said:
‘The legal and marketing teams are thrilled with the Promotions Wizard. It has reduced the time spent per promotion as well as cut cost so we are truly getting more done for less. We are also pleased to be part of a real innovation. I smile when people talk about legal work being done by robots as if its science fiction. It’s happening now, we are part of it and we could not be happier.
Regional Counsel PPG
As lawyers demand greater career mobility and lifestyle flexibility new organisational structures and modes of working will become the norm, benefiting employees and corporates alike.
2. The Dynamic Legal Function
Businesses are looking to legal to be more dynamic, responsive, lower cost and to be a generator of competitive advantage. This has nothing to do with ‘getting back to clients in a timely manner’ or ‘doing more legal work’, and everything to do with fundamentally transforming the operating model. Here are three (amongst a number of) implications for legal:
- Historically, lawyers were engaged by the business to negotiate contracts to provide certainty. Increasingly they will be directed to negotiate contracts for flexibility.
- Legal functions who once prided themselves on stability and tenure will move to a ‘just in time talent’ model - long leveraged by functions such as IT. Using a smaller core team for BAU work, and a flexible team of largely secondment lawyers for everything else.
- As lawyers demand greater career mobility and lifestyle flexibility new organisational structures and modes of working will become the norm, benefiting employees and corporates alike.
3. The tightening talent market
For almost as long as anyone can remember in-house teams have had their pick of legal talent. As law firms downsized over the last eight years General Counsel’s found it easy to attract and retain legal law firm refugees to bolster their ranks. As that trend reverses itself law firms are using their deeper pockets to once again compete for the best talent. Commentators from the recruitment industry are saying this is the tightest talent market in 15 years. Here are three of the implications for Legal:
- General Counsels will need to devote more resources to attracting, engaging and retaining top talent. As our recent Thought Leaders research has shown, while 92% of GCs agree talent development is a key priority, only 14% of them know exactly what to do about it.
- Given the enormous shortage of ‘mid level’ lawyers, legal functions will have to look to alternatives such as more mature lawyers, secondees, changes in workload distribution and technology to get the work done.
- Many GCs will see this as an opportunity to rethink their legal strategy and organisation design to refocus on their ‘Legal Core’.
4. Supporting and embracing innovation
As CEOs and boards adopt strategies centred on the ultimate buzz word “innovation”, General Counsels have begun pondering what this means for the legal function – in fact, in our recent GC survey ‘Innovation’ is rated as the top priority on GC’s agenda for 2016.
This objective naturally splits in two. Firstly, What is legal’s role in supporting the business to innovate? Secondly, but equally importantly, How can the legal function adopt innovation to deliver legal work faster, better, and cheaper? Unfortunately, our survey of the current capability vs future importance of 24 different legal capabilities found that the biggest gap was ‘Technology Innovation’. In fact, only 24% of Legal Counsels agree that their GC’s push them to think differently about their role and how they do their work. There are some huge implications for legal:
- Successful innovation requires a high tolerance for risk and failure. Legal Counsels who are unable or unwilling to adopt a more sophisticated approach to risk management will be seen as a drag on innovation, and lose their 'seat at the table'.
- Legal functions will need to rapidly expand their tech-literacy and devote more resources to navigating the often under developed regulatory environment for emerging technology.
- General Counsel must dramatically increase their adoption of automation technology within their functions to free up resources to support their expanding mandate.
At this time of year, it is customary to wish someone a prosperous New Year. Identifying these trends and understanding how they affect your function will go a long way toward realising this prosperity. For those who embrace the change and opportunities that are inherent in them are likely to see their functions and careers prosper in the years to come.
Merry Christmas from the team at Plexus!