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If you want your in-house Legal function to succeed, stop treating it like a Law Firm

By Adrian Warren, Commercial Director

20 February 2020

We speak to Legal teams every day who are looking to elevate their functions and deliver greater value to their businesses. They know the impact that workflow and knowledge management systems could have on their team’s efficiency and ability to get Legal work done, but they are shocked when they need to fight to get their improvement initiatives off the ground.

This is because General Counsel and their Legal teams are thinking like they’re still in Private Practice.

When they think about improving their function, many in-house Lawyers still think about the technology systems they worked with when they were in a Law Firm. Technology systems like document management, matter management, time and invoice management, knowledge management and research libraries. The theory being that, if they had these tools again, they could build a Legal team to rival a Law Firm. And they could, but that’s the wrong goal.

In-house Legal teams and Law Firms are different

Law Firms invest in these tools because the primary output of their business is delivering Legal services. Their business model supports a framework where if a Lawyer is 5% more efficient on one project, it will directly equate to the firm taking 5% more revenue based on that Lawyer being able to begin their next project 5% sooner.

However, when GCs pitch the value of these systems of improvement to their CFO, they often get knocked back.

The simple fact of the matter is their CFO is not interested in how these systems can make the Legal function perform more like a Law Firm. They aren’t running a Law Firm. CFOs manage requests for funding from all areas of the business and Legal is only a small percentage of their business. At the end of the day, a 5% change in Legal function efficiency won’t dramatically transform the effectiveness of the business as a whole.

This is why so many Legal projects come with an equivalent reduction in Legal spend. The CFO says, “if you really want it, you’ll have to pay for it yourself.” But which Legal function has a budget they aren’t already completely utilising?

An in-house team is not a captive Law Firm – it is a function of a wider business, a business whose output is not legal services – and so GCs who want their Legal technology project to be greenlit need to clearly articulate the value of the project to the business.

Legal teams that are succeeding to drive change understand how to articulate the value of Legal transformation

From our experience, Legal leaders who are successful in implementing their transformation strategies know that every legal process is a step towards a broader business goal. These leaders ensure their teams understand that the role of Legal is to provide the Legal services and frameworks for the business to operate effectively. They are also able to communicate to their C-Suite that a Legal transformation strategy improving these processes doesn’t just save a bit of Lawyer time – it expedites a business outcome.

Once Legal teams view their processes from the perspective of the business, they are able to articulate the benefit of process improvement and technology investment directly on commercial outcomes.

By shifting the conversation from a 5% efficiency on a fraction of the business, to a 5% efficiency on the whole business operation, suddenly, they are speaking the CFO’s language.

We saw this recently with a client we’ve worked with closely for many years. The General Counsel was struggling to get financial buy-in for tech to transform their process for approval and delegations of authority. The existing process was manual and complex, involving hours out of the Lawyer’s day to chase signatures and signatories. It was the bane of their team’s existence, yet their CFO wouldn’t greenlight a change.

As soon as they lifted their perspectives beyond their team, everything changed. They mapped the bottlenecks resulting from their existing Legal process and found that not only was it eating up Legal’s time, but also tied up key executives - slowing the business down by weeks. The organisation’s inability to engage new suppliers promptly also introduced a massive risk through lost contracts.

Articulated in this light, suddenly the ROI on the project went from thousands of dollars to hundreds of thousands. Unsurprisingly, their CFO gave the green light immediately.

As a result, Legal freed up capacity within their team, and more importantly, delivered measurable value to the business. The project didn’t even have to come with an equivalent reduction in Legal spend – it paid for itself.

Conclusion

The future of inhouse Legal isn’t in replicating the ways of law firms. It is in fundamentally changing how in-house Legal thinks of their role within their organisation. We believe that Legal can and should be a strategic player in business operations. Thinking outside the box when it comes to adopting legal technology is the first step in making this a reality.

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