For years, industry leaders have speculated about the ‘great legal transformation takeover’ coming for in-house Legal teams. But what does ‘legal transformation’ really mean?
In this article, we deep dive into legal transformation, including the types of programs Legal functions are adopting, and best practices for developing an effective legal transformation strategy for your business.
What is legal transformation?
Legal transformation is the term used to describe the re-imagining of the structure, working style, and value that in-house Legal teams provide to the business.
Over the past decade in-house Legal teams have grown to feature more prominently within corporate organisations. Initially they were staffed by new-to-in-house corporate lawyers whose view of ‘legal value’ came from their traditional Law Firm training ground.
While this view made sense within a system where value was measured by billable hours and over-servicing, it did not match up to the expectations of the organisations these teams found themselves within. In short, the traditional view of legal support was causing Legal to be seen by the business as a bottleneck and blocker to execution.
As a growing proportion of lawyers step away from this traditional Law Firm model, Legal teams are looking to their peers in other business departments to leverage the tools and tactics they use to work smarter and more effectively.
How are Legal functions transforming?
For Legal departments, ensuring they are establishing strategies to keep up with best practices is key to ensuring the business is well placed to effectively manage risk.
With both technological innovations and rapidly-evolving thinking around dynamic resourcing and agile legal teams, General Counsel are prioritising legal transformation at greater rates than ever before.
Here are two ways GCs are transforming their Legal departments:
Digital is a term that has become synonymous with transformation. For in-house Legal, digital transformation is the utilisation of technology, often via software-as-a-service, to streamline and simplify the more arduous, admin-type activities Legal finds themselves stuck doing.
A huge benefit of this is that lawyers spend less time doing churn work and more time acting as a strategic asset to the business.
Three common legal digital transformation initiatives include the introduction of automation, matter management, and contract management tools. By adopting legal technology, GCs also unlock access to previously opaque data which can be used to validate and establish benchmarks for legal impact within the business.
Learn more in our General Counsel’s Guide to Digital Transformation.
Agile legal resourcing
Alongside adopting legal technology, in-house Legal teams are reviewing their talent structure. Many Legal teams understand that due to the nature of their workload, the business’ need for specific Legal talent ebbs and flows. As a result, General Counsel are taking a leaf from the book of their peers in IT departments and shifting to an agile legal team structure.
These lawyers are leveraging legal secondees to manage the increases in demand for legal support. Filling these capacity gaps without increasing headcount is a dream come true for both General Counsel and Finance departments alike as it helps Legal to manage their costs while keeping Legal support in-house.
How to establish a legal transformation strategy
Legal transformation is a spectrum, and every in-house Legal team will find themselves somewhere along the line. Even if your Legal team doesn’t feel quite ready for technology, there are plenty of ways you can begin to optimise your processes and shift the needle from bottleneck to strategic business asset.
A growing number of GCs now have at least some sort of transformation strategy documented for their function. However, with so many opportunities and options on the table for Legal departments nowadays, it’s always good to check that you’re covering all bases.
Comparing your transformation plan with current best-in-practice legal transformation means you won’t get stuck down the wrong rabbit hole, with unnecessary technical debt, or footing the bill for unnecessary integrations down the track.
Here are five features we’ve found to be non-negotiable for any best practice legal transformation strategy.
Five features of an effective legal transformation strategy:
1. Your legal transformation strategy must be aligned to the business’s overall objectives
The first rule of legal transformation: it’s not just about Legal.
Being connected to the business doesn’t just mean that the business can reach the Legal team when they need you (although that’s important too). It means ensuring Legal’s strategy and execution is inherently supportive of the overall business objectives.
At the end of the day, all departments are working towards the same goal – a successful and growing business. Legal shouldn’t be an exception.
We find that unless the overarching business objectives are clearly outlined at the top of the strategy, it’s easy to drive an agenda that serves Legal only. The result? Legal remains a glorified rubber stamp and a handbrake on execution.
2. Your legal transformation strategy should clearly identify the business’s most-used contracts and quantify the cost and impact of the current approach
Take a look into how often each ‘type’ of contract is used in your business. Who usually requests it? Who is responsible for drafting? And how long does it usually take to get from draft stage to final signature?
Most businesses have a few main contracts which are adapted and used again and again. This is a massive time-sink for every business department involved, but particularly for Legal.
As the saying goes, ‘time is money’ and the longer a contract spends pending approval or signature the more costly it is for the business.
The most measurable success metric for any transformation is revenue generated. The faster agreements are approved and signed, the sooner your business can realise their value, so make sure you know where your biggest problems (and therefore opportunities for improvement) are.
Tip: Quantify the impact executing legal tasks faster would have on your business with our Legal Automation ROI Calculator.
3. You have clear adoption plans for any technology investments
With the world of legal technology evolving so rapidly, it can be a challenge to remain confident that you’ve got the best tools for the job.
Once you’ve got the tools you need, and are happy with the technical implementation, the next step is to run a successful adoption process.
Set a goal of what success looks like to you. Does this mean % of documents executed through your new contract management platform? Or a reduction in the time it takes to execute a document?
Tip: Reflect on the success metrics and KPIs you used earlier in your process when you were selecting your initiative. These should help you set your adoption success goals.
Learn how Powerco drove technology adoption while working remotely during lockdown.
4. Break the plan down into small chunks
Choosing the right transformation initiative is one thing, but planning out a successful implementation is another.
While you might want to wait until the plan is gold-plated before making your move, aiming for perfection is a big mistake.
To make it easier, break down your implementation plan into small chunks. This way you can start to see the impact (and start to see the cost savings) from your initiative earlier. You’ll also get started quicker which means you’ll table learnings and start improving quicker too.
In our experience, recruiting a team of ‘superusers’ is a great way to make quick progress by failing first, finding the kinks and learning how to fix them fast. Learn more in our eBook: The Legal Technology Adoption Doom Loop.
5. You know your current and target Legal Net Promoter Score
Net Promoter Score is not a metric you typically think of when it comes to Legal but it is becoming more and more important as legal integrates with the business.
Checking in with the business – your clients – on their satisfaction with Legal is critical in measuring and communicating your function’s success.
Knowing how you are performing prior to your transformation initiative and having a clear goal for the improvement you want to make is key to validating your initiative to the business. It also provides an excellent foundation for the business case for the next stage of your transformation plan.
Tip: Quantitative survey responses are great for calculating your NPS because it’s easier to compare performance from before and after your transformation initiative.
Why legal transformation fails
While total legal transformation is the desired goal of many in-house legal teams, there are many risks associated with rushing transformation before the function and business is ready for it. Andrew Mellett, CEO Plexus, outlines the top four factors that contribute to legal transformation failing and how GCs can avoid them..
Download our free legal transformation strategy checklist
Transforming your Legal function is key to ensuring your business is managing risk effectively.
Download this checklist to make sure you haven’t missed anything important.
Interested in learning more about legal transformation?
Learn about current trends, measuring and communicating legal value and how legal leaders are building influence within their organisations. You can also speak with one of our Legal Transformation Consultants: