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How Legal Functions Can Escape The More With Less Trap

13 February 2020

Adrian Warren

Commercial Director

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In house legal team challenges

Doing “more with less” has been the mantra for in-house Legal teams for years. How can we cut spend while taking on more work? How can we reduce headcount while still achieving our KPIs?

In a recent survey by EY, 82% of businesses said they plan to reduce Legal function costs over the next 24 months. At the same time, nearly 9 in 10 reported that their Legal function had undergone a large or moderate increase in workload over the past five years.

Facing the dual challenge of a greater workload and squeezed budgets, Legal is stuck between a rock and a hard place. It’s only a matter of time before the function cracks under the pressure.

But there is another way.

Progressive General Counsels are lifting their gaze from their own department and out to the broader business. And they are getting results.

By delivering surplus value for their organisation, they are given more resources for new initiatives.

In other words, they are doing “more with more”.

So, how can you shift your mindset from “more with less” to get results?

When less is not more

Because of this blinkered thinking, whenever we see a Legal team try to justify an initiative –changing service providers, engaging a secondee, or implementing technology – they try to justify their project in 2D:

  1. How will this project reduce our reliance on external firms?
  2. How will this project reduce the number of in-house lawyers we need?

This might work if there is enough fat to trim and if the Legal team genuinely needs to become more agile.

But there’s a limit to how much you can trim. Inevitably, your CFO asks for the same reduction again next year. What then?

It's a zero-sum game that traps many Legal functions.

But there is a solution.

How to escape the “more with less” trap

Start talking in 3D. In other words, add a new dimension to your CFO’s thinking that goes beyond your own department and your own spend and towards generating measurable value.

What does this mean in practice?

Let’s say you’re building a business case for a new tech initiative. Rather than focusing on what the initiative will mean for your legal team, focus on incorporating a new set of deliverables that shows the impact on the wider business, such as:

  • Revenue realisation
  • Drag reduction
  • Risk management
  • Unlocking data visibility
  • Building competitive advantage

It’s all about recognising how legal processes are organisational processes and impact the wider business. Then, talking in the language of the business to show your value.

As a result, you will receive increased budgets, larger teams and investment in technology.

How this works in action

Let’s look at a real-life example.

A real estate legal team approached us at Plexus seeking to improve their property leasing process through automation and process improvement.

Here’s how they justified their project to us:

  • We can reduce headcount in the property team by an administrator, making a total saving of $80,000 per annum.
  • We can reduce the reliance on external firm, saving $100,000 per annum.

These are good outcomes, but not particularly impactful to a CFO who deals with billions in revenue and a headcount of thousands.

So, we looked at the third dimension – how this project would add value to the whole business.

Now, the Legal team could tell a better story:

  • Reducing the cycle time on leases from three months to one month means the company will realise two months more revenue on every single lease.
  • Streamlining this process reduces business drag, freeing up executives involved in complex approval processes and allowing the business to respond faster to market demands.
  • Poor processes currently mean the business misses red flags buried in spreadsheets and accepts variations to standard terms that shouldn't pass muster, all adding significant risk to the business.
  • Manual processes mean there is no visibility of data in the portfolio, and key decisions relating to property management cannot be accurately made.
  • Long, complex and opaque processes mean key sites are often lost to competitors.

Adding up these new impacts, suddenly the ROI on the project was millions of dollars. It was no longer just saving the business money; it was creating substantial new value.

Because the project more than paid for itself in other ways, budget was freed up for use elsewhere in the Legal function.

The Legal team had succeeded in doing more with more.

Over to you

It’s time to turn the “more with less” mindset on its head. To drive a successful Legal function you need to embrace a new dimension, demonstrate how legal contributes to wider business goals, and focus on doing more with more.

How can you think in 3D for your next project?

The world's top GCs work with Plexus

As the global economy moves faster and becomes increasingly volatile, organisations must radically evolve their operating models to more dynamically identify and respond to opportunities and threats. Plexus helps leading GCs shift their organisational design, evolve their talent competencies and digitise their functions to deliver faster, most cost-effective and more agile legal support.

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