6 Shifts to Build a More Flexible, Resilient Legal Department

March 01, 2021

Contributor: Rob van der Meulen

General counsel (GC) must evolve their legal departments to deliver cogent, timely guidance to the business through this period of persistent disruption. Here are six ways they can drive change.

Organizational resilience is the watchword of today’s disrupted environment, and general counsel (GC) have a critical role to play as their organization’s disruption risk guide — working quickly with the business to (re)define the limits of legally, ethically and reputationally appropriate actions for business partners as they pursue new business models and opportunities to drive growth. 

But for the legal department to be as responsive as the business needs it to be, GC have to evolve how their legal departments operate by leading the design and (re)development of:

  • Workflow processes
  • Information access
  • Knowledge systems, hiring and training
  • Communication mechanisms and technology infrastructure  
  • Outside counsel relationships

“The role of GC and their legal teams naturally expands in times of disruption,” says Abbott Martin, Vice President, Gartner. When the law and stakeholder expectations are unstable and sometimes at odds, legal departments must provide operational clarity and build the corporate resilience to move forward.”

Read more: How to Be a More Effective General Counsel

Gartner expects that over the next five years, businesses will face an era of persistent disruption, leading to increased exposure to regulatory and reputational risks. Any stable “new normal” remains beyond the horizon. For legal to offer relevant counsel as conditions shift, six shifts will be critical in the next few years. 

Shift No. 1: Assess issues rapidly

After the 2008 financial crisis, the role of the legal department was to provide cost-efficient legal advice to the business. Now that navigating a diverse array of disruptions has become a norm in decision making, the legal department’s role must shift to guiding business partners through disruption — empowering them to take appropriate risks and pivot in response to changing conditions.

Legal departments that don't get distracted by unplanned work are more likely to deliver timely, relevant advice to the business.

This new focus requires the legal department to develop appropriate guidance and efficient governance at greater speed so that business partners can quickly make good risk-adjusted decisions and pivot with changing conditions.

Start by diagnosing where and how emerging legal and reputational considerations create drag or inconsistencies on the business, and target changes at the underlying processes and culture that contribute to this friction.

Shift No. 2: Prioritize legal’s service portfolio by the impact of decisions

Many legal departments prioritize their workloads to respond to urgent requests from business partners. But business partner requests don’t always reflect company priority and can divert the legal department from areas that have the greatest impact on business goals. Further, the legal department’s guidance doesn’t always materially inflect the course the business takes.

Make sure to incorporate discussion of key upcoming corporate decisions into existing leadership meetings and assign appropriate service levels for each business function according to the impact a decision has on overall business objectives. Also assign responsibility for identifying which upcoming decisions pose novel legal questions. Codify the guidance and integrate it into business partner workflows where possible. 

Shift No. 3: Balance the scale and responsiveness of the service delivery model

In the past, the legal department has sought to provide responsive service and highly customized guidance. In the era of persistent disruption, where decision making is more dispersed throughout the organization, it’s inefficient to offer tailored guidance in every scenario. True enterprise-level responsiveness will be achieved by scaling guidance. 

Aim to reduce touchpoints between your legal department and the organization, reserving direct support for “bet the company” issues while indirectly supporting “run the company” workloads. Map the business processes that make use of high-volume legal workflows and identify ways to standardize and build in legal guidance where required. 

Shift No. 4: Create a task-based provider network

Many legal departments today use law firms for much of their outsourced work because they tend to offer the best and most available expertise for each issue. But this is certainly not a cost-effective solution.

GC should use multiple providers to offer 360-degree support around specific issues. Law firms will still be a part of this mix in most cases, but alternative legal service providers, project management support and other nonlegal providers should also be included.

Create clear sourcing guidelines that enable lawyers to easily decompose a matter into tasks and match a task to the most suitable supplier to incentivize lawyers to choose the most cost-effective options.

Shift No. 5: Experiment to deliver business outcomes

Legal departments often struggle to exploit technology and tend to follow the hype rather than focus on their own underlying needs. GC need to help their legal departments to become more deliberate and adaptable in their technology strategies.

Assess legal department processes to identify the operational processes that can be best addressed by technology and linked to critical business outcomes. Also engage with stakeholders to solicit input on future needs, pressure-test hypotheses and co-create potential solution designs.

The goal is to acquire technology that solves an operational problem, not to install technology that looks flashy or is intellectually interesting but ultimately detached from workflows.

Shift No. 6: Foster dynamic skill building

Legal departments have traditionally increased skills by hiring talent to support predictable, future needs (e.g., data privacy expertise). However, with limited budgets and an increase in unpredictable demands, this approach is unsustainable. 

To effectively guide the business through disruption and changing demands, legal departments will need to dynamically identify skills gaps and adjust their skills mix. To achieve this, they must hire for the fundamental process engineering skills that enable adaptability, while adapting their work and training approach to rapidly transfer necessary, but rapidly changing, sets of legal expertise. 

Partner with HR to create a shared skills inventory across the organization, describing available talent with skills to support the legal department. Also develop processes to decide when to build, buy or borrow the necessary skills — and determine how to identify the best-fit sources of skills within the organization, the provider marketplace or in nontraditional hiring pipelines (e.g., alternative legal service providers, legal tech vendors, new law firms).

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