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The Expanding Legal Department and its Impact on General Counsel

    

The value of the legal department stretches well beyond just mitigating risk. General counsel (GC) is a part of strategic business decisions including finance, marketing, human resources, sales, and risk management – to name a few departments. Having a full legal department with effective tools in place instead of a one-person show with limited resources can enable general counsel to work strategically with those other departments in a new way. With more time, general counsel can focus less on tedious legal tasks and become an integral contributor to corporate planning. When general counsel is free to focus on strategic, high-level business goals instead of being bogged down with administrative or contract-based processes, a natural efficiency will occur. 

But the reality for many companies is that GCs are not provided a budget to expand the team. General counsel – especially in smaller organizations – must demonstrate the value of expansion without actually expanding. Once they can prove expansion’s value, then they have a better chance of getting money to expand the team with people.

While GCs are in need of a way to improve operations without hiring, they should look to technology. Software solutions such as contract lifecycle management (CLM) can help GCs demonstrate that additional services and support can improve their department as a whole. As an alternative to hiring a full department, GCs can improve operations using technology first. All of the benefits that come with introducing technology (reducing labor, saving on costs, improving security, etc.) will become realities for legal departments that need to stay small while improving operations. Once the business sees how the legal department becomes more efficient, productive, secure, and operationally effective, it will be clear that more and different support is needed to improve the legal department’s function in the business. 

Of course, implementing new legal operations initiatives doesn’t come without challenges. General counsel in particular faces obstacles when it comes to proposing expansion and actually introducing it. Aside from the budget challenge when approaching executive leadership about expanding the legal team, general counsel must demonstrate value for new roles that ultimately free up his or her time. To expand the legal team is to change company norms, and general counsel is tasked with not only convincing leadership that such change is good, but the rest of the company as well. An expanding department means new processes and workflows which can always come with hiccups. 

What Can General Counsel Do?

To overcome some of these obstacles and expand legal operations, general counsel can: 

Show that bringing legal services in house will save the business money. A new analysis by the Corporate Executive Board (CEB) surveyed 180 in-house departments around the world and examined corporate practices with highest and lowest expenses. The analysis found that – unless a company is in the middle of serious litigation – it’s recommended that a corporation spend 40 percent on outsourced legal ops and 60 percent in-house.

Demonstrate that the team will be evaluated. Create professional development plans for each new member of the team to define performance roadmaps, metrics, and goals for new staff. Being able to show real results will open leadership to further expansion and will contribute to satisfied employees who deliver well. 

Use the legal operations position to better integrate the legal department. Research from Deloitte notes that the legal operations role is evolving to become the connective tissue between legal and other business departments. General counsel can use such a position to maintain a more integral part in overall business strategy. 

Look to hire people with a blend of skill sets. The same Deloitte report points out that individuals who possess legal skill sets who also have business acumen and credentials – including MBA or management consulting – are uniquely positioned to serve in legal operations roles. Additionally, hiring people who have a level of tech-savviness will greatly benefit general counsel down the line. As businesses increasingly bring on software as a service (SaaS) technologies and other digital infrastructure, having a legal staff that possesses decent tech skills will lend the department to onboarding technology with ease.

How Will General Counsel Feel the Effects?

The ever-evolving role of legal operations will have tangible effects on general counsel. Connie Brenton, chief of staff and director of legal operations at NetApp, offers some real-life experience in a Thomson Reuters exploration of the rise of the legal department manager. Brenton says that anyone introducing change in the legal realm of a business should approach this shift with the mindset that others will be resistant, and to toughen up. She said it will work “for those who can drive constant change while enduring others’ resistance to it. Adaptability and a tolerance for risk are also essential to creating efficiency and effectiveness in such a complex environment.”

A report from KPMG International underscores the trend in how legal departments are bringing more work in house and how that has an effect on general counsel. KPMG interviewed GCs and found that they have identified several key skills that will be required from bigger in-house teams: "As the role of senior GC moves increasingly towards strategic advice, collaboration, and decision-making, so will the roles of those in the wider in-house legal team in order to support this change."

GCs identified that their own roles are shifting in the wake of expanding legal operations, and one of the effects is integrating the in-house legal team with the rest of the business to understand various issues faced by other departments. 

Overall, it’s clear that legal department expansion not only offers general counsel the ability to become a more strategic member of the business, but it intertwines legal into the rest of the business as a whole. To optimize your legal department for this change, bring the right people and the right technology into your business. Consider the recommendations above for approaching leadership and beginning the hiring process, but also explore technologies such as contract lifecycle management software to offload repetitive tasks and leverage automation. Your future legal operations team will be the most efficient it can be.

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