Why (and how) you should be running your legal department like a business


Mar 31, 2023

As companies are fighting to find their way through economic, social, political, and environmental disruptions, the regulatory landscape is also evolving at a neck-breaking pace. The combination has resulted in companies reviewing and reprioritising their limited resources. However, with challenges come opportunities. Businesses have been forced to optimise the efficiency of every department and this of course includes the legal department. 

There is no denying that legal touches on every aspect of the business: from the engagement of customers, suppliers, and staff, to dealing with company admin and compliance. Yet, legal is often seen as the bottleneck or “red tape” of the company instead of the facilitator of business and growth. The market now understands and is more aware that it is crucial for the legal department to be operated, assessed, and measured like every other department within the company. It is no longer enough for legal departments to only be “in-house lawyers” delivering legal expertise. GCs and heads of the legal departments should be aware that, as the demand for their services increases (with no or limited increase in resources), the legal team is also being assessed on their efficiency and effectiveness. However, Gartner has reported that “legal leaders lack confidence in critical capabilities” and that only 13% “feel confident that they can manage cross-functional risks without creating drag on the business”.

We have therefore handpicked the top 3 things to do today to get you started on your journey to becoming leaner and more efficient:

Hire a legal ops manager

This seems like a counter-intuitive suggestion given the number of companies going through redundancies, reorganisations, and hiring freezes at the moment. However, having an experienced legal operations manager is like having a COO for your legal department. He or she will be undistracted by the practice of law and focus on raising the profile of legal and its value in the business by being in charge of financial and operational decisions. At the very minimum, such personnel should:

- Define and drive initiatives to improve efficiency and workflows (including the implementation of technology to achieve these).

- Implement, measure, and analyse metrics that inform decision-making, turning them into actions that deliver improvements.

- Manage legal spend and department budget (both external and internal spend).

- Work closely with the other departments within the organisation to demonstrate and elevate the value of the legal team.

Invest in technology 

Technology has long been a strategy and tool used by all other departments within an organisation. Investments into sales and marketing tools have been the norm for decades and investments into legal tools are finally catching up. Based on Goldman Sach’s most recent report, 44% of legal work could be automated or replaced by generative AI. It is therefore crunch time for legal teams to now identify and prioritise where best-fit technology solutions that can improve legal processes, operational capabilities, and business outcomes. Solutions like Pocketlaw will enable teams to drive efficiency by standardising and automating repetitive or administrative tasks. In times where return on investments (ROI) dominate conversations, businesses would be wise to invest in technology to ensure both short term and long term goals are achieved to safeguard sustainable and resilient growth. 

Perform more work in-house

Being able to absorb more work internally will ensure less external legal spend. Instead of relying on outside counsel to execute low-risk, high-volume work, businesses should aim to absorb most of such work internally to reserve their external budget for high-risk and/or value-adding projects. Companies and legal departments should take a step back to identify opportunities to shift such work in-house. Given limited budgets and increasingly unpredictable needs, leaders need to think outside the box and maximise resources in order to get ahead of the competition. The legal team could, for example, work with HR to take advantage of additional support or delegated roles within the wider organisation.  

In short, legal teams should introduce metrics and KPIs which allow for measuring and benchmarking specific focus areas in order to enable innovation and improvement. Businesses have to move faster than ever to remain ahead of the competition, we at Pocketlaw understand that time = money! Find out how you can work smarter with Pocketlaw today.

Please note: Pocketlaw is not a substitute for an attorney or law firm. So, should you have any legal questions on the content of this page, please get in touch with a qualified legal professional.

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