Four ways legal departments are adapting to today’s fast evolving business climate


This article was originally published in Legaltech News.

A corporation is like the human body; it needs to keep the blood flowing. In an organizational context, that “blood” can take the form of money, ideas, projects, and information—to name a few. If one part of the organization is not functioning correctly, it gums up everything else. Thus, business velocity, or the ability to operate quickly and in sync with other units, should be a metric of success across the board.

For corporate legal departments (CLDs), keeping things flowing is akin to exercise. You need to keep moving if you’re to remain a vital contributor to the company at large. Sitting too long on a particular contract, for instance, delays revenue recognition, kills deals, and can thus affect market capitalization. Or, if legal cannot perform the due diligence portion of M&A quickly and thoroughly, the deal might not go through, or (worse) some critical areas may be missed. Additionally, the inability to address compliance and regulatory issues in a timely manner—including thorough responses to investigations—can lead to huge fines and even criminal penalties.

Just like some people exercise their body by focusing on a single set of muscles, some CLDs are hyper-focused on spend as a metric of success. And spend is, of course, important. But it shouldn’t be considered myopically, in a way that overlooks the bigger picture. Because CLDs touch such a wide range of work and work with a wide range of business units, inefficiency can handicap the entire organization. To improve business velocity, CLDs need to meet customers where they are regarding technology and risk tolerance. Let’s take a closer look at what that entails.

Integrate into the organization’s “body”

Often, CLDs are focused on efficiency but don’t consider whether the tools they use to improve it are convenient for the actual humans whose cooperation they need to realize that efficiency. Trying to get attorneys to go into your matter management system, for example, may not seem like a big deal. But if they are being asked to go into myriad different systems, they may scoff at having to be trained on yet another one.

Thus, it’s important to meet them where they are. A matter management system that can be used from within an enhanced version of Microsoft Outlook allows many users to do most matter management tasks straight from a tool just about everyone is familiar with, thereby avoiding any need for another tool. This reduces training burdens, increases adoption, and improves business velocity with a minimum of headache.

Embrace automation

CLDs should also be cognizant of using the right level of resources for each task. Nothing slows down business velocity more than using attorneys to do administrative work like legal intake or handling basic Q&A information.

Attorneys should not be doing administrative tasks ever. Rote tasks can be automated or performed by lower-level resources. For example, self-service portals, where people from other business units are directed to legal advice in the form of pre-created legal policies, memoranda, or training videos, “de-lawyer” the delivery of legal advice and improve business velocity. AI can also be used to automate metadata and clause extraction during contract review, which mitigates the risk of human error in due diligence and keeps things moving.

Don’t let perfection be the enemy of the good

The legal profession is deeply rooted in perfectionism. It’s taught in law school and reinforced when people join law firms and bill hourly. The structure offers little incentive to complete tasks in a timely matter. It is no surprise, then, that legal professionals habitually engage in “scorched earth” research and “fishing expedition” discovery in which no stone is left unturned. But when outside counsel acts this way, they are effectively substituting their own risk tolerance for that of the client. In many cases, the client doesn’t want perfection—they just want a “good enough” solution to the problem so they can move on.

To improve business velocity, it’s important to address this culture of perfection and remind attorneys that achieving client goals, not legal goals, is their raison d’etre. Benchmarking tools can help CLDs determine which players are substituting their own risk tolerance for that of the client. Benchmarking can also be useful for things like policing invoice hygiene to ensure invoices are submitted in line with billing guidelines.

The bottom line is that having a functional and efficient relationship between different business units is crucial for the success of the overall organization. Just like the human body can’t function properly if one or two major organs aren’t healthy, neither can an organization if its CLD and business units aren’t working together to achieve the same outcomes.



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