The Big Picture
Change in business is inevitable and the in-house legal department is no exception. GCs, the teams they lead, the way they are viewed and the work that they do are all changing. The role of the GC is increasingly morphing towards one of leadership and strategy, as the focus moves away from questions of black-letter law, into ones of resource optimisation, budget management and board-level strategy.
As the role transforms, so too do its requirements. GCs can no longer offer narrow and rigid legal advice and expect to be shielded from the realities of business for which their advice was sought in the first place. The new normal demands an ability to demonstrate true value – which can oftentimes involve doing more with less. These changes are not happening in isolation, but are a clear response to how businesses are evolving to keep pace with wider society.
More For Less and Demonstrating Value
There are pressures now affecting every link in the supply chain. One of the effects of an increasingly globalised workplace over the last twenty years has been that opportunities for growth have increased, but so have opportunities for competition. In many industries, physical location is becoming less and less important; this leads to competition from lower-cost providers in a myriad of locations.
Legal services are in no way immune to these pressures. All of the GCs in attendance at this year’s Enterprice GC conference were experimenting with various aspects of disaggregation of services. Much of this was driven by an appreciation of the fact that lawyers can no longer afford to think of their services, whether internal or external, as somehow ‘special’ and immune to the market forces that affect all other aspects of their businesses.
For many of those involved in the discussion, this got to the heart of an area where GCs and senior in-house lawyers are focusing their skills: risk analysis applied more broadly than in a purely legal context. This means understanding that the interconnection of operational, reputational, financial and legal risk. It also means understanding the boundaries in all of those areas are where legal teams can demonstrate their value and also collaborate with colleagues; avoiding the silos and ‘ivory tower’ accusations levelled at legal teams in the past.
There is a feeling among GCs that technology (and the legal technologists and legal operations experts who apply it) will change the face of how both legal departments and law firms operate. But the general consensus in the discussion was that technology is not the answer in and of itself. Rather, it’s the careful application of technology in shoring up departmental inefficiencies, freeing up internal lawyers to focus on more strategic and higher-value application of their skills, that will separate the top-tier GCs from the crowd.
This is not to say that technology’s best applications lie in the menial and mundane aspects of business. While it can free up experienced lawyers to focus on strategy, it can also aid in big-picture, strategic decision-making on its own. The ‘smart’ collection and analysis of data will allow for an increase in the amount of data made available to decision-makers, while decreasing the time it takes for that data to be collected and parsed.
Rapidly-changing technology brings even more reform to the profile of the future GC. The aforementioned pressures to deliver value for money to the organisation will mean that the successful GC needs to be able to spot opportunity when it comes. And technology forever reaching new heights is an opportunity for in-house teams to deliver higher levels of efficiency. An aversion to or inability to capitalise on whatever technological innovation comes around the corner will be an opportunity missed that the future GC will recognise and embrace.
It was felt that the ramifications of this would be seen in the coming years in outside law firms, as the expectations of what teams should be able to achieve given the capacity for cost and time savings offered by technology evolve. In light of this, the attention and praise can only continue to shift away from those who were merely the highest billing lawyers and towards those who are best able to transmute these new efficiencies to their in-house client partners, who have long since started to feel this pressure. (On a side note there was universal disdain from the general counsel for PEP surveys.)
An idea that came up in regards to future talent, both internal and external, was the notion of co-creation. The traditional separation between the internal lawyer as the client and the external lawyer as the expert is being impeached. In a world where concern for business values and ethics is at an all-time high, and where competition among external legal service providers is similarly high, the move makes sense.
Just as management of external personnel is set to change, so too is the management of the internal workforce. For the delegates at the discussion, there was a consensus of interest in and generally positive experience with alternative staffing solutions. While some of these are not low cost, many felt the value and flexibility they give was a key tool for the modern general counsel and may be the difference between a team that brings true efficiency to their organisations and one that does not. At a time when the virtues of AI and automation are being sold on every corner, it may be that the creative use of people becomes just as important an innovation going forward.
In summary, it’s a time of change, which is not always welcome as budgets are cut and headcounts brought under scrutiny. But for many GCs, it’s an extension of wider pressures that their businesses are facing and have been grappling with for some time. Therefore, the emergence of these same pressures in the legal profession was seen by many as having been a long-time coming. Foreseen or not, the future is all but here, and the test now is to see which general counsel and in-house legal teams have put themselves in the best position to thrive in the new ‘normal’.