8 Features of a Smart Legal Department
Mary Ormerod
17 Jun 2022
In-house legal functions face ever growing complexity in their work, alongside continuous pressure to cut legal costs. At the same time, teams are focusing more on becoming business enablers or even value drivers. To answer these challenges comes the rise of the smart legal department.
Read more about RSGI’s research and see examples of smart legal departments in the Financial Times Accelerating Business report.
But what makes a smart legal department? Here are eight key features
- Resourcing: legal work is separated into complex, similar and standardised tasks, with the latter outsourced either to a managed services centre or a third party. In-house lawyers focus on strategically important tasks, often while embedded in business units or dedicated centres of excellence, and a multidisciplinary legal operations team handles everyday business.
- Processes, including contracting: integration of legal and business processes makes it simple for business colleagues to call on the internal legal function, often via self-service. Processes are automated, and contracting — the most common legal process — is made smooth and fast thanks to smart, short and simple contracts and an integrated contract management system that links to core company activities such as sales.
- Data-centric: the legal department provides business and management insights to the senior executive team. For instance, by collecting, structuring and linking legal data to company data, the team can predict frauds or other risks in the business by using analytics or robotic process automation. Data informs relationships with external counsel via automated requests for proposals, e-billing and digital feedback. Contract clauses are turned into data.
- Metrics: the legal team is able to demonstrate its value as a revenue-generator using metrics that focus on commercial outcomes rather than legal inputs, with results that are regularly shared with the business. The metrics quantify value such as time to market, sustainable product or service design, and money saved by avoiding mishaps. Essentially, the metrics show revenue generated or costs avoided, thanks to the legal team’s contribution.
- Transparency: legal has both a clear view and control of internal workloads and external legal expenditure via techniques such as dashboards or efficient allocation of work to the most appropriate and available personnel, whether within or outside the legal function.
- Alignment: legal supports the aims of the business, with: integrated product and legal teams; legal and compliance tending to work as one team sharing data; and legal working closely with procurement and supply chain functions.
- Risk management: Risks are graded and explained via easy-to-understand frameworks to ensure that all the lawyers and contract professionals are empowered to work according to the company’s risk appetite, and with an awareness of potential reputational impacts.
- Talent: a smart legal team knows that transformation starts with people and encourages its lawyers to embrace new approaches by considering how reconfigured processes and new technologies could benefit the business as a whole. It also offers systematic coaching and mentoring.