The process of developing your legal mode of operation is not something you should rush. A step back requires time and space on the part of the people involved. To provide the basis for your internal legal operating model, there are 3 levels that need to be considered. The pressure to transform legal business models is reaching new heights. EY`s legal services respond to today`s challenges and shape the future with tailored and agile strategies that span the entire legal department. From legal advice (where permitted) to operations and managed services, we provide the in-depth services the legal department needs to better facilitate business and create added value. With the recent acquisition of Thomson Reuters Pangea3 Legal Managed Services, EY continues to expand its capabilities to help corporate legal departments around the world find ways to transform their practices and deliver significant value to the business. But when these silos are eliminated (when legal functions are configured so that the general counsel leads the department globally and influences decisions on issues such as human resources, technology investments, and process improvement across the organization), efficiency follows. But while the «theory» and the framework are all well and good, the success of any strategy ultimately depends on the ability to work against the plan. Here, we find that similarities in models and frameworks end up being due to the fact that there is no one-size-fits-all approach. For many businesses today, the range of legal challenges is expanding, making a powerful legal department more important than ever. To be effective, it must offer more than on-demand concierge services and have a say in many strategic and tactical decisions, rather than being consulted after the fact, such as after signing a contract. In cases where a lot of time is spent on high-volume, low-risk legal work, such as trademark assignments or managing non-disclosure agreements, it may make sense to outsource these activities to free up the legal team`s time for higher priority work where their legal knowledge makes a greater strategic difference.
It is also possible that these activities are automated or performed by other legal service providers. When it comes to hiring, developing and retaining top talent, corporate legal departments must compete with law firms and the public sector, even though many law graduates do not consider in-house positions to be their first choice (Figure 5). Many rightly believe that promotions within a legal department can be rare. Increasingly, mid- and senior-level positions are now filled by lawyers in private practice. This mostly one-sided traffic from private practice to industry means that many qualified individuals can compete for an open position, making it increasingly difficult for in-house lawyers to climb the ladder. In addition to preparing to defend their business against lawsuits, legal advisors can take a forward-looking, preventative approach to legal risk. Some general counsel are now working much more closely with the entire organization, convening cross-functional teams to anticipate areas where regulation is likely and to participate in the public debate on these issues. Of course, they also need to prepare for regulatory compliance. Many EU members are now planning organisational changes, for example to comply with new corporate responsibility laws. 2 2. For example, the German Supply Chain Act. Some also strengthen business resilience by «translating» regulatory challenges into value creation opportunities, such as environmental, social and governance improvements to attract investors, customers, communities, employees and potential employees.
There is no doubt that the digitalization of current processes often yields positive results. For example, automating standard contract forms and adopting self-service legal solutions such as chatbots can provide platforms that legal teams can leverage to provide scalable legal advice. Using technology for day-to-day legal tasks can also give legal teams business insights and insight into the areas of the business that need the most attention. Please contact us if you would like to learn more about the legal operating model or if you would like to discuss your legal operating model with us. Aligning the legal department`s activities with the company`s strategic objectives is often an insightful exercise that can help the general counsel articulate the department`s value proposition and decide where new investments are warranted. The most important resource available to law firms and legal departments is people. The right mix of lawyers, paralegals, legal operations and support staff also improves efficiency and reduces costs. Instead of a traditional hierarchical structure of lawyers handling cases by seniority, many companies today rely on lighter structures, with fewer lawyers, more paralegals and technology experts, and also use alternative legal service providers. This allows lawyers to meet higher risk and value requirements, while maintaining a leaner and more flexible structure. [5] [6] With the advent of artificial intelligence (AI) in law, we are seeing an increased focus on lawyers` emotional intelligence (EI), which is the human side of the legal profession. Indeed, the pace of change and the shift from the centre of power to legal purchasers are contributing to the increased demand for improvements in the way lawyers deal with clients. And more EI leads to better lawyers who can act more effectively as trusted advisors to clients.
Enabling the legal department to embrace digital transformation, in its most basic form, means determining what skills need to be put in place, especially from the perspective of people, processes, technologies, and organizations. Supported by appropriate structure, responsibilities, governance and culture/values frameworks to give the strategy every chance of success. From a global perspective, the legal operating model may look something like Diagram 1: The challenge is figuring out what data sources your company`s systems can provide to provide a true picture of the legal department`s operations. How to meet these data needs must be considered when introducing a new technology solution. When it comes to obtaining legal services internally, externally and automatically, we recommend a strategic approach – again, based on tasks and risks. In times of limited financial resources to attract talent and differentiate themselves, legal business leaders create a more stimulating work environment for young professionals – for example, by building interdisciplinary teams of data scientists, forensic scientists, and external consultants. Many also offer more attractive working conditions, including flexible working hours and part-time models. The need to transform legal functions is clear.
That is the way forward. By examining the current state of the legal department and investing in the six dimensions that have proven critical to the success of target legal operating models, organizations can transform their internal teams into smaller, more agile business partners who create competitive advantage and value. Internal teams may also want external consultants to take care of high-quality work that is not part of the normal course of business, so they do not have the relevant expertise in their legal teams. For example, a company may engage outside legal counsel to respond to a hostile takeover bid. However, if the company pursues an aggressive growth strategy through acquisitions, it may make sense to build legal capacity for internal mergers and acquisitions. The Legal Function Consulting (LFC) team helps clients transform legal processes, talent models, data and technology strategies to create cost-effective and innovative operating models for sustainable legal functions and processes. Customers are supported from the analysis and design phase to full implementation. The LFC team helps clients effectively manage this change and improve the performance of their legal function through the strategic use of people, processes and technology.
Services include: Most legal teams spend a lot of time on voluminous, low-complexity tasks that, in many cases, can be automated without significant risk. Tasks such as customizing contract protocols, reviewing supplier agreements, filing and renewing trademarks, or preparing non-disclosure agreements can be automated with very low-risk technologies. After the financial crisis and with the influence of new legal technologies, things began to change. Clients were increasingly demanding that their lawyers use technological tools and improve their processes to improve the delivery of their legal services.