In-house teams shake off ‘stuck in legal’ label
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The depiction of in-house legal departments as the bottleneck holding back the rest of the business is an outdated cliché, says Thomas Laubert, group general counsel of Daimler, the German carmaker.
“In-house counsel is the one that is [pushing] and has to push digital innovation,” he argues.
While it is still common for business heads to complain that a project or contract has been “stuck in legal”, many general counsel believe this notion of in-house teams always blocking progress is unfair.
In fact, they say, in-house legal departments increasingly use digital technology to speed up processes and are now collaborating more effectively with colleagues.
“We are ultimately benefiting more from this innovation than any other group,” says Laubert, who believes corporate legal departments have been transformed in recent years. “In order to actively shape major developments, such as digitisation and the transformation of our industry, we need to work [in an agile way] and make quick decisions,” he says.
In-house lawyers must grapple with two conflicting responsibilities: on one hand, to act as business enablers in support of new commercial goals; and, on the other, to act as guardians that shield the business from unacceptable legal risks.
At Daimler, the legal team was already focused on digital transformation before the coronavirus pandemic, but the process has accelerated during the crisis, says Laubert. This has led to greater transparency between legal and other business units and, thanks to this new momentum, the legal team wants to reach its digital goals three years early, in 2022.
In some cases, the general upheaval and disruption to working practices caused by the pandemic has eroded resistance and accelerated use of technology in legal work. One example is the wider adoption of electronic signatures on legal documents.
“From a change-management perspective, it did eliminate resistance,” says Marcelo Peviani, legal director at the centre of excellence for Lenovo, the computer maker. “In some cases, there was no alternative as the status quo was not working.”
The Washington-based Association of Corporate Counsel surveyed more than 1,000 chief legal officers and general counsel for its 2020 Chief Legal Officer Survey and found that nearly half of respondents had made greater use of technology solutions in the preceding 12 months. Just over half said they had redesigned workflow processes.
In addition, 29 per cent said they were undertaking digitalisation and technology initiatives such as developing web-based applications for data management related to litigation and contracts, and implementing document management software.
Some general counsel are also improving their use of data to pinpoint the parts of a legal process that can be improved.
Lenovo has recently digitised its contracting processes and is now able to measure how much time is spent on a contract, how many lawyers worked on it, and how much a template has been modified. “Data analytics has enabled insights we never had before,” says Peviani.
Christina Demetriades, general counsel for Europe, the Middle East and Africa at Accenture, says: “By pulling together data and using that, we can understand better what matters to solve problems more quickly. Analytics pay off in their ability to empower decision making and allow us to move faster.”
Artificial intelligence technology is being used to analyse contract or transaction documents. Often, an AI system is deployed to carry out an initial examination of clauses in a third-party document, to see whether it deviates significantly from a standard contract. Only after that will it go to an actual lawyer for further review.
Another new development is lawyers turning to business concepts such as design thinking — an iterative approach that puts the user experience at the heart of the creative process. The focus is on creating quick prototypes to solve a problem and testing them until they meet a particular need.
Demetriades has trained 400 contract lawyers at Accenture in design thinking. This process can, for example, make legal documents faster to navigate — such as by incorporating tables or pictures in addition to text. “It is a method of looking at a problem in a different way and having an open mindset to how that problem might be solved,” she says.
“So far, we have only had positive feedback. The team are real digital natives and [are] thinking about how we can deploy technology to do things better.”
Rethinking legal processes can accelerate change, either by automating some steps or by tackling them differently to provide a better customer experience.
“In one case, there was a knotty challenge with an external partner,” recalls Demetriades.
It was an unusual deal construct, and at first each side had a fixed view of how to shape the transaction, based on tried and tested deal shapes.
Using a design thinking approach, the team worked backwards from the solution and reconsidered commercial priorities, constructing a deal in a new, different shape.
“The revitalised process of getting to the agreement was as important as closing the deal itself,” she says. “It was a much faster turnaround. It also resulted in a closer relationship with the external partner.”
Collaborate to innovate
In-house legal departments are starting to collaborate more on projects with colleagues across the business — marking a shift from seeing themselves as the department that others turn to only when there is a problem.
Some departments, such as the team at Daimler, say they now sit down with engineers, IT experts and data analysts at the start of a project to help drive innovation. More time for such creative work is partly enabled by greater use of technology, such as software that can analyse contracts and carry out other standard tasks.
“In this way, we can relieve the teams’ workload and make better use of their creative potential and shared knowhow,” Laubert says.
One further advance the legal industry is considering is whether routine business contracts can be agreed and standardised, to help in-house legal departments speed up their work.
For example, every day, large companies sign dozens of routine non-disclosure agreements (NDAs). A new group of lawyers, called the One NDA Club, believes that these NDAs should never have to be reviewed or negotiated again, as there should instead be an industry-wide standard contract. Founded by two lawyers from Law Boutique, a legal consultancy, the group aims to persuade 1,000 companies to adopt the one NDA by the end of 2021.
Many general counsel say using technology will help in-house lawyers spend less time on routine tasks and more on higher margin, creative problem solving.
“People say: ‘Are you worried about technology taking your job?’ I’m not worried at all,” says Demetriades. “I want to position us as higher value, problem solving, creative, relationship-building — that is what we are about.”