What are the characteristics of top-performing law departments?
Last year’s global pandemic and ensuing economic crisis took its toll on organizations around the world as many had to dramatically shift into a new way of working amid the turmoil. Now, as the crisis ebbs in the U.S. and other parts of the world, many companies are looking to the lessons they’ve learned over the past 18 months as they move forward into a still-settling environment.
Nowhere are these lessons more valuable than within corporate law departments, which often had to be among the first to pivot into crisis mode and now must be among the first to navigate how business will be done as they move ahead, according to Thomson Reuters’ 2021 State of Corporate Law Departments report.
As we move through 2021, the challenges continue. However, many law departments are now much better prepared because of their experiences during the pandemic. Many in-house attorneys have formed a new, adaptable mindset and have shown the effectiveness of a remote working model. While legal budgets are likely to continue to be stretched, forward-thinking legal teams will be using this time to invest in the technology, processes, and smart resourcing they will need to optimize value and effectiveness with the limited resources they have.
How the pandemic changed the way law departments work
So, what are the most common characteristics of those law departments that are most ready to capitalize on the returning economy in a post-pandemic era?
The report identifies four key areas that will be critical for law departments to master moving forward, including adopting needed technology, communicating with business partners, leveraging outside resources, and minimizing risk to the company.
The report also suggests that legal operations professionals working within corporate law departments are crucial to driving change. And many departments are heeding that suggestion. Even as budgets tightened and other roles were reduced, more than 80% of law departments that were hiring added legal ops roles last year — something that is likely to continue as the industry re-settles after the pandemic.
Adopting and leveraging the necessary technology needed to run a modern law department effectively and efficiently is critical. In fact, the “support of essential technology and processes” was identified in the report as a key determinant of success. According to the report, just 30% of departments surveyed said they were increasing their investment in tech, meaning that a large majority were not.
Tech adaptability — especially in a future where a larger portion of the workforce is going to continue working remotely — is not just a box-checking exercise, but rather an ingrained part of forward-thinking legal department DNA that will allow for the flexibility and adaptability that will be essential going forward. The departments that can stay nimble and adaptable will give their organizations a competitive advantage.
Tech-enabled process should imbue all facets of the department workflow, but most importantly, they should dictate how departments handle remote working and online meeting cadence. Here, legal ops professionals can help prepare and train department legal teams to ensure the new tech tools get their most optimal use.
Another crucial characteristic for successful law departments is, unsurprisingly, communications. With so much traditional communication breaking down during the pandemic and alternatives like video conferencing, telephone calls, emails, and texts replacing most in-person interaction, modes of communication will continue to carry great importance going forward.
Law department leaders need to make sure they’re checking in regularly with internal business partners to ensure the legal viewpoint is considered at all key meetings and that risks are identified and clearly explained. Further, they need to foster a creative, non-hierarchical culture within the department in which all team members feel free to contribute ideas toward solving challenging issues.
Law departments can also glean much from how their outside legal services providers operate, whether external counsel or alternative legal services providers (ALSP). Again, this is an area where legal ops professionals can lead the department in making the best use of available resources.
During the pandemic, many outside law firms redirected their knowledge-sharing efforts to help their clients understand the legal impacts of the pandemic and provided both general and tailored advice for clients in the form of e-newsletters, webinars, and knowledge portals.
Now, law departments should not let these services languish; instead they should take full advantage of the kind of expertise and resource sharing that outside legal providers can offer. Further, law departments would be wise to follow the ALSP lead by maintaining their flexible working options after the pandemic and develop a more engaged and creative team — and encourage their outside law firms to do this as well.
The huge value in accessing free law firm resources to help identify and understand emerging legal issues will also help forward-thinking law departments better minimize any risk the company may face.
Key tasks — such as tracking evolving post pandemic-related regulations and ensuring compliance or creating and maintaining a “risk register” that incorporates and ranks all potential legal risks — will help the department take the necessary steps to mitigate the most concerning risks.
Law departments leaders would do well to remember that there can, and likely will be, another crisis in the future — one of unknown scope, type, and timing.
The flexible tools, systems, and staff that law departments established during the pandemic should not be abandoned to “return to normal.” Instead, department leaders need to plan out what the continued transformation of the department looks like going forward.
And, as they invest more in technology and legal operations expertise, leaders need to be able to think deeply about how to organize the department’s workflow, personnel, and resources. Leaders also must access needed outside expertise and offer employees the desired flexibility to continue to improve efficiency and achieve the goals of the department and its business partners.
Into 2021 and beyond, the law department that will be the most successful is the one that can demonstrate its enhanced value to its business partners by moving more quickly and effectively while helping the business seize competitive advantages.