The Modern Law Department: The Ideal State

Legal operations
As a general counsel today, it’s not enough to drive down legal costs and to manage efficient legal workflows. If you want to truly build a high-performing law department and deliver superior value, you must simultaneously address several essential areas.

The Modern Law Department strategically uses legal technology in legal operations, specifically to:

• Automate routine administrative tasks like tracking down updates from law firms, checking invoices for billing guideline violations, and approving invoices
• Have visibility into all aspects of a matter, from initial intake to final invoice
• Easily communicate and collaborate with outside counsel
• Manage current and predicting future spend
• Use data analytics to demonstrate the value of the law department

By leveraging the right legal technology, legal operations run more efficiently and effectively, and the corporate attorneys’ time is freed up to spend on higher value activities. 

The practice of law
The practice of law is no different. Using effective legal technology, the corporate attorney in the Modern Law Department can consistently have confidence in his or her legal work — even in unfamiliar matters — knowing that the most reliable, most current legal information was quickly and easily found and that this legal information was properly interpreted and then skillfully applied, helping mitigate risk for the organization and freeing up more time to serve as the organization’s trusted advisor.

The company
Lastly, the law department attorney in the Modern Law Department must understand and align his or her legal services with the business goals of the organization and demonstrate the law department’s contributions to those goals. Depending upon the goal, this demonstration could be either qualitative — surveying key stakeholders on law department performance — or quantitative — analyzing outside counsel rates. Leveraging the right legal technology allows Modern Law Department attorneys to be data-driven and proactive, so they can consistently provide superior value.

If you’re like most corporate counsel, you’re probably wondering if it’s truly possible to deliver superior value when you’re constantly doing more and more with less and less, when you’re never fully confident in your legal information as you face unfamiliar matters, and when you must continue to develop and execute both legal and business initiatives. Given these many disparate demands, is it possible to build the Modern Law Department?

What Law Departments Have Told Us

In the 2019 Legal Department Operations Index conducted by the Legal Executive Institute, 210 law departments, including 75 companies in the Fortune 1,000, attorneys ranked their highest priorities.⁴

Here are their top eight priorities:

Law departments like yours may be working diligently to address these issues; unfortunately, they have remained counsels’ top concerns for the past several years. So, what is preventing most general counsel or legal operations professionals from successfully addressing these issues to build that Modern Law Department so they can deliver superior value? To discover why, let’s take a closer look.

The Current State: 3 Challenges to Delivering Superior Value

Challenge #1: Solving the “know how” problem
Even if you’re a master legal researcher, conducting legal research is challenging because you work within a dynamic legal landscape made more complex by ever-changing case law, regulations, and government policy, often across multiple jurisdictions. It’s difficult to stay abreast in matters familiar to you, much less in those that aren’t.  

If you’re like most corporate counsel, you’re not always fully confident you’ve uncovered everything you need in your research, especially in matters new to you. In our experience at Thomson Reuters, some of the questions corporate attorneys like yourself commonly ask include:

• What did I miss?
• Am I asking the right questions?
• Is my information up to date?
• Is there a better resource?
• Is the argument I am making the best argument to be made?
• Have I addressed my argument’s weaknesses?

When you spend too much time working on a matter, when you’re not confident that you’ve uncovered everything relevant, when the rules frequently change, and you constantly find yourself on unfamiliar ground, you are unable to sustain efficiency and productivity.

Even if you know your legal understanding is sound, how do you interpret and apply it to the matter at hand, especially when that matter is unfamiliar to you?

Well, you could engage outside counsel. Unfortunately, this option is not always viable, due to static or shrinking law department budgets. In the 2019 Legal Operations Index report, 24% of law departments reported their budgets decreasing while 40% reported their budgets remained flat. Only 35% reported their budgets increasing.⁵

In addition to shrinking or static budgets that many law departments are facing, are two other issues: volume of work and in-house attorney head count.

In this same report, 68% of law departments reported their volume of legal work increasing. To address this increase, 53% have increased work brought in house with 37% increasing the number of in-house attorneys. Forty-seven percent of law departments have increased outside counsel spending.⁶

Whether or not law departments bring their increasing legal workload in-house or send to outside counsel; whether or not law departments increase attorney head count; and whether or not law departments face decreasing, static or increasing budgets, there is one challenge they all face. It’s the “legal know-how problem.” Solving the legal know-how problem means you are consistently confident in the legal information you use in a matter (knowing) and then you can confidently interpret and apply that legal information to that matter (knowing-how).

The legal know how problem is one of the challenges to establishing the Modern Law Department. 

Challenge #2: Creating efficient legal workflows and managing spend
In the 2018 Thomson Reuters/Acritas State of the Corporate Law Department report, 41% of law departments surveyed said that technology was key to helping address an increased workload.⁷

Technology is key to building the Modern Law Department, however, not just any technology. And herein lies the problem with the current state. Law departments have leveraged separate technologies, such as email, document management, and e-billing, in an attempt to create more productive workflows and manage spend. However, because each technological solution is separate — and frequently combined with manual methods like paper filing — the law department achieves neither workflow productivity nor spend management.

Challenge #3: Quantifying the law department’s contribution to the business
Trying to manage a combination of separate technologies and various manual methods not only reduces the opportunity for law departments to be more productive and effectively manage spend, but it also prevents law department leadership from acquiring the data needed on matter cost, time spent on matters, overall spend, etc., so they can quantify the law department’s contribution to the business.

This quantification is a key column of Modern Law Departments. Innovative corporate law departments harness technology for more than managing workload. For them, legal technology also supplies analytical tools, provides predictive capabilities, employs early warning systems, and helps track compliance. These tools give them deep insights that transform their work from managing the status quo to exceeding stakeholder expectations and delivering superior value.

The Blueprint for Building the Modern Law Department

During the recent CLOC 2019 conference, a panel of legal operations thought leaders provided some insights into how corporate law departments can move from the current state to the ideal state.⁸

Thought Leaders

In their discussion, these panelists agreed that the challenges facing today’s corporate law departments are formidable, but not insurmountable. Cost pressures, changing regulatory requirements, demand for digital change, challenges attracting and retaining the appropriate talent, and willingness to outsource certain functions are all top-of-mind for law department leaders.

The research supports this position. According to the 2019 State of Corporate Law Departments report jointly produced by Thomson Reuters and Acritas, high-performing law departments deliver superior value by maximizing their organizations’ success and by providing long-term shareholder value.⁹

The Four Columns of the Modern Law Department

There has been much talk about the “Modern Law Department”, but what exactly is it?

Think of the Modern Law Department as a building anchored to a foundation and supported by columns. First, let’s take a look at the columns:

• Control of spend
• Data privacy

By selecting the right legal technology to improve legal research, streamline workflows, manage spend, and quantify the law department’s contributions to the business while ensuring data privacy, you will have a strong foundation for building the Modern Law Department.

The Modern Law Department: Designed to Deliver Superior Value

In the previous pages, we explored what is meant by the Modern Law Department, the current state of legal department operations and the challenges to building a highly effective and efficient department. Lastly, we examined a blueprint for building the Modern Law Department. It is through this design — the Modern Law Department — that you can deliver superior value to your key stakeholders.

To get started, here are some additional points to consider:

Improve legal know-how: Stay on top of the latest legal developments and changes in state and federal regulations across jurisdictions. Get access to expert, easy-to-use legal guidance on any matter in the form of practice notes, checklists, and toolkits. Your solution: Practical Law or Practical Law Connect

Streamline legal workflows and manage spend: Automate the matter intake process and have visibility into all of your matters, including matter budget and spend. Manage and automate your invoice billing guideline violations, approvals and payment. Easily communicate with partners both inside and outside the legal department. Your solution: Legal Tracker

Quantify the law department’s contributions to the business: Track matter spend to budget, receiving customized alerts to flag spend issues. Easily access matter spend history to reliably forecast future budgets and to create reports for internal partners. Use industry analytics and custom dashboards to show your stakeholders the metrics that they need and that show the law department’s value to the business. Your solution: Legal Tracker

Ensure data privacy: Keep up to date with the latest regulations, research data privacy issues and be confident your research is complete, mitigate risk to the organization by understanding and helping enforce data privacy requirements, understand regulations across jurisdictions and collaborate with colleagues by sharing research folders. Your solution: Data Privacy Advisor

The Next Step

As we’ve briefly explored in this paper, businesses place great demands on law departments these days, with a growing volume of legal work and increased requirements to report out and manage to budget. The legal landscape is constantly shifting, and department operations are becoming ever more complex.

These demands interfere with doing higher value work: serving as the trusted legal advisor to the business and delivering superior value. This work requires having the time to devote to thoughtful reflection, so as to make informed decisions and to offer prudent advice.

But time for such higher-value work will continue becoming scarcer, as the demands are unrelenting. The only viable solution is to rely upon the right legal technology, enabling corporate counsel to reclaim the time by automating routine tasks and by doing legal work more efficiently.

The right legal technology is the foundation for building the Modern Law Department. Take the next step and learn more about this topic, visit legalsolutions.com/corporate.

Download white paper

Footnotes:
¹ 2019 Legal Department Operations Index.
² Ibid.
³ Ibid.
⁴ 2019 Legal Department Operations Index.
⁵ 2019 Legal Department Operations Index.
⁶ Ibid.
⁷ 2018 State of Corporate Law Department: Innovation, Data and Collaboration Drive Optimal Results.
⁸ Jurva, Gina, “On the Ground at the CLOC Institute 2019: How to Be a Legal Ops Business Enabler”, blogpost, May 17, 2019.
⁹ 2019 State of Corporate Law Departments: Improving the Impact of Legal Services report.
¹⁰ 2019 State of Corporate Law Departments: Improving the Impact of Legal Services report.