Escaping the in-house legal labyrinth: using technology to demonstrate value

In-house legal counsel are under increasing pressure to deliver – and they believe legal technology is their silver bullet.

But instead of looking to innovate across the board, the focal point for many is streamlining the simple, low-level tasks so there's more time to dedicate to strategic work.

A short-term outlook means in-house legal departments risk getting stuck inside a legal labyrinth of their own making.

In this survey of 200+ in-house legal counsel we reveal how legal departments are so focused on coping with their increased workloads that they're missing out on the opportunity to demonstrate their value to the wider organisation through data insights and analytics.

One of the biggest fears for in-house legal counsel is being siloed from the wider organisation. If communication is poor, then their internal reputations, budgets, and place at the boardroom table could be at risk.

It's therefore not surprising to hear that, when asked about their biggest challenges, 54% of respondents said communication with the wider business could be more effective and efficient. This rose to 71% when looking at general counsel alone.

The most obvious answer to this communication conundrum is to ramp up internal exposure to the wider business. Sitting down with heads of sales, marketing, product, digital and the like to advocate the commercial value of the legal team, or setting up cross-departmental workshops or project teams to encourage collaboration.

But could this high-touch approach be what's stopping communication with the rest of the business from being as effective or efficient as it could be?

The majority of in-house legal counsel come from a private practice background, where client relationships rule, so many fall foul by treating their colleagues in the same way they would their clients.

If legal consistently demonstrates its value by meeting business needs – by showing, not telling – then legal will be invited into conversations, rather than having to elbow its way in, said Andy Cooke, the general counsel at business travel management company, TravelPerk.

"Understanding business needs requires the radical act of asking the business what its needs are, taking note of the answer and – this part is critical – not assuming that you know better."

Cooke, who previously worked as legal counsel at esports performance technology company, Fnatic, also pointed out what people want from their legal counsel.

"Answers," he said. "And they would prefer those answers to be delivered in a way that does not require a lengthy conversation with a lawyer who is operating from a misguided, high-touch view of what consumers want from their service providers. That’s where technology comes in."

A great place to start is by utilising the existing technology and tools already used by other departments within the organisation. This will mean legal teams can communicate with other teams using the same platform and the same metrics, and is likely to be a cheaper and quicker solution to implement.

Learn how to effectively incorporate communication objectives into your wider in-house legal team strategy

Communication with the wider business is the top challenge for in-house legal teams

Almost three quarters of general counsel are concerned about communication with the wider business

There's been a noticeable shift in the definitive characteristics of a skilled in-house lawyer in recent years.

As highlighted in Making the intangible, tangible: How in-house teams are approaching value creation, providing high-quality legal expertise is no longer enough. Today's in-house lawyer needs to be adding greater value by demonstrating commercial and technological acumen alongside legal expertise, and contributing to successful commercial outcomes.

These rising expectations means in-house legal leaders need to be savvy when it comes to choosing what they can deliver on and how they go about it.

It's no surprise, when looking at the most appealing benefits of legal technology, both now and in the future, that increasing productivity seems to be the inherent focal point.

'Makes the legal team more productive' was listed as the biggest benefit by respondents in our survey, with just under three-quarters (74%) selecting this as an option. 'Automates simple, repetitive tasks' (54%), 'gives more time to focus on priority issues' (53%), and 'simplifies workflows' (49%) were also popular options.

Read practice notes on the automation of contracting and contract lifecycle management

As the legal function does not typically drive revenue for most businesses, LexisNexis' Director of Strategic Markets, Mark Smith, said legal counsel need to demonstrate value in other ways.

"There's increasing views of value that lie outside the organisation," he said. "One of the biggest macro-shifts we've seen is, not just shareholder value, but a much wider societal value, which really highlights the ESG impetus on in-house counsel."

Efftichia Dower, senior legal counsel at identify tech platform, Onfido, said her business uses contract automation and outsourcing to ensure monotonous tasks are picked up elsewhere, leaving in-house lawyers to get involved in the most exciting and challenging work.

"As in-house lawyers we are true business partners and therefore can be excellent "eyes" on myriad projects across the business. In Onfido this ranges from the big-ticket commercial deals, to helping with launching new products in a frictionless way."

In-house legal counsel should be a part of the fabric of decision-making and talking through new ideas, said Salunke.

"We need to demonstrate our ability to perform, do clever things, optimising processes and getting the most out of our people. Legal advice is a given, but how we become useful and add value to our organisation is by leveraging different resources around us to get more out of them."

Increasing productivity is the top incentive to invest in legal technology

Increasing productivity is front-of-mind for in-house lawyers when thinking about legal technology – but this pressure to deliver may be stopping some from showcasing the value their team is delivering.

When asked about the biggest opportunities legal technology could deliver in the future, significantly fewer respondents (62%) listed 'makes the legal team more productive' (74% listed it as a current benefit). This suggests a commonly shared belief that the opportunity to increase productivity through legal technology has already been capitalised on – rather than as an opportunity for future growth.

The biggest opportunities of legal technology, to a great many, means clearing their desks of the simple, repetitive, routine work through the use of document automation, contract management and workflow tools. When asked about the future benefits of legal technology, 61% of survey respondents listed 'automates simple, repetitive tasks' (54% listed it as a current benefit) and 60% listed 'simplifies workflows' (49% listed it as a current benefit).

However, a mere 17% of respondents listed 'delivers unique insights' as a current benefit of legal technology, while only 26% listed it as a future opportunity.

This is a stark contrast from the 84% of respondents from our 2020 survey of in-house lawyers who said legal technology must have the ability to surface data insights in the next three to five years.

Data insights can enable in-house teams to plan ahead, pinpoint growth opportunities, spot trends and risks, and better collaborate with other departments. It could even be the answer to in-house legal counsel's biggest challenge – communicating with the wider organisation.

In a similar vein, only 26% of respondents listed 'demonstrates results to the business' as a wider benefit and 32% listed it as an opportunity for the future.

You would think, at a time where in-house lawyers are being pulled in dozens of different directions that stray outside their traditional remit, that more respondents would recognise legal technology for its opportunity to demonstrate value.

In recent years we've seen in-house lawyers make the transition from the traditional "T" shaped lawyer (an expert in a particular field) to the "O" shaped lawyer (looking at opportunities and outcomes).

According to Dower, the very best in-house teams are now data-driven.

"The only way that this can be achieved is with legal design and legal operations. The variety of work an in-house lawyer has to do hasn't changed, but the way that we can record and present data to demonstrate the key work that legal is doing has taken huge strides," she said.

"There is no better way to be a business partner than showcasing that data to the executive team and allowing them to understand the changes and efficiencies the legal team are driving."

For the in-house legal teams that lack the time to implement workflows to manage the repetitive work, Cooke has some suggestions.

"Lawyers in this situation must understand that no-one is coming to save them. Absent intervention, the problem will get worse – the benchmark response time for lawyers to a query is now “how quickly can ChatGPT give me the answer”".

This raises an interesting point in terms of risk, especially if other departments start using ChatGPT for legal advice instead of consulting their legal team.

To get ahead, Cooke suggests in-house legal leaders understand what exactly their teams are doing (and if there's anything they shouldn’t be doing), the tools they have at their disposal (such as ticketing systems to use for managing legal workflow), and internal and external headcount.

"It's critical to recognise that lots of traditionally-conceived legal tasks, like reviewing simple agreements, do not need a lawyer to complete them," he said.

Only two-fifths believe legal technology will transform their departments (although the emergence of ChatGPT is likely to have changed this)