Last week (10 October), Womble Bond Dickinson hosted its annual GC Dinner in London, bringing together leading UK General Counsels (GCs) and Heads of Legal to discuss how legal teams can build strategic partnerships to help support growth and underpin corporate goals.
WBD and guests discussed the importance of building strategic partnerships and what can be done to ensure the viability and success of those partnerships particularly through the use of technology and innovation, and the role external advisors play in helping GCs build strong and durable partnerships.
Aligning a legal team’s strategy with that of the wider business is a challenge that most legal teams face. At the event, GCs had the opportunity to discuss the issues impacting their teams, the innovative and technical measures they need to take to overcome those challenges, and how they can optimise their relationship with external advisers to ensure they are providing continued value to their business and ensure greater efficiency.
What is a strategic partnership?
Strategic partnerships are about lawyers ensuring they deliver good business results rather than simply good legal results. They need to think like the business and be involved at the front end of decision-making.
A successful in-house lawyer should measure his/her success by reference to being a strong business-enabler in addition to being a risk-spotter and adviser.
More than ever before, lawyers are able to collect greater amounts of management information to measure and demonstrate effectiveness and value to internal corporate clients, manage resourcing levels, produce legal budgets and track spend at more granular levels. In addition, quantum leaps in legal technology over the past few years have transformed the way in which lawyers are able to deliver their services to the wider business, if they are brave and nimble enough to be early adopters.
Strategic partnerships as a response to key challenges facing legal teams
In house legal teams need to have a clear understanding of the challenges they face. This will help set the scene for what strategic partnering should be trying to achieve and why teams absolutely need to do it.
Some of the major challenges facing today's in-house counsel include supporting with Brexit planning, delivering more for less, managing personnel transitions and implementing innovative technologies through to improving gender diversity, GDPR and data security and managing budgets…the list keeps on going.
Strategic partnerships play an important role in helping in-house teams have a better understanding of the business, enabling a collaborative and cohesive approach. Through these partnerships, legal teams will have enhanced commercial focus and understand what the internal client is trying to achieve in order to drive matters forward and provide the best added value. It is about working together to achieve one strategic goal.
By way of illustration, some companies have set up networks of internal people from different business functions to understand what is on the horizon. This enables legal teams to have early sight of the challenges ahead and adopt a more proactive approach by setting up preventative measures. Involving the legal teams in those smaller groups also helps in highlighting the output and value they bring to the business as well as their impact on overall business outcomes and strategic plans.
In-house counsel also need to work hard to win trust from other functions in the business. When the legal team is seen as a trusted advisor, it encourages the wider business to further engage and leads to the legal team being called upon at an early stage when issues first arise.
However in-house legal teams have to strike the balance right in not stretching themselves too thin and the business becoming over reliant on them. A common theme reported by those who have achieved advanced stages of strategic partnering is the additional rush of work it can initially generate, which then needs to be addressed by a phase of the legal team pushing back again to reach the optimum balance.
Tools to build effective strategic partnerships
In response to the challenges facing in-house teams and in order to build successful partnerships, there are a range of solutions and tools available.
Risk: We don't live in a risk free world. Businesses should be allowed and even encouraged to take risk, and lawyers need to adopt the same mentality in order for strategic partnering to work. The legal team should be asking about the risk-profile of a matter at the outset and working accordingly, to avoid being seen as the blocker at the end of the line.
Educating teams: Cross education is required across the business to get a consistent view of the different functions working toward the same goal and this will prompt everyone to think beyond their specialism. Internal secondments or time spent co-located with other teams can help achieve this.
Creating a culture of 'yes': It's easier for lawyers to say no than yes. Encouraging and rewarding in-house counsel to find creative and risk-appropriate methods to get to 'yes' instead of 'no' generates corporate success and makes the legal function more accessible within the business.
Compliance teams: Compliance and legal functions may operate cohesively or separately, although the concept of compliance teams is relatively new to some organisations. Compliance teams can play a valuable role in counter-balancing the potential danger of lawyers who successfully adopt strategic partnering 'going native' and forgetting the risk role the legal team plays.
Automation and innovative technologies
Legal technology systems have tremendous potential to do the heavy lifting for business, but the cost of getting the appropriate system can be significant. Many businesses acknowledge the power of these clever technologies, but fail to find the right application for them. Others simply don't know where to start, or see the entry costs in terms of licence fees and manpower set-up time as prohibitive.
Document automation software appears to be the technology 'gateway drug' of choice for many. Conceptually it is easier for businesses to grasp and is popular for disposing of low risk 'churn' work such as NDAs and repeat contracts (although it is increasingly being used to generate first drafts of more complex documents for subsequent tailoring and negotiation). Once businesses have dipped their toe into the lake of legal tech with document automation, and have been able to quantify the savings versus investment, they may be more willing to be bolder with more sophisticated technologies such as AI powered chatbots which are capable of answering common legal questions.
However, for many, automation is too blunt an instrument to deal with the varied and complex range of contracts that legal teams have to deal with day in, day out. Automation can also risk individuals relying too much on the technology and failing to apply their mind to the nuances and potential risks of each specific matter.
The lawyer of the future
Fortunately the role of a highly experienced and skilled lawyer is not dead yet! But lawyers (both external counsel and in-house) do need to expand their skill set to enable them to help businesses embrace the potential of legal technology, freeing up those highly qualified and expensive lawyers to add most strategic value.
Legal teams should start to identify tech skills gaps in their teams, and then either retrain, hire or retire accordingly, to create a legal team fit to embrace all the 21st century has to offer.
Recruitment strategies need to be set to match the needs of the legal team five years into the future. Legal process experts and those with coding skills could find themselves in greater demand than lawyers plying their wares along traditional practice area lines.
External lawyers are increasingly positioning themselves as pioneers in innovative technologies for the legal sector. It is clear that businesses are relying on their external lawyers to bring the technology to them, help them find the appropriate applications and share the investment cost and risk.
Whilst document automation and sophisticated document management systems may have day-to-day application within a business, tools such as contract reading software may be needed only for occasional due diligence or disclosure exercises. It is likely that this technology will therefore need to be sourced through external law firms, and so firms and their lawyers need to adapt to their new role as tech providers.
Strategic partnering is hardly a new idea. The difference now is that the impending pace of technological change in legal service delivery means it should now, or soon, be possible take the concept of strategic partnering to a whole new level.
What's more, in-house lawyers are increasingly looking to their external advisers to help build such strategic partnerships and ensure greater efficiency within their teams whether this is in managing risk, compliance or helping with automation and new technologies.