When done right, Legal can be a competitive advantage for any organization.
Contracts lock in and secure ‘value’ for organizations - if you can optimize and expedite contracting processes, you’ll support the business in generating more revenue and will soon be viewed as a strategic business partner.
Improving and expediting contracting processes for your business is an aspirational (yet very achievable) goal for a sole legal counsel or small legal teams which will drive huge ROI.
In this article, we cover:
- How to build a Legal function that is viewed as a strategic business partner (without budget for legal tech or other initiatives).
- How to secure budget for technology-driven initiatives
- Once secured, what to do with that budget
Being a sole legal counsel is hard… and getting harder
We work with legal teams of all shapes and sizes. Large organizations are often fortunate to have different lawyers specializing in different areas, whereas smaller businesses are often reliant on one or two generalist powerhouses working across a diverse range of areas.
No matter the size, it is well documented that legal teams are experiencing increasing workloads/expectations, yet stagnant or decreasing budgets. And while it’s a problem for everyone, we often see it’s the smaller teams that seem to be drowning the most.
But you don’t need big budgets to improve how legal work gets done. Even if there is no budget, legal teams can have a huge impact on the business by implementing a few changes.
Transforming your legal function without a dedicated budget
We regularly speak with GCs who say they've tried to introduce legal initiatives, but failed because they couldn’t get the budget.
Often this is the result of the GCs taking the wrong approach e.g. focusing on legal needs, as opposed to the impact on the broader business.
We find these GCs often run into the same roadblocks: legal isn’t viewed as a priority or legal could not clearly articulate its value to the wider business. Despite a heavy reliance on legal, the function is not viewed as a strategic asset to the business. That perception needs to change!
If you have no budget for tech or other initiatives, the first step in any successful legal transformation strategy is to work with what you’ve got.
Here are 5 practical tips to help position legal as a strategic business partner (and free up your capacity to add more value):
1. Align Legal with company-wide strategic objectives
Every department should have a set of objectives and a purpose that aligns with the broader objectives of the business, and legal is no exception.
Use these objectives to define a very clear policy on what work you should be doing to achieve these objectives, and what work you should NOT be doing (and then empower the business to do the latter - more on this below).
Legal leaders should work with managers and executives to gain a deeper understanding of what the business is trying to achieve, and align legal to support those strategic objectives.
2. Agree on what is expected of the legal team and measure its impact
Every other department in your business has KPIs, and it’s important that legal isn’t left behind. How can you improve or demonstrate value, if you don’t measure it? Keep the following in mind:
Set clear expectations with your managers and the Exec.
For example: What is the purpose of Legal? Expectations and objectives should be well defined and will change from organization to organization. The Exec will likely not know how to answer that question, and the answer isn’t simply to manage risk! This is your opportunity to define legal’s value proposition, measure it, and achieve it. That will make securing a budget for tech and other initiatives in the future a lot easier!
How will success be measured, and what are your KPIs?
This should be documented and defined to easily articulate the value of legal.
Clearly define acceptable risk
What is acceptable and what is not acceptable risk? If the business is operating within clearly-defined risk parameters, they should be empowered to complete the task themselves and self-serve without legal involvement.
3. Define and standardize processes
Defining and standardizing processes is an important step towards transforming your legal function. For example: How does a contract flow from creation, internal collaboration and approval, to negotiation, signing, storage and tracking post-signing milestones? Can you improve the process? What are the bottlenecks? Can they be removed?
Here are some quick wins:
- Build out a standard briefing form for legal support requests. This creates a consistent intake channel and collects all (or most) of the facts up front. When done right, a standard briefing form will help you avoid the back and forth ping pong that comes with briefing over email! The rule should be, if you don’t have all of the information, don’t come to me.
- Narrow the scope of who can request legal support. Close the floodgates and ensure only relevant stakeholders can pass support requests to legal.
- Standardize templates and make them easily accessible/usable.
- Create self-help guidance or FAQs. This prompts the business in the right direction without legal involvement
- Build standard contract review and approval processes based on clear delegations of authority.
- Define rules of engagement. For example, only engage legal if certain clauses in an agreement are being negotiated. Similarly, you don’t need to approve changes to a standard agreement if it’s only commercial in nature. Rules of engagement can be tailored to your own context, but will save you time and energy.
- Define fall-back positions during a negotiation.
This may seem like a lot of work to set up, but the long term ROI will be huge. And when you find yourself in a position to secure a budget, implementing technology to support standardized and well defined processes will set you up for success!
4. Encourage autonomy and self-service by the business
You’ve completed steps 1-3, now it’s time to empower and encourage the business to self-serve and make certain decisions without legal involvement.
This approach should be supported by your managers and the executive. The business can then operate at record speeds with the support of FAQs, rules of engagement, templates, fall back positions and more. If all else fails, the business has clearly defined parameters and guidelines about when to involve legal.
5. Train the business
Once you have implemented steps 1-4, invest time in training the business - it will build trust and pay dividends in the long run! Training can take many forms, including videos, webinars and in-person sessions. But it’s important to remember that training is an ongoing process. Continuing to encourage business users to utilize the processes and systems the legal team has developed will entrench efficiencies and create a positive culture in the long-run.
How to secure budget for Legal transformation initiatives
Having achieved big wins using the 5 steps above, securing budget for the next phase of transformation should be a lot easier! After all, the perception of the legal function should now have changed - and imagine what the impact will be with tech?! It’s a no brainer!
To secure a budget, you must have well-defined problems that impact the business broadly and align with organization-wide strategy.
Get alignment with your manager or the Exec on the size of the problem (using metrics where possible). If the problem is properly articulated as affecting the entire business, the budget for the solution should follow naturally.
Many GCs fail at this first hurdle. They try to get sign-off for a tech-solution before getting alignment on the problem first (or the size of the problem),and in most scenarios, the business didn't even know there was a problem!
When you’re ready to build your business case, it’s critical that you draw attention to how the inefficiencies impact the broader business - what is the cost and impact of ‘now’?! Remember - legal done right is a competitive advantage, not a bottleneck, but solving legal problems alone doesn’t always secure the budget. Solving business-wide problems via a legal tech solution is a different story.
Almost every CFO will initially push back on an initiative that requires additional spend - that’s their job! It’s on you to demonstrate how the initiative will save the business time and money. The vendors you’re working with should help with ROI metrics and should be held accountable to that business case.
How to maximize your new budget
Congratulations! You’ve secured budget for your legal transformation project.
You’ve proved that your legal function is there to drive competitive advantage and now the next (and most important) step is to spend your money wisely.
Before you go spending, get clear on your requirements, areas of greatest need, and the potential impact/ROI of a solution. Be sure to partner with a vendor that can support your entire roadmap, not just one feature.
Although most GCs rate implementing technology as their top priority, unfortunately many fail at the first hurdle.
With such a wide range of tools available, it’s important to understand where to begin based on the needs of your business and Legal team.
When considering how legal technology could help you, start with identifying where the greatest pain is and work from there. Work through a set of desired capabilities – areas that require/have greatest opportunity for improvement – and prioritize the capabilities based on the needs of your organization and potential ROI.
Finally, technology isn't always the answer. Consider the work that is currently outsourced to law firms. Could you bring that work in-house and leverage strategic legal secondments to ensure your resourcing fluctuates with the team’s workload? In turn, you will save on external counsel fees, which can be redistributed to other legal initiatives.
It’s also worth considering low cost, tech-enabled alternative legal service providers that specialize in specific areas of law. These options may be perfectly suited to the high-frequency legal work that you find yourself caught up in, and are typically a fraction of the cost of a traditional law firm.
Over to you
No matter what stage of the legal transformation journey you are in, there is always progress to be made.
Reflect on your company’s overall goals and objectives and identify how legal can have more of a strategic impact.
Realign your daily operations to focus on the highest value tasks, and empower your business to manage low-risk activities themselves.
It might appear daunting, but hundreds of functions have found success by following this approach.
It’s a really exciting time to have a huge impact as in-house lawyers! This approach can lead many more lawyers to ‘having a strategic seat at the table!’