A recent ³ÉÈËÓ°Òô survey, Escaping the in-house legal labyrinth, explores the ways in which in-house legal teams use legal technology to demonstrate value to their businesses. The survey found that productivity remains a top priority for in-house teams, but the expected outcome of that productivity has changed over time.
In the past, productivity tended to mean providing high-value, high-quality legal expertise. But, as shown in the survey and corroborated in our earlier In-House report, ‘Making the intangible, tangible: How legal teams are approaching value creation’, in-house lawyers are increasingly expected to take a leading role in their organisation and contribute to successful commercial outcomes, not (simply) provide legal advice.
My article will explore that shift. It will look at how the in-house legal function has changed in recent years, how in-house lawyers can demonstrate their significant commercial and social value to their organisations, and how legal tech plays a vital role in all of this.
As I mentioned above, the legal function has changed over recent years. While providing high-quality legal expertise is still at the heart of the legal role, it is no longer its only business function. In-house lawyers are expected to add more value to their business through their commercial acumen, which requires a very different skillset from one the that lawyers have traditionally practiced and been trained for.
In-house lawyers were once largely legal advisors, offering specific, functional, and impartial legal advice to companies with the primary goal of reducing risk. That role prioritised quick responses and immediate legal solutions.
But leaders of legal teams are now expected to be far more integrated into their organisations, and have become more of a strategic asset, not just an assurance function. That means that in-house lawyers need to adopt a wide view of the organisation, demonstrating an understanding of all business objectives, and contributing commercial as well as social value.
This chart appears in ‘Making the intangible, tangible: How legal teams are approaching value creation’
In-house lawyers may find themselves leading on environmental, social, and governance, or even equality, diversity, and inclusion, despite the fact that such policies seldom require specific legal expertise. They may work with the board to develop a strategy. They may need to tackle structural issues in organisations, or ensure greater employee development. They may need to share practices and norms across organisations, or use their wider view of the business to boost cross-functional working and collaboration. They may need to streamline processes, or find solutions to non-legal problems such as tackling low staff retention or dismantling siloes. They may have to . And they may have to do all of the above while still providing high-quality legal advice to the organisation.
In short, in-house lawyers have a lot of work and not a lot of time. It is not surprising, as shown in the recent ³ÉÈËÓ°Òô survey, that teams are under pressure to do more with less, and that they are constantly looking to boost productivity and to find more effective ways to create value.
Value creation has become essential for in-house lawyers, as explored in the earlier ³ÉÈËÓ°Òô report, ‘Making the intangible, tangible: How legal teams are approaching value creation’. According to that report, the best way to add direct value is to contribute to an increase in revenue. In-house lawyers are regularly practicing that direct link to value creation, with more than three-quarters (78%) suggesting that they actively look for ways to increase revenue. Perhaps the most obvious way, cited by 64% of in-house lawyers, consists of involvement in negotiations with customers, suppliers, and third parties. That offers a direct route and allows in-house lawyers to use some of the legal skills they’ve developed.
Long-term strategy and collaboration are a perhaps more indirect way to add value to organisations, but one often cited in the report, with 90% of in-house respondents involved in strategy and 93% involved in collaboration. These routes do not directly increase revenue, but add commercial value through creating and progressing organisational goals.
Commercial value is only one side of the story. The ³ÉÈËÓ°Òô In-House Insights Report demonstrated, for example, that in-house lawyers are increasingly becoming the ethical champions of their business, broadly practicing, upholding, and championing ethics across an organisation. Indeed, 93% of in-house lawyers said that the promotion and protection of ethics was one of the core ways in which they deliver value.
The move towards championing ethics is corroborated in the recent ³ÉÈËÓ°Òô survey, which showed an increasing emphasis on non-commercial value. Mark Smith, Director of Strategic Markets at ³ÉÈËÓ°Òô, says: ‘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.’
In-house lawyers need to demonstrate how they add value, both commercial and societal, as well as simply get more done. It is perhaps no surprise that many are turning to legal tech, particularly legal tech that provides a high return on investment. In the survey, for example, 74% of respondents said increasing productivity is the biggest benefit of legal technology.
Legal tech provides many benefits. Automation can free up time spent on more repetitive, tedious tasks, which enable in-house legal teams to focus on high-value work. It reduces spend on external law firms, cuts costs around other legal functions, streamlines processes, reduces staff turnover, improves employee morale, and so much more. And, on top of that, legal tech is playing an increasing role around recruitment, with 50% of respondents to our survey suggesting they wouldn’t join a company without legal tech.
So legal tech is playing an increasingly important role in in-house legal teams. And, as a result, the overall demand for people who are capable of using and optimising such tech has drastically increased. According to the ³ÉÈËÓ°Òô survey, for example, 82% of respondents agreed demand for technology skills will increase in their in-house legal teams. In-house teams of the future will have more tech-savvy lawyers, achieving more with less, creating more commercial and social value, and heavily relying on legal tech to support that effort.
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