Bold and disruptive thinking from the legal team, together with meaningful long-term action, will help organisations weather the coronavirus storm, argue four general counsel.
While law firms across the board are considering cuts to staff and salary – if not already implementing them – in the wake of the global coronavirus pandemic, in-house legal departments are being charged with responsibility to ensure their businesses can not only wade through choppy waters but come out the other side flourishing.
Stepping out of the comfort zone
Reflecting on the present and future challenges for in-house teams, L’Oreal general counsel Anna Lozynski said that adding resources to an in-house legal team is a “universal challenge, at any given time”.
“Accordingly, in-house legal teams have been traditionally lean to begin with, and resources scant – this is business as usual for us. We also tend to be generalists, with a broad and therefore transversal skill set,” she submitted.
“In the space of a fortnight, the entire legal profession has been pushed out of its comfort zone and forced (if they were not already on board) to change the way they have always been doing things, at an unprecedented rate. The push for digitisation of legal functions led by CEOs was already occurring in the USA pre-COVID-19 – I see a more flexible and tech focused ‘more with less v2.0’ way of operating emanating post-COVID-19, as well as a greater awareness and uptake of legal operations within an existing team structure.”
Legal teams cannot underestimate the effects of COVID-19, Lodestar Legal director and GC Simone Tierney told Lawyers Weekly, and must engage with core processes.
“Those who are negatively impacted by the pandemic will start to crumble and will need to cut back resources and utilise skeleton resources to see them through administration. Expect to see a couple of department stores in this category,” she predicted.
Those who are not impacted directly by the pandemic will use this as an opportunity to drive more productivity by augmenting their in-house resources with a better-structured, tiered external panel of firms and more digital platforms that avoid or reduce the external briefing of lawyers for BAU. They will want to invest in their transformation work to make their business ready for competing in the new economy.”
There will also be those who are positively impacted by the pandemic, Ms Tierney continued.
“[They] will need to fortify their teams as they scramble to cope with the opportunity before them. The smarter businesses will also look at how they can use the additional revenue to then invest in the transformation of their businesses, and increasing the internal legal resources to support that transformation,” she said.
“These businesses will be on a growth trajectory if their businesses are benefiting from the pandemic. If they’ve just raised capital or they’ve been presented with opportunities, they’ll be scrambling to get their solutions into the market and will be keeping their in-house teams busy. If they don’t have an in-house team, they’ll see their fees from external law firms rise and so they’ll look to build in-house capacity.”
As leaders, Canon Australia chief legal counsel David Field highlighted, it is “critical that we’re moving beyond reactive responses to the immediate situation”, and thinking about what teams want their organisations to look like when the pandemic is over.
“What will the world look like? How will it have changed? What skills and capabilities will we need?” he noted.
“I’m seeing a real peak in demand for legal, business continuity and risk management functions. We’re in unprecedented times, and everything is new, different and challenging. There simply is no comfort zone at the moment, and it’s important for legal teams to be the ones who are keeping their heads and helping the organisation to take a long-term perspective.”
Adapting and pivoting
For ABC general counsel Connie Carnabuci, it is about continuous management of initiatives she has put in place since assuming her role over two years ago, including a “number of operational innovations aimed and creating additional capacity, improving quality and risk management and supporting accountability to the business and staff wellbeing”.
“We have automated the more simple low-value/low-risk BAU contracts so that lawyers can spend more time on the complex/higher risk matters. We have built know-how repositories and a plain language precedents bank so that lawyers can leverage that knowledge quickly and easily and do their work more confidently and productively, it also means that knowledge is not lost if people leave because the systems remain," she outlined.
“The question for in-house teams remains the same (regardless of COVID-19) have we got the right people with the rights skills prioritising the right work so that the legal function delivers optimal impact to the business?”
While those in private practice are forced to consider cuts, Ms Tierney said that in-house teams should instead be focused on two areas: external legal spend and internal ways of working.
“Utilising their external legal spend differently and more efficiently to reduce the pressure placed on internal costs. There will always be a need for BigLaw. There is, however, no longer a need for BigLaw for everything and GCs/heads of legal should reconsider service lines that are able to be delivered more efficiently and economically by smaller firms that do not have the overheads and structure that necessitate exorbitant hourly rates,” she argued.
With regard to a team’s internal processes, in-house leaders should be asking the following questions, Ms Tierney posited: “How [can this pandemic] be used to reskill their teams to ensure that they are able to do more with less with the use of new platforms? How can they move from their current service delivery model requiring intensive servicing to their commercial/business teams to a digital front end servicing the business? How can the internal legal services delivered be streamlined to remove the layers that have built up over the years increasing friction? How can the organisation reduce the rework? How can you get more straight-through processing?”
For the legal team at L’Oreal, Ms Lozynski outlined, even before the outbreak of COVID-19, data (through our matter management tools) was a powerful tool “to enhance the way we work, as well as communicate, to our business colleagues and management about our productivity and value-add in a way that resonates with them, i.e. using figures on one single page”.
“In the current climate, we were quickly able to pivot and create a new data field for COVID-19 to track our team’s workload against this emerging topic. For example, in March 2020, COVID-19 added 30 per cent workload to the team’s base workload, and our total workload increased +76 per cent vs March 2019. Quarterly, our matter volume was up by 50 per cent vs Q1, 2019, as was our percentage of focus on medium to high-risk matters for the business (meaning our five-year long legal tech and innovation strategy is working),” she said.
“As we focus on new business initiatives, we can add these into our data management software to track the legal effort and energy invested into supporting the business through this unchartered economic environment, as well as tracking against the core business objectives.”
Support within the legal team
When asked how best those underneath the GC/head of legal can assist those at the executive level in order to add value during this time, Ms Lozynski suggested being “bold, curious, disruptive [and] collaborative”.
“Suggest new ideas and ways for the legal team to pivot, as well as connect. Be more agile, responsive and solutions focused than ever before. Keep connecting and networking, internally and externally, through these difficult times. Find out what your legal colleagues at other companies are doing, and share these ideas amongst your team. Get those creative juices flowing!” she said.
Clarity can come in a crisis, she continued.
“Don’t be afraid to start experimenting and re-examining the ways things have always been done. We are seeing positive rapid change and uptake of new ways of working. Use the time now to come up with a transformation plan, even if you may not be able to execute all of it right now. [And], never has there been a time to band together as a unified group of problem-solvers, be supportive, kind and real within the team, but also with one’s colleagues,” she said.
It’s going to be important, Mr Field added, to emerge from the other side of this retaining as much employee and customer trust as possible.
“Organisations that take short-term expedient measures run the risk of jeopardising trusted relationships for years to come,” he argued.
“The most effective thing that legal teams can do is the same as always – add as much value as possible. If you’re adding clear and demonstrable value to your organisation, it’s much less likely to become a conversation about cost.”
The legal team should also, Ms Tierney said, consider the ways that the legal team can implement any and all new measures.
“They should also consider the proposition that if a machine can do the work of the human then the human is wasting their time and should be skilling up to do the work that humans do better than machines,” she said.
“Lawyers the world over in a post-pandemic world need to think about how they solve problems, the problems they’re choosing to solve and the impact they’re making.”
Being accountable for how the team uses its time, Ms Carnabuci warned, will be key.
“My lawyers are mapping out their weekly workplans showing the major matters they will spend their time on in the next week and providing these to me. This allows me to be able to describe very clearly to all functional directors across the corporation the value we are adding to their team’s work,” she said.
“These are a great tool for helping the business understand the value the legal team adds.”
It will also be critical, Ms Carnabuci added, that the legal team understand the corporate strategy, as well as how the work they undertake supports the delivery of that strategy.
“We prepare an annual legal strategy document to explain what legal will focus on throughout the year to responding to the needs of the business, and the objectives in the corporate strategy. We spend our time doing the things the business will value most,” she said.