If you ask any in-house legal department what they need from their outside counsel, traditional legal advice is now just one item on a list of growing needs. Corporate legal departments are being asked to do more with less. They face higher volumes of work, more complexity, tighter deadlines and shrinking budgets. Outside law firms now must play a critical role in not only providing legal advice but serving as trusted business advisors that help maximize in-house efficiency and effectiveness. To do so this, there must be a strong partnership geared toward strategy, communication and continuous improvement. The steps below will help forge that partnership.
All of this starts with selecting the right partner. Whether it is running a formal request for proposals or just speaking to a potential law firm, an in-house legal department needs to articulate who they are and what they need. Without this, law firms cannot provide a full picture of what they can offer and at what cost.
Before conducting a sourcing event, a legal department should assemble an internal project team that includes all relevant stakeholders. That project team should clearly outline the goals and draft a project plan. Goals can include not just the specific work at hand, but higher-level goals aimed at efficiency and effectiveness. For example, if a legal department is hiring a firm to negotiate contracts, goals can include completing contracts faster, with better terms and at a lower cost. Information provided to the law firms should include things like company background, type of work, volume of work, geography, cycle times, stakeholders, gaps in internal processes and pain points for the internal clients. Think outside of just the pure legal advice needed. The same legal department hiring for contract negotiation should consider if it needs a law firm that also has its own contract lifecycle management (CLM) solution with the ability to provide data and reporting on the contracts.
For the responding law firm, it is critical that the firm has the right subject matter experts looking at the company’s request. Responses should be tailored to the specific needs of the prospective client. Law firms should ask questions and not just rely on what is provided. Remember, law firms have more experience in the work and the selection process than its average client who may not know what questions to ask or what is fully needed for the work requested.
Once selected, outside counsel law firms must spend time to get to know their client––no two clients are the same. Start with learning the client’s business. Beyond their products or services, look at factors like size, public or private ownership, global or regional operations and industry regulatory requirements. Understand the company culture. In some cases, the company brand is significant and contributes to a corporate personality. Each client has a distinct profile that influences strategy.
Firms should also look at the distinguishing characteristics of the legal department itself. Is it centralized? How big is it? Is there a legal operations team? How does business integration work? What is the leadership’s risk tolerance? What pressures and constraints like volume or budget does the legal department face? What are the department’s internal processes and policies for the work?
Discuss in more detail the legal department’s priorities and goals. Yes, the law firm was hired for its legal subject matter expertise, but if the client has not already done so, discuss the legal department’s higher-level goals and ways in which the firm can help achieve those goals. Where does the client think it needs to gain efficiency? Where does it think it needs to be more effective?
As a law firm and client learn about each other, they should also align on communication. Methods of communication can vary depending on personal preferences and project requirements. Consider things like how often there should be communication, in what format, what level of detail, stakeholders involved, etc. Firms can lead this process and provide logistical support (e.g., establishing a cadence of regular meetings for key team members, setting up a portal to share documents, scheduling interviews, providing outlines and questions, etc.).
Learning about the client is a continuous process. For the legal department, it must dedicate the time and resources to educate the law firm on the above and more. Doing this will pay off dividends and avoid unnecessary confusion or delay.
Law firms should leverage technology and data to better serve clients both on individual projects and the achievement of high-level goals. By utilizing tools such as artificial intelligence and data analytics, firms can streamline their own processes, improve efficiency and provide more accurate and timely legal advice. Technology enables law firms to manage large volumes of data effectively, automate repetitive tasks and generate actionable insights from complex datasets. This can reduce costs, and allows lawyers to focus on more strategic aspects of their work.
Using technology, law firms can collect and analyze data on client work, providing more personalized services for their clients beyond the traditional legal advice. Key data points can identify areas of opportunity to maximize client’s efficiency, help manage future risk and predict legal trends. Data can work both ways. It can be captured for a previously identified goal. Alternatively, it can identify an issue that was not previously seen and lead to the creation of a new goal. Let’s use the earlier example of a law firm providing contract support to a client that wants to complete contracts faster with better terms and lower costs. By leveraging a CLM system, the law firm can capture key data needed to address those broader goals. This can be data on things like as average cycle times, differences in cycle times based on templates used, provisions most negotiated, revisions most accepted, delays in approvals, etc.
Once the firm has gotten to know its client and captured certain datasets, the parties should revisit the client’s goals and ensure those goals are the right goals and clearly articulated. Once they have done so, it is then time to develop an actionable plan. Law firms often have resources that legal departments do not, they have the benefit of working with a wide range of clients and they can look at issues with a more objective eye. It is critical that law firms bring their expertise here.
Looking at the goals, law firms can assist in identifying areas of improvement by analyzing captured data, providing their observations, studying current internal processes and pinpointing bottlenecks and roadblocks. This data-driven approach allows for a clear understanding of the existing inefficiencies and helps in narrowing down to a few critical improvement opportunities. Again, using the example of the law firm providing contract review, this assessment will identify opportunities for better efficiency and effectiveness like fire drills leading to insufficient terms, onerous business approvals leading to delays in signature or senior management not involved in complex deals.
After identifying the key areas for improvement, the law firm should help develop a plan with practical and actionable solutions tailored to the client. For the law firm providing contract review, this may include streamlining the approval process, creating a new process to start contracts earlier and developing a communication and engagement plan for senior management. In addition to the solutions, setting specific, measurable goals is crucial for tracking progress and ensuring accountability. Law firms can then assist in implementing these solutions and establishing metrics for measuring, assessing and reporting on their effectiveness.
The plan should be continuously monitored and adjusted as progress is tracked, feedback is collected, unanticipated changes occur and new priorities develop. When this is done correctly, the legal department will achieve sustained improvements in efficiency and effectiveness. The law firm will stand out among its peers as a trusted long-term business advisor interested in not only the legal work but the overall success of the company. And when new legal needs arise within the company, the law firm proven to be that trusted business advisor will be the one capturing new business.
