Accelerating legal function modernization requires you to be fit for growth

In order to enable the business at the speed it needs, and manage overall risks, in-house law departments are facing new heights and dimensions of complexity. Demonstrating value to their executives and the business is paramount, yet oftentimes they are being asked to do more with less. Leaders know that they should enhance and transform their legal operations so that they can evolve with the business, but many still haven’t taken actions to set themselves up for success.

Now is the time to create a modern law practice. And many legal functions are likely already in a state of needing to catch up.

The Fit for Growth journey

We’ve previously detailed four tenets of a modern law practice:

  1. A diverse, agile and collaborative workforce
  2. Business-aligned and scalable
  3. Data agility to strategic decision-making
  4. Platform-driven

But how does a law department prepare for and execute this transformation? For more than a decade, PwC has practiced a methodology called Fit for Growth, which enables organizations of all types to focus on their core strategic capabilities, improving and enhancing revenue streams, and reducing misaligned costs, all to redirect resources to transformative efforts that can help them thrive.

While this methodology applies across corporate functions, it is increasingly relevant for the modernization efforts of law departments. In contrast to a typical cost reduction program that can weaken a business or expose it to risk, Fit for Growth could guide improvements in legal operations’ efficiency that can competitively strengthen a company — aligning the law department’s focus to the company’s overall business strategy.

Taking a Fit for Growth approach requires shifting the department’s fundamental purpose beyond protecting their company from legal risk. With chief legal officers and general counsel already privy to C-suite conversations, the legal function can drive business outcomes and greater shareholder value.

Law departments have opportunities to proactively deliver advice around how the business can achieve its objectives. Inside organizations, highly capable legal professionals have deep institutional knowledge that could help the business achieve its objectives faster. The key is to free up their capacity to allow them to provide more value.

Getting to a Fit for Growth model, where law departments can focus on adding value, starts with an activity analysis — which is about understanding the work your people are doing and what the legal function is spending its time on. This involves determining what the actual daily work the law department’s personnel does or does not do, at what level of seniority work occurs at, what value the business gets from that work and ensuring these tasks are aligned to the strategic objectives of the business.

Consider, for example, the amount of time spent by lawyers individually tracking legal work in spreadsheets or notebooks — something many still do. Not only can these processes be inefficient, they can be disconnected from what the rest of the business is doing and they reduce access to insights around future risks or opportunities for the business. 

In a modern law department, companies must be more intentional about the work its legal professionals do. By decoupling the time spent on transactional tasks from the value-driving advice the department provides, your top talent can do what they were hired to do — solve problems and provide insights instead of executing processes.

After the organization does its analysis on the law department, it must apply its findings to its business strategy so the department can prioritize its work and how it’s managed.

While the Fit for Growth model can help identify areas to reduce costs, that’s a secondary result. More importantly, Fit for Growth strategically helps determine which areas within the department present opportunities for new ways of working. While there are no one-size-fits-all solutions, some common levers that an organization can start to pull include:

  • Automation and AI: Replace manual data entry with automated data feeds and intelligent tools to alleviate routine work and reduce the risk of errors.
  • Juniorization: Shift some work from more senior lawyers to junior lawyers, paralegals and admins who are suited for the task.
  • Alternative legal service providers: Work with external resources that have lower costs or have specialized knowledge areas. Define their scope of work to effectively drive toward your broader goals.
  • Legal tech rationalization: Integrate purpose-fit technology where possible to streamline repetitive requests. Self-service is one increasingly common approach, enabling law departments to more easily execute on standard NDAs, for example, or get access to information on legal issues through chatbots.

Ultimately, the modern law department should help solve legal issues by being a legal integrator for the business. It should leverage a variety of resources from within the company, but also from other law departments, legal tech operators and legal service providers. The goal? To introduce capabilities that allow your organization to become more scalable, agile and efficient.

In PwC’s experience, by following a Fit for Growth model you can create relevant capacity within your law department without compromising on risk protection. The question then turns to what a law department will choose to do with its efficiency gains: Reinvest in growth or excise the cost? The decision will likely reflect the role the department plays in the business. If legal primarily preserves value, companies often myopically view their role as a cost. A modern law practice, however, distinguishes the work they do as both preserving value and creating value; where expenses are likely seen more as an investment.

Begin the journey

Utilizing the Fit for Growth methodology is not a three-month or even a 12-month project. Instead, it involves continuously evaluating how a law department should invest and prioritize its work. Beginning that journey has never been more essential — now is the time to create a law department capable of adapting to the ever-growing complexity of today’s business environment.

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