In-house legal departments will continue to play a greater role within their business, while adapting to technological innovation to help them deliver value for money. This is the general consensus of respondents to a recent survey organized by Wolters Kluwer’s ELM Solution.
As this evolution unfolds we are likely to see more senior lawyers on company boards and more legal companies looking to forge closer links with in-house legal departments, the firm states. Generally, the move will be towards an ever-more strategic role for General Counsels (GCs) - 54% of those surveyed predict they’ll be seen as “an integral part of the business leadership”) over the course of the next three years. Value for money and spending resources wisely also continues to be key according to the findings of the General Counsel Barometer 2017.
Notably, investment in technology will increase as a means to achieving these goals. “Everything we do is strategic; It isn’t just about being operational,” says Funke Abimbola, General Counsel and Head of Financial Compliance at Roche in the UK. “And our role is only going to become more strategic in the coming years. Our priority is always to align with the company’s goals.”
For all its potential, technology clearly still has some way to go in terms of take-up, however, Wolters Kluwer says. One of the standout figures in the survey is that while 77% of the largest companies (by turnover) say they use specific legal tech capable of dealing with multiple areas of legal process, that figure drops to just 4% among the smallest.
This may partly be due to the market for technical innovations remaining fragmented and relatively immature. Indeed, a recent report of the Law Society (which represents solicitors in England and Wales) found that in 2015, more than 600 technical innovations aimed at the legal profession hit the market.
However, the report adds, many were aimed at “very specific, singular problems” and did not have broad appeal. Its researchers also found considerable scepticism over the increasing fascination with robots in the legal profession, with lawyers determined that their services should not lose the “human touch”. Indeed, the role of technology can be to relieve the legal department from processes that can be automated and do not need specialist legal skills, providing the data and reports that legal leaders need to advise the business from a legal and commercial perspective.
Maurus Schreyvogel, Head of Operational Excellence & Strategic Assistant to Group General Counsel, Novartis International, perhaps sums up the situation for many GCs, when he says that while bringing more technology into the legal department is one of his company’s focuses, it is not the only one. “I would say our key priority is to increase satisfaction among our customers,” he says in the report. “Those are the people we’re here for – the people we counsel, from the commercial team to R&D, to other corporate functions. And we need to be on our toes to deal with the changing legal environment. For example, we now spend a lot of time reacting to government investigations; this is a fairly new area for us to be focusing on and so we need to be adept at transferring lawyers from one thing to another.”
He also highlights the ongoing need for legal departments to keep a close eye on budgets, while emphasising that cost is not the only factor and that working “smarter” is a key area of focus.
And while external organisations are proving important to GCs, don’t expect a return to the days when external counsel could expect their bills to be largely waved through without too much debate, Wolters Kluwer says. Although almost half of the surveyed organisations spent more than $100m a year with outside law practices, they are only going to demand increased value and transparency.
The survey sought responses from organizations divided into three groups according to annual turnover. These were as follows: less than $5 billion (30%), $5-$25 billion (35%) and in excess of $25 billion (35%). In terms of location, the companies were headquartered in a range of European nations, with the majority in the U.K. and France (30% each), and a sizeable proportion in Switzerland (16%) and Germany (14%). Others included Belgium, the Netherlands and the Nordic countries.
Respondents were split equally from finance and banking, pharma and chemicals, telecoms, energy and utilities, and commodities and mining. The organizations tended to have sizeable legal departments, with the majority (36%) featuring a headcount of more than 150 and a further 25% numbering between 100-150 people.
Ranked one of the world’s largest legal service organizations with more than 180 years of legal expertise, Wolters Kluwer’s ELM Solutions claims to “leverage a deep understanding of customer needs to transform the Enterprise Legal Management experience and help corporate legal departments and insurance claims organizations make better business decisions.”
It serves 33,000 legal service provider connections in more than 190 countries. This network is comprised of large and medium-sized law firms, solo practitioners, IP agents, consultants, and other vendors. This includes 100% of the Am Law 200 (the highest grossing law firms in the US), 100% of the Am Law Global 100 (the highest grossing law firms in the world), law firms in all 50 US states and most US territories and law firms in every country in the EU, including all five of the UK’s Magic Circle law firms.