Jonah Paransky of Wolters Kluwer’s ELM Solutions explains how law department will deliver value with operational rigor. His remarks have been edited for length and style.
CCBJ: How has the corporate legal department’s role expanded beyond its traditional responsibilities?
Jonah Paransky: There are several key items worthy of notice. The first is there’s been a sea change in expectations for how corporate legal departments will operate. In particular, it is expected that they will operate more like other corporate departments driven by process, using data to drive better outcomes, with operational experts and expertise. That’s a major change in expectations from the C-suite.
The department must embed itself into the company so that it can provide better business advice and genuinely be fully integrated into the business’s operations. It must do this while improving the operational capabilities of the organization and the operational efficiencies within the department. There is also an expectation that the corporate legal department will act with financial acuity, with the ability to manage its budget effectively.
What are some ways that corporate legal departments can demonstrate their business value?
To start, it is critical for departments to deeply understand what value they’re providing, measure that value and communicate it back to the organization. It’s not enough to sit at the table and be part of the business conversation. The sales team has key performance indicators they use to communicate the value they provide to the organization, as does the marketing team and the finance team. The corporate legal department needs to be able to instrument the department to understand and demonstrate the value they’re providing, the work they are doing and the outcomes they’re driving back to the organization.
Legal departments will deliver value by embracing operational rigor in the management of the department. The ability to look specifically at questions of budget and spend, to develop spend management initiatives and to make the hard decisions about moving forward with a case or a matter is crucial. Legal departments also need to look at different billing models, such as alternative fee arrangements, how they manage internal versus external spend, the way they manage relationships with their law firms and how they’re using technology to drive better outcomes. It is the ability to think about the value they’re providing, and communicate what they’re doing to reduce legal expenses or drive better legal outcomes or, even better, both.
You mentioned that leveraging technology can help demonstrate business value. What are the trends you see in the legal market along these lines?
As legal departments provide greater ease of use and experience through technology, it should result in increased user adoption. Historically, enterprise software has often been perceived as very powerful and valuable but very difficult to use. As employee expectations and organizations have changed, there is an expectation of usability. This means being able to keep the power of these sophisticated solutions, but at the same time making them radically easier to use and bringing workflows directly to where individuals in the organization and in the legal department work. That is a critically important part of improving business value with technology.
It’s also about using the information the legal department has to drive better corporate outcomes. It means taking data from the day-in and day-out interactions and using it to drive better corporate outcomes through artificial intelligence, analytics and reporting. All of that is driven by technology combined with the right processes.