For the past 10 years, GCs have largely been able to grow the size of their legal functions unchecked. The underlying logic that it was more cost-effective to do that than to send more work out to external law firms. That’s no longer the case; there is more C-suite attention to the size and value-add of the legal function.
But while there’s a clear desire on the part of in-house lawyers to do more valuable, strategically important work, many still do low-value work such as NDAs, and the idea of sending it all out is not attractive cost-wise. The solution is to embrace tech. But what’s the best way? Piecemeal to deal with specific internal issues is an option that some have chosen, but how does it all join together? What’s best of breed for now and the future, and will the company providing the tech still be around in two years’ time? The challenge is to maintain delivery in the ‘Now’ while exploring how the ‘Next’ and ‘Beyond’ for the function can and should be delivered.
Thinking about the medium term, GCs are looking at how best to transform the function, but for large FS organisations it’s a big undertaking and there are few genuine experts in the market to offer legal consultancy to map the change process required.
Digitising the contract estate was probably on the ‘nice to have’ list up until this year, but Covid-19 has highlighted the business critical need for having digital access to contracts. Business leaders are hungry for data and insight to inform rounds of tough decision making. High-performing legal functions that take ownership of contract data, have deployed legal data strategies, and built their KPIs into/around the business metrics position themselves as strategic advisers, not simply lawyers.
Finally, we need to talk about risk. The risk point is a strategic decision for the GC and the business, and is obviously high on the C-suite agenda. Does the GC function insist it’s not their job to do anything but advise, or do they accept more of an active role? The role of the legal function in the ‘three lines of defence’ model is often poorly defined, making its responsibilities unclear and causing the function to be more reactive than proactive. Clarifying this issue is a key first step in helping the legal team to become a strategic component of the risk architecture of the organisation.
About the author:
Matthew Kellett is EY’s Financial Services UK Law Leader, responsible for building the Financial Services Legal practice in the UK. The practice focuses on Legal Operations consulting, Financial Services regulation and Managed Legal Services.
