Our latest piece in the trends analysis series looks at the three trends currently shaping the future of the general counsel and the in-house legal function, and was carefully curated by one of our experts – EY partner and head of legal managed services Anup Kollanethu.
With the impacts of the pandemic continuing and Brexit now looming, the stresses in today’s business ecosystem are unprecedented. In response, businesses in all industries are having to revisit their balance sheets and operating models, navigate the transition to remote working, and build greater agility and efficiency to cope with future crises.
The General Counsel (GC) is on the front line of all these actions. As risks to businesses increase, the GC must find ways to better manage them – yet at lower cost and with decreasing resources. This means doing more with less. The resources required extend beyond budget and headcount to include the technology architecture and the data needed to enhance the agility of the business.
Against this background, three key trends are shaping the future of the GC and in-house legal function.
The GC’s changing role
The competing forces create a challenge that the traditional GC office structure may find difficult to address. Currently, the legal services supply chain for a GC function is split into three parts:
- its in-house capacity and technology
- its external law firm panel
- alternative service providers that it uses on an ad hoc basis
It’s a model that’s well-established but can fail to deliver the best solutions. The key challenge facing GCs is to create a new supply chain approach – one that’s better suited to meeting the pressures they face today in delivering services to internal clients.
Sometimes this may be as simple as tweaking the balance between the three sourcing options. But being fully prepared for the next crisis will demand more. Crucially, it will require GCs to zero in on the data and talent needed to enable innovation in service delivery – and to free up their teams for more strategic work and enterprise knowledge management.
Get this right, and the GC function will become future-ready and resilient. How to get there? A step-by-step approach that focuses systematically on the work to be delivered, the talent to deliver it, the best way of sourcing that talent, and the ideal data and technology estate to support it. Such an approach can enable the function to claim a more pivotal and strategic role in the business.
The need for the right technology to underpin this changing role brings us to ‘legal tech’. It’s a sector with some specific characteristics to be aware of.
In the run-up to the pandemic, there was a surfeit of capital eager to invest in legal tech start-ups. These companies tended to be led either by legal professionals addressing their own area of expertise, or more generalist tech innovators looking to tackle the industry’s current most pressing issues.
The result? A legal tech marketplace that’s awash with point solutions targeted at different parts of the legal value chain – but which lacks end-to-end offerings that support GC functions across the entirety of their processes and operations. This siloed nature brings risks. In fact, adopting point solutions without taking into account the whole legal services portfolio, data strategy and benefits for end users may actually impede agility and long-term value.
The move to managed services
The predominance of legal tech point solutions means GC functions need something further if they’re to meet rising demand. What they require is a mature, enterprise-grade platform that creates overarching business value rather than just solving part of the puzzle. It’s this need that is driving the rising adoption of legal managed services.
Managed services address both aspects of doing more with less. Doing more, by leveraging technology, process and efficient resource management at scale – thereby providing consistently high-quality services, ongoing technology enhancements and leading-edge data management. And doing it with less, through fixed-price, multi-year contracting models, and a greater ability to challenge the value proposition of traditional law firms.
What’s more, while managed services may be quite new in the legal sector, in other areas of the business they’re anything but. From HR to finance to procurement, support functions across the corporate ecosystem have been using managed services for decades. It’s a maturity curve that GC functions are now starting to climb – and one that we believe will redefine the future of in-house legal services. For GC functions, the future has begun.
About the author: Anup Kollanethu is a Partner and Head of Legal Managed Services at EY, with a focus on helping General Counsel clients to drive forward the transformation of their technology and processes as well as advising on their resource management. Following EY’s acquisition of Riverview and Pangea3, Anup works with GCs leveraging existing and mature delivery platforms. Prior to joining EY, Anup was the CEO for Legal Managed Services at an LSE-listed law firm and part of the Executive Team that led the listing. Before that, Anup was the Chief Business Officer at a magic circle firm, where he was responsible for setting up and delivering legal services from the Global Services Centre in Manchester.
Anup is passionate about mental health and the need for effective mentorship in the legal industry.