Obelisk Support CEO, Dana Denis-Smith, recently shared her thoughts about emerging trends in in-house legal teams in conversation with Helen Hart.
In-house lawyers face challenges in terms of doing more with less, but without sacrificing quality. In addition, there are various other issues that are affecting in-house teams, such as advances in technology/artificial intelligence, the deregulation of legal services and initiatives around diversity, work-life balance/flexible working and mental health. There is also the argument that lawyers are being seen less as pure legal advisers and more as business partners. And there are macro challenges such as political changes and the state of the economy. How are these actually playing out in Dana’s experience of talking to and working with in-house lawyers?
Q. So Dana, what are the main trends for in-house legal teams at the moment?
One key trend is not changing – and that is the pressure of costs. Cost is a bubbling undercurrent to, and dominates, everything. Legal teams do not always have control of their budgets which gives them less control overall.
The growth of in-house legal teams has been significant, lawyers are being asked to do more and more work. However, I think that that growth trend is now reversing and the number of in-house lawyers has stagnated because it is difficult to manage people and their aspirations. There are only so many levels that you can add to provide opportunity. And we come back to added cost. It was supposed to be cheaper to have in-house legal teams – you have everyday skills in-house and only call on law firms for very specialist advice, but managing people’s aspirations for the future and their progress adds costs. In-house legal teams seek more junior lawyers because they are cheaper but then they find themselves poaching them from law firms.
Legal teams can find themselves overwhelmed by the choice provided by suppliers. The legal services market is so fragmented right now. This is probably a good thing in providing more options, but less can be more, and options can be confusing. Making decisions about the right solutions is increasingly difficult so in-house lawyers end up going back to using normal law firms. Recently, DWF announced that they had won a tender from BT to deliver its insurance and real estate work for five years and some of BT’s staff will transfer to DWF. There is a lot of legal work to do, but business growth (and therefore cash) often isn’t there to support that legal work – and there is no silver bullet, even though everyone is looking for one.
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Q. What trends are you seeing in use of technology?
In terms of legal technology, it is easier when lawyers are in charge of their own budgets and can make their own decisions, but there are not many end-to-end solutions. Legal teams would like to automate more legal processes, and have more legal tools, but their technological solutions need to fit in with the rest of the company’s systems. Legal is not a core activity, so it often does not happen and we come back to cost. Although off-the-shelf tools exist, they do not always work for all companies. Legal teams would like to be able to automate contracts and customise tools, but it takes time and money to set those systems up. Sometimes legal teams use secondees to carry out such projects, but they are considered to be a luxury item, and if there is no budget, there will be no new IT system.
Q. What trends have you seen in terms of knowledge management?
Most legal teams rely on LexisNexis or Thomson Reuters – or their external law firms. However, I’ve not seen much in the way of knowledge integration or knowledge sharing, which means that there is room for improvement in terms of lawyers sharing their knowledge and creating extra business value.
Q. Is your experience that the silos in legal teams are falling away?
They still operate in competitive silos and need to think differently. Larger teams still tend to split into practice areas like law firms and so an employment lawyer may not have much contact with a commercial lawyer. However, it does depend on the overall culture of the business as well – some companies are more fluid. Start-ups tend to manage their legal teams differently to the larger companies, but even they may still face challenges in avoidance of lawyers and the idea that lawyers are a cost that needs to be reduced.
Q. How are in-house lawyers dealing with the topic of work-life balance?
A lot is expected of in-house lawyers so work-life balance may be adversely affected There can be a feeling of “we hired you to avoid paying law firms £400 per hour” – some get called when they are on holiday and are definitely overworked. Some in-house legal teams have initiatives around mindfulness and sustainability, but there is often an inconsistency between language and behaviour.
Q. What are the key substantive legal topics that in-house teams are grappling with at the moment?
GDPR and cybersecurity are the big ones. I think there is sometimes a disconnect in the way legal issues are presented to the business. The company wants in-house lawyers to keep legal problems away but sometimes the lawyers make everything too “legal” and don’t translate legal risk properly. I would say that an exception to this I’ve encountered recently at one of our clients is where their General Counsel was previously a litigator, and I think litigators are under-rated in the way they can see further in terms of legal risk and translate it for their internal clients.
Q. How do in-house lawyers drive change in law firm behaviour?
In-house lawyers try to change law firms in terms of asking them how they deal with diversity etc. Perhaps they should consider more direct ways of influencing law firms, for example, simply change their buying patterns – if you see market-leading behaviour from a firm or firms buy from them and effect change that way, in the same way that consumers buy products or services from companies who they feel align with their values.