The four tenets for law department modernization

In-house law departments have grappled with how to evolve into a truly modern law practice. Too many have often focused on implementing new technologies without considering what modernization entails.

In a modern law practice, law departments make holistic business decisions, in an efficient manner, that often lead to actionable outcomes aligned with the company’s objectives. They can get there by figuring out more efficient methods of delivering legal services across the organization that go beyond just the traditional practice of law, and also by reimagining processes, introducing automations, examining ways to cut costs, and helping improve overall user experience along the way.

Law departments have tried to modernize over the years, but many have taken a piecemeal approach to transformation. For instance, starting and stopping with your contract lifecycle management processes may only solve for a narrow segment when your law department is involved with so much else. The key is examining how the entire legal ecosystem operates, including the way the law department interacts with the overall business. For example, consider whether the law department’s outside counsel is efficient and effective, if it’s getting the data it needs from contracts or other activities to help drive better business outcomes, and if the right information and data is appropriately and easily accessible, actionable, secure, and more.

At PwC, we’ve identified four tenets of a modern law practice, all of which law departments should consider if they want to transform.

Tenet #1: Develop a diverse, agile, and collaborative workforce

In a modern law practice, lawyers aren’t just people who practice law, they’re legal integrators who sit at the center of a set of capabilities that exist within an organization. They typically work across multiple divisions, whether it’s finance, human resources, mergers and acquisitions, operational units, sales, or others, and they should have business acumen and cross-functional capabilities that can drive the entire business forward.

To do that, law departments must embrace diversity and collaboration. That means bringing people on with diverse business capabilities and skill sets. When practicing law today, legal teams must figure out how to incorporate finance, technology, processes, optimization, and data into their law department to help their organization solve their biggest challenges. Put another way: businesses aren’t just looking for great lawyers, they're looking for great lawyering. They need diverse and collaborative people who are connected to all parts of the business and can solve and anticipate business challenges rather than simply reacting to problems in a more traditional legal setting.

Tenet #2: Create a practice that’s aligned and scalable to the overall business

While this tenet may seem obvious, law departments often operate in a silo (and in larger organizations, practice team silos within a legal function silo), only jumping in when legal issues arise. A modern law practice, however, is far more aligned to the needs of their business proactively and in real time. That means having a deep understanding of the overall company’s business objectives and goals. It’s knowing how the business makes money, who its primary competitors are, how it values its customers and some of the emerging forward business strategies, among everything else. By having a strong grasp on the entire operation law departments can prioritize what work they must do to add the most value to the business.

Alignment also helps law departments become scalable. For instance, as the business, regulatory and legal landscape evolves, law departments are increasingly working with legal service providers – outside companies that can help with document reviews, investigation support and intellectual property management, for example – to tackle lower-value or unique specialty tasks. Understanding your business goals and objectives means you don’t have to hire new people during peak times. Instead, you can leverage providers that align with not only the work that must get completed but also costs, location and timing needs.

Alignment and scalability can also help law departments pivot quickly when their business changes. With the right partners in place and a strong knowledge of the business, law departments can easily change workflows, including who is working on what tasks, when the company shifts direction.

Tenet #3: Bring data agility to strategic decision-making

The quality and complexity of data available to law departments have improved at an astonishing pace over the last two decades. There was once a time when analytics meant studying how much money the company was spending on outside counsel. Now, law departments are collecting and analyzing all kinds of information, from the effectiveness of internal resources to time spent reviewing contracts to financial data related to deals and everything in between.

What’s missing from this otherwise positive development is a tie-in to broader business data, which could ultimately help law departments, and others in an organization to help make better business decisions. A modern law practice uses data to help develop a more consistent view of what’s happening within their business so they can identify hotspots or anomalies. They can then focus their efforts on those areas of concern. They’re using information as knowledge – having the correct data leads to wisdom, which then results in better decision-making and strategic thinking.

Fortunately, lawyers don’t need to be data scientists. In an integrated and collaborative workforce, they’ll know who they can reach out to get the information they require. They’ll also learn how to use technological tools to help create business-driving insights.

Tenet #4: Become platform driven

The last piece of the modernization puzzle has to do with platform enablement. While that means putting the right legal technologies in place, it’s also about using the business’s entire technology stack to help develop a more holistic view of the broader firm’s data. It’s important to have the right solutions in place, whether it’s contract lifecycle management software or an enterprise legal management solution (ELM), but technology must be used in a way that supports the legal team’s decision-making and drives more stakeholder value. Law departments should pay attention to what information they’re collecting on the back end and create a platform that pulls data and insights from all of an organization’s resources.

In the future, law departments should also need to look beyond their own caseloads for data. Their legal technologies might allow them to collect and view data at an industry level or generate insights that aren’t specific to their operations. The more data you can collect and the more you can learn about how others operate, the better your decision-making can become. Fortunately, legal technology buyers are more sophisticated today and now realize they can’t buy tech in silos. Since many of these solutions touch various parts of an organization, the goal now is to use tech to break down divisions between systems and departments. The legal teams that use all their solutions collectively, and can harness data from everywhere, will add the most value.

Get buy-in and start small

You’ll need buy-in from your company’s stakeholders to pull all of these tenets together. That includes law department leadership but also sign-off from other business partners. Ask those partners about their most pressing needs and explain to them the value the law department brings. Get a yes to transformation and to the four tenets of modernization and you’ll get the budget for execution.

Also consider starting small. Focus on four or five initiatives that will bring you closer to modernization, such as introducing automation. Start with the issues and tasks causing your department pain so the business can feel a sense of gratification when you alleviate that discomfort. Then keep pushing ahead until you reach your modernization goals.

Contact us

Jane Allen

Principal, Legal Business Solutions Leader, PwC US

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