W H I T E PA P E R
Strategy, cost and budget post-Covid
How general counsel and legal ops can do more with less
How general counsel and legal ops can do more with less
www.legadex.com1
The post-Covid corporate legal challenge is three-fold: two existing (stemming from pre-Covid times) and one is new. The first is to build out your strategic partnership with your business. The second, to do this while continuing to handle the same and even larger volumes of work as now. And the third? It is to push ahead with doing both, either on a similar budget or, more realistically, on one that has been reduced. Impossible? In this white paper, we investigate how you can apply operational efficiency, alternative legal services and legal-tech to reach your company´s goals in a post-Covid economy.
How general counsel and legal ops can do more with less
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Covid-19 pushes us to think differently
The reason for this is that legal-tech and ALSPs provide corporate legal departments with the tools to:
Houston, we have a problem For many corporate legal teams, one of the most daunting challenges to emerge from the Covid pandemic is the return of budget cuts. Just when you thought it was safe to invest, expand, reposition and promise more to your internal legal customers, companies worldwide, because of Covid, now find themselves needing to restore their balance sheets urgently. And we know what that usually means – budget cuts.
1. Drive down the cost of volume legal work 2. Maintain their existing service to their internal customers 3. Use the savings (or some of them) to invest in repositioning corporate legal as partners to the business.
A model that right-sizes services to tasks There is a reason why corporate legal departments are open to a different and less traditional approach. They see that new service models meet corporate legal’s growing requirement for flexible legal solutions that right-size, or align, services to tasks,
Often, these cuts are implemented with little or no strategic
performed either in-house or as managed solutions.
considerations. The order goes out to save 10% or 20% or even 50%. Result: strategies get canned, KPIs get tossed, hiring is
Placing routine legal work in the hands of ALSPs using legal-
frozen and headcount becomes an agenda item. It’s no wonder,
tech not only reduces costs and, often, improves quality, too;
but it leaves general counsel and legal ops teams wondering
doing so frees in-house talent to focus on challenging and
what they can save, if anything, from the wreckage of their
complex legal issues and providing advisory support to the
ambitions to build out their partnership with the business.
businesses. In other words, less time spent doing routine volume work, at lower cost and with better quality, results in more
But the problem is not as bad as you may think
time and budget to focus on value-adding strategic work.
The good news is that even in the current climate it is possible to hit all three goals: strategic repositioning, ongoing service
The result is a realistic route forward for ambitious yet under-
and operational budget savings. The answer begins with smart
pressure corporate legal departments that want or need
budget allocation and new ways of thinking and working. In in-
to do more. →
dustry after industry and sector after sector, innovation, ideas, new business models and new technologies are redefining the way things have traditionally been done. Actually, not just redefining the way things have always been done – in many cases, they are ripping them up. The legal industry is no different in this. And Covid could give it the push it needs.
Covid-19 will boost legal-tech and managed services further History lessons: never waste a good crisis Legal-tech has been a growing force in the profession since the early 2010s. But, the real tech revolution revolution is starting just now. Legal-tech innovators and alternative legal service providers (ALSPs) are combining people, processes and technology to transform the legal world.
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The five challenges facing corporate legal
How to argue for investment in corporate legal post-Covid
Get insight into strategy and spending
Six steps to creating and maintaining a rock-solid case
Developments within the corporate legal world since Covid
Developing an answer – a strategy – to meet the challenges
appeared in 2019 mean that many teams now recognise
outlined earlier can prove to be quite a considerable hurdle for
that they need to align their strategy more closely with the
many corporate legal teams. Where do you start? Are you sure
wider business. At the same time, they face having to do
you know where your current spend is going? What is your
more routine volume work in-house, to save on budget.
desired scenario, precisely? How do you build a business case for the new legal role you envision?
Or do they? Is there a third way? In the current circumstances, corporate legal teams need to focus urgently on
The steps below can provide a useful blueprint.
two areas: their own strategy process and strategic choices
Feel free to use it.
and getting clear insight into their current legal spend. In essence, there are five things they need to do: 1. Ask the right questions before attempting to come up 1. Get to know the wider organisation’s rapidly changing goals and be part of the team that is helping to define the strategy to reach those goals. 2. Set strategic departmental goals and translate these
with any answers – ie, know what legal problem exists to solve and what value can legal bring to the table 2. Develop an aligned legal strategy 3. Make choices regarding what, who and how
into operational key results and KPIs for the legal team
4. Analyse current costs and spend
members, so aligning corporate legal targets with
5. Create financial room in your budget
those of the business.
6. Continuously analyse your legal spend.
3. Build a compelling case to invest in legal so it can claim a more advisory role to the business, and make these investments measurable to their business and
1. Ask the right questions before starting
budget approvers.
Obvious, maybe, but this is critical. Before you do anything, you
4. Do the operational maths and investigate how to handle more volume legal work with the same or less budget. 5. Clearly define ‘success’ together with the business.
need to know what you are aiming for and, even more fundamentally, why ‘legal’ even exists in your organisation – what you do or could add to it.
When do you know that you are succesful and how can you show this to your stakeholders (agreed and
2. Develop an aligned legal strategy
measurable goals)?
The process begins with corporate legal assessing their strategy against a PESTLE analysis (Political, Economic, Social, Technological, Legal, Environmental) of the overall business environment in which they operate. The goal is to map your departmental strategy and understand what the businesses are doing and their strategy. Without this, you cannot make the necessary choices later.
“Build a compelling case to invest in legal so it can claim a more advisory role to the business, and make these investments measurable.”
How general counsel and legal ops can do more with less
Strategic options include do-it-yourself or buy decisions, taking venture practice work inhouse rather than paying external law firms, pursuing process optimisation to cut costs and pursuing greater automation. From here, the next step is to identify objectives and key results (OKRs) and KPIs. Securing comparative benchmarks with other organisations can be very helpful when performing strategic analysis and setting goals. →
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6. Continuously analyse your legal spend Ongoing analysis is crucial to maintaining control of budgets – especially when budgets are under pressure. There are plenty of tools and solutions to organise workflow and help you keep on top of your spending. There are a few really good software tools that help you and these tools integrate project management, e-billing and performance analytics, and standardise invoice information and payment process flows to deliver greater insight into and control over budgets.
A new role for legal as C-suite and business advisors 3. Make choices on what, who and how With a legal strategy in place, the goal here is to establish
The arguments and resources to go strategic
departmental focus and set priorities for the next two to three
Following the steps outlined here empowers general counsel
years. Choices include stopping certain activities (with the agree-
and corporate legal to become strategic business partners –
ment of the wider business and CFO, of course), placing routine
even at a time when budgets are under pressure – because the
volume processes in a managed services solution and bringing
steps help legal departments to identify ways to both pay for
advisory services inhouse. Making choices is central to achieving
the necessary investments in advisory services and to make the
savings, maintaining compliance and guaranteeing the same or
case for innovative legal service delivery.
higher quality legal services. Here too, having access to benchmarks can support decision-makers in this process.
The result is a positive investment circle that provides a real opportunity to reposition the legal department as C-level
4. Analyse current costs and spend
advisors and business partners. And the beauty is, the current
This phase involves identifying your current internal and
social, economic, business and financial realities make now an
external costs. Who is spending what, where? Do this using
even better moment to put this model into practice. ◻
cost-calculation tables for different legal roles and functions, and various kinds of volume work, such as legal entity management, contract management and others.
5. Create financial room in your budget: There are five ways to do this. These are:
involves making decisions about the value of particular work,
Would you like to discuss your budgetary and strategic opportunities?
and the most efficient, effective and cost-effective use of in-
For more information, please contact Legadex:
• Shift and redistribute internally and externally. Doing this
house teams, alternative legal service providers and traditional law firms. • Process optimisation based on step-by-step plans, decision
+31(0)20-8208396 info@legadex.com
trees, playbooks and modelling repetitive work. • Enabling self-service solutions with scripts and playbooks that ease the routine burden on corporate legal. • Automation based on the extensive use of legal tech and
Legadex B.V. Antonio Vivaldistraat 64 1083 HP Amsterdam
fixed workflows, and the concept of achieving quality
The Netherlands
assurance by design at the outset, rather than as a control
info@legadex.com
afterwards.
+31 (0) 208208396
• Stopping certain services that have no priority or should be the responsibility of the business thus saving money simply
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by no longer doing things.
How general counsel and legal ops can do more with less
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