In-house legal teams are dealing with elevated pressures on multiple fronts. Not only are they increasingly expected to prove their value to the wider business beyond simply offering expert legal advice, but they are having to do so in a rapidly changing business environment. From the economic impacts of the Covid-19 pandemic to an ever-intensifying regulatory backdrop, in-house teams must help their organisations navigate these challenges, often with fewer internal resources.

“It’s probably easier to list the issues that we’re not facing,” says Andrew Garard, group general counsel and corporate affairs director at British aerospace company Meggitt. “Everything from rising costs to a rapidly evolving political and regulatory environment with daily changing of trade sanctions, overlaid against the outlook for legal departments that they must be able to do more with less.”

That rapidly evolving regulatory environment is impacting in-house teams regardless of the industry they are working in, mostly due to the deluge of new data and privacy laws.

“A key privacy regulation is of course GDPR, which although it has been in place for a few years now, still requires a large amount of effort to ensure compliance,” says Kerry Phillip, legal director at Vodafone. “As a global telecoms business, we operate in a heavily regulated industry anyway, and now, following Brexit, we have additional potential hurdles with the possibility of being treated as a third country for European regulations. Keeping across everything is demanding more and more resource.”

In addition to regulatory compliance, in-house teams are also having to handle an increased load of corporate governance work, particularly for certain businesses. Take the travel industry, for instance.

“Every single regulator wants to ensure that you have written down processes and procedures in place for everything from a guest going on an excursion to making a cup of tea,” says Michael Ellis, group general counsel at luxury travel company Abercrombie & Kent. “Then you have things like data protection, anti-bribery and corruption, modern slavery – the volume of corporate governance work is one of the biggest stresses, it just takes up an enormous amount of time.”

The broader trend of digital transformation and the disruption of entire industries is also adding an extra layer of complexity for some in-house teams to deal with. “There’s a general need to move even more quickly than ever before, because you’ve got challenger business models coming in, particularly in the banking and consumer industry sectors, which are disaggregating traditional ways of working,” says Andrew Giverin, a NewLaw partner at PwC. “Therefore there’s more pressure on legal departments to keep up with the pace of change.”

Another challenge that all in-house teams are facing is the war for talent, particularly in a post-Covid environment where expectations of working life have changed. “There is a problem brewing for in-house teams generally as city law firms increase pay for newly qualified lawyers to salaries beyond what in-house lawyers with decades of experience will receive,” says Phillip.

Phillip says it used to be relatively easy for in-house teams like Vodafone to attract lawyers because of the brand and the work on offer, as well as a level of flexibility and work-life balance that law firms couldn’t match. Now, law firms are also offering flexible working, while the work-life balance gains are getting trickier to maintain given the volume of work in-house teams are expected to handle, she says.

For now, that hasn’t resulted in staff attrition. One advantage: in-house teams can still be more flexible than law firms, which need to maintain some form of office presence given the need to train juniors. 

“We generally recruit people who already have some experience, so although we support continued development, the need to be supervised and to learn at a more senior colleague’s side is less important,” says Phillip. “I put a lot of effort into keeping the culture, the identity and the team spirit intact, and then remote working can be effective. That’s still attractive to a lot of people, who can then live where they want to live.”

Solving these challenges is not easy, but legal technology can help. For instance, attracting the next generation of talent may be easier if legal departments are using modern tech.

“They want to be using consumer-grade tech – they don't want to be coming into the workplace and having to deal with clumsy technology,” says Giverin. “So, if legal departments are not investing in those tools, not only is it slowing down business outcomes, it’s also reinforcing behaviours which are not as attractive to the incoming workforce as organisations that are tech-enabled.”

Legal tech can also help in-house teams better allocate resources by automating repeatable tasks and allowing lawyers to refocus on areas that need more headcount.

“What I’ve been doing over the last few years is automating repeatable areas such as standard contracting so that I can properly resource compliance and regulatory teams,” says Phillip. “The precious and scarce resource of a corporate legal team should be working on matters that add value to a business, and to achieve that you need to automate the repeatable and standard work that can clog up a legal team.”

The precious and scarce resource of a corporate legal team should be working on matters that add value to a business

The time saved on manual tasks also means legal teams have more bandwidth to work on strategic matters. “I’m able to look at the risks more and work on projects that we didn’t have the time for previously,” says Ellis. “In the past, we were fighting fires all the time, now we’re able to be much more proactive.”

There is so much legal technology available today that it can be daunting for in-house teams to know where to start when it comes to digitising their operations. Here is a rundown of four key areas where legal departments should be considering tech investment:

1. AI and automation 

Artificial intelligence and automation are helping to streamline processes and reduce manual tasks so that lawyers can focus on higher-value work. There are several ways automation and machine learning tools are being adopted by in-house teams. 

One example is with document review, says Andrew Giverin, NewLaw partner at PwC. “You can get machine learning algorithms that can train on particular blocks of data and then analyse recurring risk within similar legal documents, including patterns of risk that are driven by regulatory issues,” he says. That means organisations can react quickly to regulatory changes and, over time, build up intelligence that can help in-house teams forecast and foresee trends in the market, Giverin says. 

Workflow tools that automate the way in-house teams operate are becoming more important, particularly those that bring together multiple applications into one platform. “Traditionally, lawyers have had to swivel their chairs around lots of different applications,” he says. “Having them in one location just increases the overall speed with which lawyers can operate.” AI and automation are also helping with demand management, such as the use of legal chatbots, which helps to reduce the volume of questions or requests coming into an in-house team that don’t necessarily need to be fielded by a lawyer.

2. Legal analytics

Corporate legal departments are increasingly adopting legal analytics tools for a variety of reasons – from managing external legal spend to ensuring work is being effectively resourced. 

Some 56% of corporate legal departments now use legal analytics or metrics to learn more about how they are functioning, according to the Corporate Legal Operations Consortium’s 2021 State of the Industry Report. Often this data is being processed by the legal operations function, who ensure in-house teams are running as smoothly as possible. “It would be the exception rather than the norm for any FTSE100 company not to have a dedicated legal ops person,” says Giverin. “The reason for that is general counsels are now being asked to demonstrate rather than assert the cost and the value that their function brings to the business.” 

By adopting legal analytics tools, in-house teams can generate meaningful insights from their operational data that can show their value to the business. Other ways in-house teams can apply legal analytics is to support the litigation process, for instance by mining data from previous cases to inform strategy or weigh the likelihood of success.

3. Cloud-based e-discovery

In-house counsel ranked e-discovery tech as the most important tool for the defensibility of their organisations in these more uncertain times, according to the Association of Corporate Counsel's (ACC) 2021 Legal Technology Report. 

E-discovery technology can give in-house teams greater control of how they manage their data for investigations or legal holds without having to rely on outsourced providers, which can be clunky, expensive and risky. By keeping the process in-house, corporate legal departments can get a better handle on costs while also having far greater control over the process, reducing the risk of missing deadlines – a potential issue when relying on third parties. Keeping the process in-house also improves data security as there is no need to physically send hard drives of data to external vendors.

4. Cybersecurity and data privacy

With cyber threats on the rise and stricter data privacy rules coming into effect around the world, it is little surprise that chief legal officers are ramping up their focus on cybersecurity and data privacy. Both areas (along with regulation and compliance) made up the top three issues that legal heads believe are most critical for their businesses, according to the ACC’s 2022 Chief Legal Officers Survey. 

Tackling cyber issues requires collaboration between CLOs and IT teams, says Susanna McDonald, chief legal officer at the ACC. “You need technology to find the weak points within your systems, you need technologies that are constantly monitoring your systems and then alerting you when you are being attacked,” she says. In-house teams also need to be able to get a better handle of where all their data is sitting, particularly if they use a multitude of different tech vendors, says McDonald. “You need to be able to have a good visual into that,” she says.

Corporate legal teams have seen their workloads increase massively in recent years beyond purely offering legal advice to managing risk more broadly and being trusted advisors to the wider business. At the same time, rising cost pressures have forced legal departments to reduce external legal spend and handle more tasks in-house. One of those areas includes e-discovery, which many in-house teams have traditionally outsourced – a process which is costly, slow and potentially risky when it comes to sending sensitive data to third parties.

“Pulling that data out and putting it onto a hard drive and then FedEx’ing it to a vendor is a risk,” says Andy Shelford, UK director of customer experience at Everlaw. “In the past, I’ve physically had to carry a hard drive in my bag to someone’s office and hand it over just to create that additional layer of defensibility that it hasn’t gone through somebody else’s hands.

Using an in-house e-discovery platform, by contrast, can significantly reduce the risk of data leakage, improving overall security. “It means you know where the data is and there is only one version of it, there is no risk of anyone copying the data,” says Nicole Hazaz, manager, UK customer success at Everlaw.

It means you know where the data is and there is only one version of it, there is no risk of anyone copying the data

Another benefit of using an in-house e-discovery platform is that it enables legal departments to better control and improve the predictability of their costs. In addition, this greater control means in-house teams will have more visibility into the work being done on a specific matter, making it easier to cut unnecessary tasks – something that can cause costs to balloon when matters are outsourced, says Hazaz.

In-house platforms can also improve the effectiveness of the legal department by speeding up the process and making it repeatable, scalable and auditable. “All of this leads to exceeding expectations along the way because what used to take a variable amount of time, anywhere from two-to-five days or three-to-six weeks, can now be done immediately,” says Hazaz.

Moving faster is important because it enables teams to get a grasp on the scope of the project sooner without having to wait for tech admins to transfer and process data. Knowing the scope sooner also means in-house teams can respond to the business more quickly and get answers back to the court or regulators at a faster clip.

Opting for a cloud-based software-as-a-service (SaaS) platform is also more beneficial than on-premise technology given that it can enable users to access it anywhere – something that is essential in a post-Covid hybrid working environment.

Cloud-based tech also enables organisations to scale up and down their capacity as needed. While most in-house teams won’t manage large e-discovery reviews in-house (unless they have very strict data controls), having a scalable platform is a benefit to their partners, whether law firms or managed service providers. In the past, an organisation may have needed to acquire more server space from a vendor or purchase their own additional server units which they are then stuck with when the work scales back down, says Hazaz.

Cloud tech can also improve cybersecurity. With on-prem technology, organisations are responsible for their own cybersecurity defences, which means they are potentially vulnerable if their security is not continuously maintained and monitored – potentially a challenge if IT staff are also required to monitor other systems. By contrast, cloud-based tech providers only need to focus on their platform, ensuring cyber defences are always up-to-date. Likewise, cloud-based tech will always ensure the latest version of the software is downloaded without any need for internal maintenance or server downtime.

For organisations considering an in-house e-discovery platform, there are a number of factors to weigh. To start with, what is their current setup? Are they outsourcing everything or do they use a patchwork of existing in-house technology? If the latter, using a single platform that manages the entire e-discovery process may be a better option.

“What we can offer is an end-to-end product that does everything in one place rather than having a Frankenstein-style approach of having five different tools to achieve the same results,” says Shelford. “That makes the experience more convenient and also improves operational efficiency.”

Organisations also need to think about what it is they are trying to solve – not just now but over a longer time horizon. “Whilst it may not necessarily be immediately cost effective, due to the people and time investment, the overall effect or value of bringing this technology in the short term could significantly outweigh that initial upfront investment,” says Shelford.

They also need to think about how they will operate the technology. With a cloud-based platform like Everlaw, organisations need at least one person to manage the platform, establish best practice and set up templates to make the process repeatable. That wouldn’t necessarily need to be a lawyer in the in-house legal department, oftentimes it will be somebody who sits in an organisation’s innovation or technology team, says Hazaz.

That doesn’t mean it is only suitable for larger organisations; cloud-based e-discovery platforms are viable for in-house teams of any size. “Even if it is only 100 documents it’s still a better process than manually going through someone’s inbox and trying to make notes in an Excel spreadsheet and trying to marry that together later on,” Hazaz says.

Ultimately, using an in-house platform simplifies the e-discovery process, allowing in-house teams to start working on matters immediately. “You push a few buttons in the platform and the data is uploaded – all the metadata is extracted, it’s all indexed, and you now instantly have access to it,” says Shelford.

Find out more about how Everlaw’s cloud-based e-discovery software can support your business

As the demands on in-house legal teams increase, the skills needed to successfully run a modern legal department are changing. For chief legal officers and general counsel, mastery of the law is no longer enough.

“To be a successful general counsel today, you’ve got to be the all-round advisor to the executive team and the board, not just on legal issues but all situations,” says Andrew Garard, group general counsel and corporate affairs director at Meggitt. “Legal teams were really created originally to manage the cost of legal services to the company – if you could take 10% off the law firm’s bill, you’d done a good job. Now, you have to add a huge amount of value over and above managing legal spend appropriately and managing the legal team – a general counsel must be capable of managing a much broader remit.”

According to the Association of Corporate Counsel’s (ACC) 2022 Chief Legal Officers Survey, 80% of CLOs now oversee compliance, roughly half oversee ethics and privacy, and 40% handle business risk.

Garard, for instance, not only heads up the company’s legal department, but he also has responsibility for the teams overseeing government relations, trade compliance, commercial and customer account management, on top of ethics and general compliance.

This growing register of responsibilities means general counsels need to start thinking outside their ‘swim lane’ of legal risk, says Andrew Giverin, NewPartner at PwC. “General counsels are having to pivot to becoming more holistic in their viewpoint,” he says. “Legal teams are no longer just expected to act as primary risk guardians or strategic connectors for the business, they’ve also got to help their businesses grow and adapt in a responsible and purposeful way.”

That means law firm leaders need to adopt a growth mindset that considers the wider impact of their decisions – not just for the business, but for customers and society more broadly, says Giverin. “The lawyers of the future that are going to be really successful are the ones that are purpose-led,” he says.

The lawyers of the future that are going to be really successful are the ones that are purpose-led

The skillsets needed to work in a modern in-house department have therefore changed massively, according to Kerry Phillip, legal director at Vodafone. “You still need to be a good lawyer, but on top of that you need to understand data and how to analyse it,” she says. “It doesn’t hurt to be a good project manager either, as we run or support so many projects. And what were traditionally called soft skills – are you proactive, are you resilient, can you influence effectively, do you collaborate well – these are fundamental now as in-house teams work in a much more hybrid way.”

These broadening skillsets mean in-house teams are also increasingly relying on allied professionals – those with non-legal specialisms – to support the legal department. “My legal team is made up of lawyers, data specialists, risk and compliance managers, regulatory professionals, project managers and a knowledge manager,” says Phillip. “Being able to call on a range of skills according to the business need is important for efficiency.”

Allied professionals can also bring a different perspective to in-house teams, improving diversity of thought and ensuring decision-making is more rounded. “I always run teams where I don’t just have lawyers in my senior team,” says Garard. “Non-lawyers are a remarkable source of wisdom and information about how the overall process can be much smoother. We all know that managing lawyers can be like herding cats, so having a non-lawyer in the room is often a grounding factor for people who may take themselves a bit too seriously.”

In addition to project managers and data specialists, some in-house teams are also hiring allied professionals as workflow consultants, legal technologists and strategists. “You need a community of problem solvers to fix business outcomes and that is about assembling the right blend of skill sets to be able to solve problems,” says Giverin. “It’s that mix of skillsets that really enables you to identify the gaps and the capabilities and the cost savings and the opportunities that sit within in-house legal departments.”

In-house teams are also increasingly focusing on how their departments operate. As many as 60% of in-house teams now have at least one dedicated legal operations professional in their departments—three times higher than in 2015, according to the ACC.

“One of the strategic initiatives that law departments are focusing on is legal operations, so if law departments don’t already have some legal operations, they are definitely seeing that as a strategic initiative in order to create better outcomes with the resources they have,” says Susanna McDonald, chief legal officer at the ACC.

By using data, legal ops teams can help streamline processes and optimise workflows so that legal departments are operating as efficiently as possible. “You can only run an in-house team effectively now if you have operational data,” says Phillip.