Posted on December 13, 2016
5 Ways to Run a Legal Department Like a Startup
In-house legal departments aren’t often considered the most dynamic or innovative parts of companies.
Inside Counsel recognize the stereotype,
We’re all familiar with the pervasive stereotypes that have dogged corporate legal departments over the past few decades—an impediment to closing deals, a center of obstinacy, a bottleneck, the “department of no.”
Corporate legal departments are often seen as only a cost center that performs necessary – but unexciting – administrative functions: processing legal paperwork and mitigating risk.
When senior management pays any attention to the legal department, it’s commonly for the purpose of cost-cutting – reducing headcount and outside counsel costs, forcing legal to get the same amount of (or more) work done with fewer resources.
Fortunately, there’s an alternative.
You can run your in-house legal department like a business. Not just any old business, but a creative, energetic, startup-style business.
Where can you start? Here are five ideas for how to build your legal department like a startup, and reap the rewards.
1. Know Your Clients
According to Forbes, “Knowing Your Customer” is one of the characteristics of wildly successful startups:
Successful entrepreneurs know the needs of their customers. They know everything about them. They know what they want, when, where and at what price.
Many in-house lawyers never see – or even talk to – their internal customer or stakeholder. Work comes in via email or a workflow management system, its “processed” by attorneys, and then sent back to the stakeholder the same way.
Although talking less to ‘needy stakeholders’ may sound like a good idea, it’s not how individuals, departments and business succeed. Lawyers who approach tasks and issues in an academic, abstract fashion, miss out on really understanding their stakeholders’ needs and business concerns, and therefore can never deliver what is truly valued.
If the members of your legal department don’t already have regular face-to-face meetings with their internal stakeholders, it’s probably about time that they did. Such a meeting can focus on the what/when/where/how much questions noted below.
- WHAT do clients want? What types of services are most important to them? What knowledge are they lacking? What do they want to be empowered to do on their own?
- WHEN do clients need a response? When does the contract need to be signed? (For example, is it important for a deal to be closed before the end of a month, quarter, or year?)
- WHERE are the clients and where are the lawyers? Would it be helpful to “embed” a lawyer in the marketing or sales department, for example?
- HOW MUCH should the company be spending for different types of legal services? Can low-risk, routine tasks (for example, reviewing NDAs and Insertion Orders) be automated or outsourced?
2. Define and Pursue “Success”
In many in-house legal departments, just getting through the day’s workload can feel like an achievement.
But it’s more energizing to pursue specific goals – to pursue “success.”
What does “success” mean to your department and to others in your company?
The Association of Corporate Counsel explains,
To achieve success, a legal department first must determine who their stakeholders are, i.e. who determines success?
The CFO, CEO or Board of Directors may all be stakeholders in the success of your legal department. In the past, these stakeholders may have been interested only in the successful-outcome rate of matters, large matters whose costs had skyrocketed or the status of a bet-the-company case.
Increasingly, however, your legal department may be asked to measure success not only by those standards, but also by traditional business metrics, such as:
- What is the total spend this year compared to last, and if it’s more, then why?
- Are you above or below the department’s projected budget?
- How is the department reducing costs and increasing efficiency?
- What legal trends are you seeing in our legal work and how should we respond?
Once it’s understood how success is being measured by stakeholders, then the legal department can go about tracking those metrics.
3. Measure Progress
Metrics must be easy to measure because once they’re set, progress actually needs be measured!
Startups make this process easier by limiting their focus to 3 – 5 core metrics – the ones that really make a difference to the department and to the business.
For example, a legal department can track how long it takes to turn around different types of legal agreements, from in-box to out-box to signature. This metric measures the impact legal has on other departments (affecting the speed deals are closed and therefore the revenue brought in), as well as the efficiency and cost savings within the legal department.
Another method startups employ which corporate businesses often forget about is to get employees involved in setting the metrics. Letting employees contribute at this early stage gives employees a sense of ownership and responsibility, both of which are integral to success.
When setting metrics, also remember to add realistic goals. Other departments may have high expectations, for example, wanting to reduce contract turnaround time to one day. Before deciding whether goals are realistic – or automatically saying “no” – consider how people, process and technology can aid in achieving these goals.
For example, LawGeex customers have found that using the LawGeex A.I. tool saved them 80% on time reviewing and approving contracts. As you can see, big goals can be realistic!
4. Use Cutting-Edge Technology
Lawyers are notorious Luddites, resisting technology long after it’s been adopted elsewhere. But start-ups LOVE the latest tech, and if your law department’s going to be run like a startup, you can’t be afraid to be cutting-edge.
Predictions for 2017 from Disrupt Legal blog include:
- More AI and Better AI
- More Tech-Savvy Lawyers
That future is already here for some companies. As discussed in the Field Notes blog, Google runs a “data-driven, automated legal department of the future.”
Google has one of the world’s largest and most active internal legal departments with about 1,000 people, dispersed across the planet. Daily they have to deal with everything from requests for confidential information to patent applications, complex tax structures to the regulatory implications of cutting edge technologies.
Google’s legal operations team
uses self-service tools based on decision trees to help internal clients get the answers that they need. These tools either remove the need for a lawyer, or facilitate the collection of all the necessary data that a lawyer needs to help the client in a much faster way.
also uses contract analytics and machine learning to pull out metadata and clauses from contracts that would otherwise require a lot of reading.
Mary O’Carroll, Head of Legal Operations at Google, says “lawyers are knowledge workers”:
They want to work, and their clients want them to work, on interesting, high value activities, rather than re-creating the wheel.
She encourages her legal partners to design smarter knowledge management and collaboration systems and to automate routine activities.
5. Be Inspired and Inspire Others
A startup often stands out from corporate businesses because of the passion of its founders and employees. Successful founders by nature are entrepreneurial and are often able to take their passion, their ideas and their inspiration, and maximize it by inspiring their team.
The biggest lesson for running your law department like a startup is being inspired and inspiring others.
Creating a positive work environment where staff are encouraged to voice new ideas, to increase their knowledge through industry events, and work effectively together is essential to a flourishing business. Be the department that employees love working in!
Startup culture is famous for building this through various ‘non-essential’ activities such as company sponsored lunches, having ping pong tables for employees to release some energy, and conducting yoga classes to help manage workplace stress.
LawGeex employs all of these strategies to create a positive collaborative culture, and it works! Time bonding with coworkers is not wasted time; it encourages greater concentration, collaboration and innovation.
At the end of the day, whether working for a startup or large corporate, we’re not robots. Even LawGeex, an innovation-driven technology company, knows that our biggest asset is our people. Technology is here just to assist and help us succeed better together.