On 28 January 2020 Apperio hosted a corporate counsel roundtable discussion at the Law Society. We were joined by representatives from the banking, energy and legal sectors to discuss a variety of issues affecting corporate counsel. We examined a wide range of topics, from how the board influences their legal spend decisions to the challenges of finding the right tech solution and then collaborating to make it work.
Across our representatives’ industries, regulation and compliance are the key concern taking up much of their day-to-day activities. Compliance considerations ranged from supply-chain data protection and cyber-security, to global regulation, to the always lingering concerns around Brexit and political rumours of regulatory “dislocation”. How they managed those external risks while finding the right internal balance made for an interesting debate.
Here is what our panel talked about...
The rising status of GCs
For in-house teams, the work isn’t about the law, it is about risk management, recognising opportunities and making business decisions. Lawyers are trained to be analytical and make evidence-based decisions, and the in-house team is essential in a commercial environment because it is the part of the business that counter-balances the “gut”. They deliver value-add by considering the consequences of actions.
The historical misconception that “in-house was the graveyard for lawyers” has changed. In-house roles are rewarding and well paid. Those who moved in-house have experienced a high variety of work with the “most extraordinary” people. They have “exhilarating experiences” where problems occur and they have to think fast to analyse and resolve them.
Tech solutions, and problems
As part of client outreach activities, law firms are increasingly giving their clients’ technology demonstrations and asking to influence their infrastructure. Conversely, because law firm clients are focused on outcomes and revenue generation, they are prepared to investigate how specialist external providers can layer services and integrate to provide the solution they need and want.
Collaboration and change management are identified as the hardest parts of tech adoption. Firms can invest in single-point solutions, only to discover that when collaboration is required companies face difficulties in integrating with their partners’ systems.
When trying to implement a tech solution, 50% of the effort is change management. Essentially, no matter how good the product, it doesn’t always change practice. But, in-house teams are incentivised to change because they need to deliver demonstrable value to their businesses. Such behavioural change for law firms can be much more difficult to achieve.
Managing cost pressure
In-house legal teams are under pressure to diversify their panel arrangements to mitigate the “extortionate” cost of external legal advice and ensure they get value for money. “Internalising” advice was the preferred route to reducing costs, as was a desire to only use external firms when increased specialism is necessary. However, when specialism and individual expertise is required, in-house teams are prepared to pay more, but it must have value and longevity.
Second or third-tier law firms are recognised as delivering excellent quality advice at a lower price point. But, despite pressure to reduce costs, internal business behaviours result in “panic buying” as the board turns away from the legal teams’ efficiency recommendations and reverts to using Magic Circle firms. Despite legal teams often having a workable solution, companies can use expensive law firms as an insurance mechanism – they know the name and trust the advice, even when a more efficient solution could be available.
Doing more with less
On what would make their lives better, in-house teams unsurprisingly want additional time and resources so they can achieve more. In-house teams want “seamless, dream technology” which solves their issues, reduces admin and increases collaboration not only within their businesses but also with their law firms.
High-quality, user-friendly cloud-based technology should help in-house teams achieve all of this and allow them to “do more with less”. Relying on old, outdated solutions to counter the problems faced today can’t deliver positive outcomes. So, perhaps it is time to use the commercial, analytical focus of in-house teams to demand more from their technology, increase their capabilities and drive additional value in their companies.