The prevalent perception about legal departments within enterprises is not too removed from what we think about Sauron and his army of darkness! According to Bain, while 40% of Chief Legal Officers (CLOs) gave their teams top marks for contributing to the business, but only 14% of the CEOs express similar sentiments!
Key Drivers for Legal Teams
Here are some key challenges that legal teams are facing in the enterprise:
1. There is an increased regulatory oversight and investigation in industries such as financial services, pharmaceuticals and healthcare. According to the Department of Justice, pharma companies paid about $13 Billion Dollars in fines between 2009 to 2013.
2. Social Media and collaboration tools are becoming more common among enterprises and employees are demanding access to content outside the enterprise on mobile devices. Privacy, data protection and liability issues are driving increased workload for legal departments.
3. According to a survey conducted by Sandpiper Partners LLC, in order to keep costs down, firms reduced their workforce, increased their use of technology, and improved their processes. About one in 10 firms are looking at across-the-board reduction of staff support for attorneys in research, practice assistance, paralegals, and other functions. The biggest reductions will occur in litigation support (30%) and conflicts (29%) and procedures.
Bain has summarized how different enablers should come together to help legal departments cope with these changes in their report titled, “A Higher Bar“. Here is a snapshot from this report:
Impact on Training
1. Clear Metrics that support the Role: One of the key challenges that continues to evade a solution is the need to drive training programs based on performance metrics. According to Bain, some of the metrics legal departments should consider focusing on includes:
- For frequent acquirers: Metrics might focus on how repeatable and streamlined the diligence process
is. Does legal provide effective toolkit to streamline diligence, for example? And does legal make potential deals easier for the board to review with presentation templates?
- For companies operating in highly regulated industries: Metrics might include the ability to influence
favorable legislation or time required to obtain regulatory approvals or certifications.
- For companies with a heavy compliance focus: Metrics might include training sessions completed, reductions in fines and violations, and qualitative assessments of how well compliance requirements are understood and followed across the organization.
- For companies with a robust litigation pipeline: Metrics might include win rates, cycle time between opening and closing a case, and the cost of litigation—including not only settlements but also outside legal fees.
Training departments should re-calibrate their training strategies to leverage relevant business metrics driving the legal function. A thorough audit of training content portfolio has to be done at least once a year to modify, trim the curriculum and align closely with the changing role of the legal function.
2. Imparting the Right Skills: Aligning legal team capabilities with business metrics is the biggest training challenge. This challenge requires a granular understanding of what the business metrics will mean in terms of existing capabilities and missing skills / competence. Bain recommends infusing the team with operations, finance and IT skills in addition to strengthening legal expertise / skills relevant for the business. The use of sophistical e-discovery and analysis tools for legal cases also increases the need for training legal departments in properly using these tools.
I believe the biggest challenge in this regard is identifying training interventions commensurate with the metrics. For an enterprise to meet the goals based on well defined metrics, the training department has to first draw up the immediate set of actions needed to be performed by different roles in the legal function that will contribute to the achievement of these goals. Here is one example: For meeting litigation cost benchmarks, training can impact the time needed to complete certain tasks associated with the litigation. The real challenge here is to see how the training is rolled out (defining control groups, measuring training impact, identifying extraneous factors) and expanded to the rest of the department.