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In-house counsel: technology, talent and COVID-19

Image credit: Reuters/Toby Melville

A year ago, COVID-19 had shut down large segments of the global economy, disrupted business operations and supply lines, thrown millions out of work, and sent markets spiralling. Many companies and their in-house counsel were left to grapple with an existential threat to their organisations despite having no way to know how the situation would unfold.

Today, corporate law departments are continuing to respond to the fallout from the pandemic, of course, but they also are looking ahead to new challenges and opportunities.

Take, for example, Dennis Garcia, Assistant General Counsel at Microsoft, who listed his top five areas of focus for 2021 in his blog, In-House Consigliere. The continuing impact of COVID-19, tops his list, but it’s followed by mission-critical operational issues that would likely be top concerns even if the pandemic never happened: cybersecurity, regulatory compliance challenges, reimagining the corporate legal department, and the sustained importance of environmental, social and governance (ESG) issues.

“[I]n-house counsel and their legal teams have demonstrated their ability to be resilient and to change the way they work to serve their clients during one of the most difficult periods that we have ever faced in our society”, Garcia wrote. “I think this coming year provides legal teams with opportunities to hit a ‘reset’ on how their legal department operates and to accelerate their ability to adapt so they can drive greater positive impact for their clients in our ever-changing, technology-and-data-first, post-pandemic world.”

The Thomson Reuters report, 2021 State of Corporate Law Departments (SCLD), details how, for many legal departments, COVID-19 accelerated the pace of change.

“The pandemic year of 2020 stress-tested the current operations of most law departments”, the report notes. “Through unprecedented disruption, crisis management, and immediate shifts to new ways of working, the gaps within departments were revealed. Law department leaders quickly realised that traditional methods of work could evolve and still meet departmental goals.”

“In 2021,” the report concludes, “corporate law departments have a unique opportunity to build a department which is fit for the legal industry’s changing future while meeting the heightened demand that top talent now requires in a workplace”.

Faster tech adoption

In-house teams are turning to technology and process optimisation to meet the challenges of 2021. The SCLD report found that 30 percent of corporate law departments are increasing their spend on technology and 44 percent are focused on making better use of tech tools they already have. The five most common technology solutions that law departments said they don’t currently have but plan to procure are:

  1. document management;
  2. legal business intelligence;
  3. contract artificial intelligence for analysis, risk assessment, or due diligence;
  4. contract management; and
  5. legal workflow automation.

A new report from Gartner reinforces this point, saying in-house lawyers are overcoming their longstanding resistance and risk-aversion to automation. “The new pressures brought about by the coronavirus pandemic certainly have acted as a catalyst for this shift”, said Zack Hutto, Director of Advisory Services at Gartner. “Legal and compliance teams have rarely been frontrunners to modernise, digitalise and automate. The pandemic has flattened staffing budgets and increased legal workloads; technology is the most obvious solution for many legal departments.”

In the report, Garter predicts that by 2025 corporate legal departments will:

  • increase their spend on legal technology threefold;
  • replace 20 percent of generalist lawyers with non-lawyer staff
  • automate 50 percent of legal work related to major corporate transactions;
  • capture only 30 percent of the potential benefit of their contract life cycle management investments; and
  • allocate at least 25 percent of their spend on corporate legal applications to non-specialist tech providers.

Spotting the legal risk in digital transformation

Nayeem Syed, is a technology, media, and telecoms lawyer at London Stock Exchange Group, where he holds the title Senior Director of Technology, Procurement, and IP. In 2021, he is focused on the legal implications of corporate digital disruption.

 “Due to the demand and structural changes following COVID-19, corporations will accelerate workforce and technology transformation”, Syed notes. “We will see corporate technology required to respond to a confluence of accelerated digitalisation trends and client and investor demand for greater focus on ESG factors such as data transparency and climate change.”

As new technology is deployed with increasing rapidity, Syed said, it is essential for corporate lawyers to assess and identify potential legal risk.

“Many industries will see a shift in the demand for their products and services. The resulting process will be ongoing: last year’s blockbuster features may now or soon be redundant, and new functionalities may need to be rapidly released with less time to build effective economic moats”, Syed explains.

“However, a firm’s reputation still depends on the customer experience to be seamless and the underlying systems and delivery platforms to function consistently—they must work, whenever they are needed. In financial services and elsewhere, sales and marketing teams are very aware that back-end systems are an increasingly larger part of the value-added component of price as customers prioritise ease-of-use and reliability in the face of a crisis. Clients will increasingly expect, seek out, and even pay a premium for those who can offer both innovation and higher service assurance.

“We can all observe the general direction of travel, which has powerful direct and indirect structural technology implications”, Syed continues. “Some services, industries and job types have been or will be fundamentally changed forever. Success with technology will be a crucial determinant to both thriving and surviving. The result is that every company is increasing the use of cloud, remote working and outsourcing, and expanding its technology and data management and security functions.

“As firms strengthen these activities, lawyers must be ready to think through and help to manage these risks. Often, so much change is happening simultaneously and not always fully coordinated.  As ever, lawyers must try to understand these issues and still be experts in their core disciplines,” Syed notes.

Vying for talent in as demand grows

Clare Beresford, CEO of global legal recruiting firm Lawrence Simons Search, recalls the uncertainty that occurred as the coronavirus spread around the globe: “Everything stopped and the world paused”, Beresford says. “For six to 12 weeks, everyone was asking, ‘What is this and what should we do?’

By contrast, today, the legal labour market is buoyant, Beresford said. “In the US and the UK, I would say, it’s busier than we’ve seen in many years.”

Corporate legal work, Beresford notes, has accelerated in industries where the pandemic ultimately bolstered firms’ financial fortunes (life sciences, healthcare technology, logistics) and also in sectors decimated by it (airlines, hospitality).

“Litigation has started again in a big way”, Beresford said. “Bankruptcy, restructuring, privacy, big data, M&A, IP, employment, real estate. Every sphere of society has been touched by this—and lawyers are doing the deals.”

Establishing a healthy workplace culture

To keep up with demand and attract and retain talent, Beresford says, corporate legal departments need to navigate the changing world of legal work:

  • Remote work has benefits and drawbacks for employees and the company—so it’s important to transition to a post-pandemic workplace that seizes the opportunities, minimises the drawbacks, and accommodates individual needs and values.
  • To retain women lawyers and staffers, law departments need policies that acknowledge and ameliorate an equity issue escalated and exacerbated by the pandemic: the undue burden on women struggling to balance work with child care and other family responsibilities.
  • Remote work also can be detrimental for Diversity, Equity, and Inclusion (DEI) initiatives, Beresford notes. Again, law departments should assess the impact and ensure DEI efforts don’t lose momentum.

The pandemic caused or heightened personal and professional pressures on legal teams, and companies need to address the subsequent mental health implications. Beresford has seen law departments make a concerted effort to reduce work demands, provide flexible schedules, and create “buddy systems” and other forms of support.

Beresford also recommends In-house leaders assess whether the remote work environment has adversely affected training and mentoring for junior lawyers—and address gaps.

In the end, providing a culture that attracts, retains, and rewards top talent is essential for corporate legal departments managing increased demands and ceaseless change. “It’s important to ensure we are allowing the best talent to shine,” Beresford says, “and allowing people the make choices about their career path and trajectory”.

Download your copy of the 2021 State of the Corporate Law Departments report.

 

In-house agenda: June 2021 Leveraging the legal operations of tomorrow: 2021 CLOC Global Institute How legal departments are responding to ESG challenges In-house agenda: May 2021 No budget? No problem for the in-house lawyer using technology to manage rising workloads—new report In-house agenda: April 2021 Legal Geek—Lessons from COVID-19 and human nature The impact of COVID-19 on managing your legal department—a new report New report: In-house legal departments see pandemic as a catalyst for accelerating change Outcome: Spring 2021 Budget—Practical Law’s summary