Reinvention of the in-house lawyer
Roula Khalaf, Editor of the FT, selects her favourite stories in this weekly newsletter.
The role of in-house counsel is changing profoundly, as businesses increasingly rely on their legal teams to help deal with complex regulation and rising risks.
General counsel at some of the world’s largest companies say they face ever greater pressure to achieve more, and at a faster pace.
Many legal departments do still operate in an antiquated way, relying on paper processes. Yet demand is increasing for in-house lawyers who understand how to use technology to provide companies with better legal strategies and services. Enter the digital GC.
Being a digitally proficient in-house lawyer is about understanding how data can be used to service the business, says Mary Shen O’Carroll, director of legal operations, technology and strategy at Google, based in San Francisco. Keeping up with the latest tech tools is important, but less so.
“Technology is a critical piece, but that’s because data is everything,” says O’Carroll, who is also president of the Corporate Legal Operations Consortium, a network of experts in legal operations.
Data is the foundation
O’Carroll says data is the answer to every question she is asked these days, especially by the leaders of other in-house legal teams: “How do I best run the department? With data. What tech should I put in? It depends what data you need. Should I hire a legal operations person? Yes, to help you gather and interpret the data.”
For O’Carroll, data is the foundation for modernising the legal profession as other industries have started doing.
“By structuring, gathering, and analysing your legal data — like commercial contracts, for instance — in-house lawyers can work with other decision makers in their organisation to build a clear picture about where they should invest their time and energy,” she says.
For in-house lawyers and compliance managers, the focus is now on enabling “good business and innovation, not preventing either,” says Renata Jungo Brüngger, who is responsible for integrity and legal affairs as a member of the boards of management at Daimler and Mercedes-Benz. “This presupposes that we get involved in product and business development right from the start and work in cross-functional teams.”
When analysis tools automatically take on standardised tasks such as the mandating and accounting workflow, lawyers and compliance managers can focus on more important challenges, says Brüngger. At Daimler, for instance, this might mean involving lawyers from the outset on product development in areas such as electric mobility and artificial intelligence.
Data also helps in-house teams decide where to focus their efforts, says O’Carroll. It can assess, for instance, whether demand for legal services is rising, and which legal questions come up again and again.
Let machines handle basic tasks
For Rob Booth, in-house digital lawyering entails rethinking legal services to see which processes are best suited to humans and which are better handled by machines.
Some legal services are complex, says Booth, general counsel for The Crown Estate, which runs the UK monarchy’s property portfolio. “These need to be handled by humans using collaborative problem-solving and diverse thinking.”
In the past, he says, law firms have made a good profit over-serving corporate clients with many process-oriented tasks, such as basic contract drafting, which are “perfect for a machine to do”.
In-house legal departments should be designed accordingly, he says, examining workflows to identify where the lawyer adds value and which parts of the process could be handled by technology.
Even if repeatable tasks can be automated, however, it is important that lawyers remain involved in designing and monitoring the processes to maintain high ethical standards, says Booth, who co-founded the Bionic Lawyer Project — a collaboration aiming to improve the legal industry and provision of legal services.
What sets apart a digitally savvy in-house lawyer from others is the ability to deconstruct the practice of law from a fresh perspective and identify better ways to serve the client. “If you were going to invent the legal services industry from scratch in today’s customer-focused digital age, there are a lot of practices and traditions you simply wouldn’t use,” he says.
How automation can transform the leasing process
Becoming a digital general counsel means reshaping how your team delivers legal services to the business — not just using digital tools for the sake of it, says Rob Booth, The Crown Estate’s GC.
“It’s about redesigning legal processes to maximise the skills and expertise of human lawyers, and understanding where digital platforms can be used best,” he says: “Automating repetitive tasks, storing and analysing data, and facilitating collaboration.”
Take the leasing process. Large real estate asset holders such as The Crown Estate negotiate hundreds of leases a year. “Over the course of the company’s 260-year history, we have generated tens of thousands of leases,” says Booth.
Each lease is drafted from scratch and negotiated by a team of highly skilled lawyers. But not every lease warrants the same treatment. Larger, more complex leases may need a human negotiator but everyday leases could be drafted automatically.
Teams are able to collaborate on secure platforms similar to Google Docs, where they can edit one document remotely, rather than drafting and redrafting on paper.
When agreement is reached, leases can be signed digitally, then stored in a contract management system that is accessible to whoever needs a copy — from lawyers, landlords and portfolio managers to accountants.
Furthermore, the terms of a lease — such as pricing and duration — provide data points that, when compared to other leases, can yield useful market intelligence.
“Digital in-house lawyers don’t just use technology to improve processes,” says Booth. “They also create new insights for the business.”