Golden Age of the Corp. Legal Department is Done - The Evidence
Had a great time at SOLID. Enjoyed speaking on the hypothesis that the golden age of the corporate legal department is done and 5 practical steps you can take now to prepare yourself and department for what comes next.
Let’s be clear:
- Legal Services are here to stay and so are the operating principles legal ops has brought to the legal business.
- What’s going to change dramatically, however, are the entities in which we (both attorneys and legal ops professionals) work.
The pace of change is hard to grasp: Law firms were around for 200 years before corp. law departments emerged in the early 1980s. 1980-2020 is 40 years, only 20% of 200. How can the golden age be done already?
- Corp. Law Departments were created by companies because no other alternative existed to the law firm. That is no longer the case.
- With a handful of exceptions, none of our companies are in the primary business of delivering legal services.
- If there is one thing I’ve learned from my Silicon Valley colleagues, and now first hand with Hearst Labs it is this. As a start-up becomes large enough to require an infrastructure, no one wants to waver from full focus on growing the core business, by diverting funds to a sizable legal operation. And many of the structures we built in corp. law departments, as replicas of law firm organization make no sense in this context. Even if you are working at a more established company (and Hearst at 132 yrs old certainly qualifies) you can be informed by this perspective.
- In the past several years we’ve begun to see the results of this line of rational thinking:
- Rise of the big 4 accounting firms in offering legal services and UT and AZ recently approving non LF legal entities
- Fully outsourced legal departments, as GE and DXC did in partnership with UnitedLex, or outsourced functions, as has become the norm for eDiscovery, contracts and bill review, and
- Re-organization of forward-thinking law firms with units dedicated to functional process flows and consulting, and outsourcing their back office to more fully focus on front office service delivery.
Next we will explore 5 practical steps you can take today to be ready for tomorrow.