General counsel urge ‘self-serve’ model on businesses and weigh up law firm alternatives

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By Legal Futures

7 August 2012


Long: day-to-day commercial issues are more likely to be keeping GCs awake at night

In-house lawyers want to encourage non-lawyers within their businesses to take a more ‘self-serve’ approach to creating and managing low-risk and low-value contracts as a way to drive efficiency, new research has found.

They are also looking at alternative resourcing options in increasing numbers, with models like Lawyers On Demand and Axiom gaining traction.

The survey of general counsel at 74 major companies – conducted by LexisNexis in conjunction with Winmark – identified risk management as their top strategic priority, and in turn contracts as the main focus of risk management, ahead of regulatory changes, and data and privacy. Some 55% said they would like their colleagues to adopt a self-serve approach to contracts.

It said: “Under pressure to improve response times, it is unsurprising that over half of respondents would like to see more of a self-serve culture around contracts. Clearly this is easier said than done – only two-fifths actually see their business colleagues taking this approach with low value/risk contracts.

“This requires a detailed understanding of where legal input is required, and what processes and technology can be put in place to support their business colleagues in managing the remainder.”

At the same time, for the majority operational contracts are hard to find, and templates are not maintained.

Alignment with the business and increasing efficiency – more than reducing cost – were the next two strategic priorities, the survey found. On better efficiency, it said that “while in-house legal teams have successfully implemented the quicker and easier choices available to them [such as reviewing law firm relationships and spend], the more challenging, but possibly more rewarding, work remains to be done”.

This includes document automation, e-billing, unbundling transactional work, and a formal metrics programme. Some 11% have already implemented alternative resourcing models such as Axiom and Lawyers on Demand, with 19% planning to do so in the next year.

The survey said that legal departments are looking to understand where processes and transactions can be broken down so that not all work is carried out by expensive resource. It added: “In-house departments are finding that by focusing on fewer and stronger relationships, they are able to collaborate on solutions that are innovative and often very cost effective.”

Business process engineering is also set for a major boost, with 9% having done it and 24% planning it. Using a legal process outsourcing provider scored the lowest of the 10 options put to general counsel – just 7% had done it and the same number plan to in the next 12 months. Lack of time was the main problem GCs had with improving the way their departments operate.

Will Long, head of in-house development at LexisNexis, said: “In recent years attention has tended to focus on regulatory risk, with the relentless tide of regulation thought to be top of GCs’ minds. While this is undoubtedly still a top priority, these findings suggest that day-to-day commercial issues are actually more likely to be keeping GCs awake at night. This is likely to be a result of the continued difficulties in the wider economic landscape.

“These findings demonstrate that while the vast majority of in-house lawyers are under more pressure to increase efficiency, most are struggling to step away from day-to-day fire fighting to unpick the processes within which they are operating. Planning and preparing a successful business case for investment in efficiency initiatives clearly remains a significant challenge.”

Download the full report by clicking here.

 

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