The role of the GC, and by extension in-house legal teams, is changing. Whereas legal functions have traditionally operated as a guardian of the business with a primary focus on risk management, there is now an increasing need for a legal team to operate as a business partner and strategic enabler, delivering additional value to the wider business. Agreeing on what this value is and how to measure it is easier said than done - in fact, 75% of CEOs surveyed, indicated that they don’t believe their legal function delivers sufficient value to justify the time and money spent¹.

There is now an increasing need for a legal team to operate as a business partner and strategic enabler 

This may be reflective of the historic perception of legal departments as cost centres rather than direct revenue generators, such that measurable value may include delivery speed, efficiency, cost savings, or even user experience. Delivering these and importantly, being able to demonstrate the value of this contribution to the business, requires in-house lawyers to look beyond their traditional remit, play a larger role in strategic change projects, and consider not just what legal services they deliver to their business, but how they deliver these services.

So how do legal teams address this? Development of new skillsets is one answer, and one that has received a lot of attention in recent years. Whilst skills are important and can certainly support a transition to a ‘future-proofed' legal function, they are only part of the solution. An equally important and essential ingredient to enabling change is having the right mindset. Mindset is a powerful thing. It impacts our view of the world and how we respond to events in our lives.

What does this mean in practice and how can the right mindset be cultivated to meet the evolving demands placed on legal?

Growth vs fixed mindset

Those with fixed mindsets believe that intelligence and talent is innate and therefore fixed. If this is true, then there is little point in putting effort into something you are not good at. Consequently, those with a fixed mindset tend to avoid challenges as they bring the possibility of failure. Setbacks are seen as permanent and the success of others, is a threat rather than an opportunity to learn and grow.

Conversely, a growth mindset is centred around the belief that intelligence can be developed.  Therefore, failure is an opportunity to learn and improve, rather than an outright negative outcome - a concept that can be uncomfortable with a focus deeply and correctly rooted in the management and avoidance of risk.

However, this does not mean being comfortable with or accepting of failure.

Rather, it requires that you use adversity to drive you forward to even greater success. This implies struggle in the process and a need to embrace this as a necessary part of the growth process. In an increasingly volatile and ambiguous environment, failure is almost impossible to avoid, and you must be willing to experiment and take informed risks. Being able to learn lessons and carry those forward takes on a much larger importance than the initial failure and enables you to deliver iteratively better (rather than perfect) solutions. Considering the pace of change in organisations - and by extension their legal teams - are faced with, one could argue that no solution is ever perfect (or at least not for long!).

Cultivating a growth mindset and being aware of the elements of a fixed mindset that might be holding you or your team back, is therefore a key component to driving successful change.

Asking the right questions vs having the right answers.

In the legal industry, laws are (largely) fixed, and whilst interpretations vary, there is often a general understanding as to how problems should be solved, and what a good outcome might look like. As such, lawyers are expected to know the answers – after all, that is what their clients are paying them for, right? Decisiveness, self-confidence, and gravitas are therefore often traits we attribute to successful lawyers.

However, for the in-house lawyer of the future, problems (and by extension their solutions) are becoming increasingly fluid and not only rooted in legal precedent, with a focus on stakeholder engagement, change management, process improvement, and the use of technology.

Essentially in-house teams are being called on to not only do their jobs better, but in many cases, to do them differently.

This means accepting that you will not have all the answers – and that’s ok. Instead, what is more important is to ask the right questions.

Essentially in-house teams are being called on to not only do their jobs better, but in many cases, to do them differently.

Standardisation v Personalisation

Traditionally, lawyers are called upon to navigate complex issues and make recommendations based upon an assessment of the facts at hand, and the interpretation and application of laws to these facts. Often there are multiple parties involved making it difficult to anticipate or control every action or outcome. Each problem can therefore be considered unique in its own way, requiring different strategies to be employed to solve it. This is likely driven by the fact that many lawyers train with an emphasis placed on a high standard of delivery and client satisfaction, which is carried over to the very different environment of an in-house legal team.

However, this approach takes time, and in a legal landscape where client ‘user’ experience and efficiency are increasingly hot topics, delivering a perfectly tailored approach is not always feasible. In-house teams increasingly find themselves overloaded by low-value work and administrative tasks which prevents them from focusing on more strategic, value-added services. This can lead to the perception of legal as a ‘blocker’ (read risk manager) rather than an ‘enabler’ (read business partner) to the business.

Therefore, a move towards a streamlined approach – including standardisation where appropriate – is essential, particularly where budget constraints are a factor. Rather than a mindset that focuses on factors that differentiate a problem, instead, the in-house lawyer of the future would be better served by considering the similarities between problems, and how they can be exploited to allow a quicker, more efficient service, whilst minimising any corresponding increase in risk.

There is, of course, a prevailing argument that standardisation is impeded by a fear that lawyers will become redundant. Of course, standardisation removes some tasks away from lawyers – but these may be tasks which are inappropriate for lawyers their time on. Lawyers are in the knowledge business, but they are also in the relationship business, and there will always be a place for advice on complex, unique, and strategic problems. Standardisation done well should, in fact, free up lawyers’ time to focus on these interesting problems, with the low-value administrative work taken off their plates.

in a legal landscape where client ‘user’ experience and efficiency are increasingly hot topics, delivering a perfectly tailored approach is not always feasible

Collaborative Achievement v Individual Performance

A culture of individual performance is (whether intentionally or unintentionally) at the core of many law firms’ business models. Many lawyers train and practise based on the concept that their success is based upon their billable hours, shifting to a focus on revenue at more senior levels (e.g. the traditional ‘eat-what-you-kill’ approach to partner revenue attribution). This culture is very much promoted by legal rankings directories, and concepts such as a ‘rainmaker’ partner. 

Where a firm operates on the billable hour model and benefits from strong partners driving growth, this culture can be very useful. However, when moving to an in-house environment, particularly in the context of increasing expectations on legal departments, the culture of celebrating individual performance can become problematic, as it risks impeding the formation of the truly collaborative, multi-disciplinary teams required to solve strategic business problems and deliver wide-ranging change.

The successful design and incorporation of a new Contract Lifecycle Management (CLM) process and system, for example, requires a wide range of skills that are rarely found in one team, let alone in an individual.

Therefore, to adapt to a changing in-house legal landscape, a shift is required, from a culture in which individual performance is rewarded, to one where collaboration and knowledge sharing between individuals and teams is celebrated and promoted. As expectations on Legal increase, the measure of success will become the ability to coordinate efforts across multi-disciplinary teams and deliver successful outcomes, rather than the ability of an individual to deliver a herculean effort.

to adapt to a changing in-house legal landscape, a shift is required

Disruptive v sustaining innovation

As with a growth mindset, the distinction between disruptive and sustaining innovation is not new. First coined by Clayton Christensen in 1997, the idea of disruptive innovation has permeated many industries throughout the last two decades – however the legal sector has been slower to fully embrace the concept.

The concept itself distinguishes market-changing, transformational innovations against iterative, smaller innovations that are easier to conceive of and implement. One of the most well-known examples is that of the creation of a car (disruptive innovation) over the breeding of faster horses (sustaining innovation).

In the world of in-house legal, it can be difficult to imagine where the opportunities to drive disruptive innovation lie. In many ways this is understandable, given the scope of the legal team’s role, the budget available, and the level of influence it has compared to, for example, a product development team. As such, truly disruptive innovation is incredibly difficult, if not impossible, for many in-house legal teams.

However, there are certain concepts that can be taken on board by the in-house lawyer that can help prepare them to become a better business partner and close a perceived value gap.

Consider a simple illustrative example: you have been working for months on improving the NDA creation and review process within your organisation. You may have introduced a streamlined procedure, incorporated workflows, or put into place playbooks to accelerate the contracting process. This may have worked well and offered significant time savings, but if volumes increase, ultimately your team will become more stretched, and things will slow down as a result. This is the limit of the current process; however efficient it may be.

Instead, a more disruptive approach to tackling this problem might be to take a step back from the problem and consider whether Legal needs to be involved in NDAs at all. Perhaps you could remove Legal’s involvement altogether through a complete standardisation of terms, a simple change in procedure/policy, a review of the organisation’s risk appetite, or through complete automation (or a combination of all of the above). Whilst a solution of this nature would require more sweeping change and would be more challenging to implement, it could change the nature of the problem entirely and likely offer significant savings – akin to building a car, rather than breeding a faster horse.

First published in The Lawyer on 24th June 2022