Legal Departments Shift Focus to Address Organizational Design and Structure
- Business Transformation
- 6 min read
The COVID-19 pandemic has sparked many changes in the way businesses operate across every industry. Legal is no exception. Many legal departments have started to focus more on how to utilize new technology and providers that can help them accomplish key business goals. Determining how to “do more with less” needs to be at the forefront of business planning. Figuring out ways to maximize work product and outputs by using less time and money will give legal departments a competitive edge in the market. This does not mean that departments will need to partake in massive budget cuts. In fact, there are many “low hanging fruit” strategies that can be deployed to reduce costs that weigh down the business and promote the goal of doing more with less.
Using Tools to Pinpoint Spending and Workflow Inefficiencies
The first step to tackling organizational design is for a department to look how it is currently structured and determine how to redefine roles and redistribute certain tasks. Departments should concentrate on using automated processes and other technology to get the right people to do the right job. Using evaluative tools can assist with determining what should stay in-house and what the department can outsource to enrich outdated workflows and better meet client needs. Doing this will help departments decide which resources are slowing them down and what can help them thrive. Some helpful tools include the following:
- Spend Analysis: Collect, clean, analyze, and categorize the department’s billing data to provide visibility into spending habits and trends. This will also identify anomalies in spending and opportunities for cost reduction without losing business knowledge or reducing service quality. These findings will shed light on what mix of people, process, technology, and business intelligence will aid in making data-driven legal and business decisions. By taking this approach, departments will benefit from budget clarity and improve efficiency by offering insight into who should handle what, both inside and outside the company.
- Technology Assessment: Take a detailed look at all current technological investments that the department is using to see which solutions are the most efficient and profitable. Implement a ranking system that will highlight what technology the department should keep, expand, or discard.
- Department Work Assessment: Figure out which internal employees generally handle certain functions and how they perform. Being able to inventory each employee’s strengths will provide insight on the best way to distribute work and improve efficiency. This will also highlight which tasks they should outsource, especially if attorneys are working on a lot of administrative tasks. While critical, some work will add time but minimal value to a legal department’s service offerings and presents an opportunity to explore automation or right-sourcing to an ALSP.
- Maturity Benchmarking: Departments can use maturity benchmarking to baseline where, broadly, the department sits compared to other organizations, and what it must prioritize to achieve the desired state of maturity. Performing follow-up maturity assessments are good to perform as well because they will track progress and measure change, as well as gauge satisfaction levels of the department.
Changing Department Structure to Incorporate More Tech and Outsourcing
After evaluating spending and performance, legal departments can start redistributing work to law firms, ALSPs, or other outside vendors. Departments should start this process with exploring if current technology can be utilized in more ways than currently being applied. Pinpointing helpful technology will make the task of vetting new investments more manageable and less expensive. Overall, the need for new technology will be less if an organization determines how they can first expand current investments. In addition to improving the department’s information governance program, reusing technology is a big cost saver and cuts down on the time needed to research new technology. As such, before piling on new expenses, it is prudent for organizations to analyze their current technological investments to determine if they can use it or upgrade it for other tasks. However, legal departments should still be realistic about what new investments can address any gaps or areas of underperformance. Besides new internal investments, leveraging expertise through a consultant or ALSP are other options for managing technology efficiently.
Right now, turning to ALSPs are a great way for legal departments to correct workflow inefficiencies and outsource certain work. ALSPs use innovative solutions to carry out projects and often employ legal professionals working on a contract basis. Partnering with an ALSP could be a long-term relationship or an as-needed basis, depending on the type of work needed. Some key benefits of using ALSPs include:
- The ability to focus on more high value tasks like risk analysis and case strategy, rather than spending a chunk of time on administrative or other lower priority legal functions
- Flexibility in resourcing, including fast ramp ups and overflow capacity
- The opportunity for a knowledge retention strategy and higher value work product
- Access to the latest technologies and work practices
All of this makes investment into ALSPs very attractive to legal departments looking to transform. These partnerships will undoubtedly improve workflows and processes, save money, and yield better outcomes. In the future, both during the pandemic and beyond, legal professionals should watch for new ALSP services that enter the market and determine if they can leverage them to meet current or future business needs.
It is important to remember that performing evaluations and making structural changes is a continuous process as technology evolves and more support services become available. Legal departments need to embrace these changes while simultaneously keeping on top of legal functions, remaining cost conscious, and inventing new and efficient modes to deliver their services. Quarterly or yearly reviews will help departments stay on top of workflow trends and new offerings so they can provide clients with the best outputs while still working efficiently. Using new tools and partnerships will promote the principle of doing more with less and overall, make departments run smoother and work smarter.
For further reading, download our whitepaper that explores the different remote tools and work models that will be the new norm in the legal industry.