Out-Law Analysis 3 min. read

What legal teams can learn from tech giants’ search for efficiency

The legal industry is going through rapid and systematic change as an economic downturn drives a renewed focus on efficiency.

Tech giants have a great deal of experience of operating amid rapidly changing conditions, and more recently, they have been forced to learn how to operate efficiently too. But legal teams do not need to replicate the job losses suffered by big tech companies if they don’t over-hire now.

Firms need to act decisively and strategically to maximise the efficiency of their in-house talent – exploring better options that are available for delivering required outcomes. The market for alternative legal services is storming, providing a range of new outsourced options that require little commitment, offer efficiencies and protect in-house legal teams from needing to work all hours.  

Lessons from recent years

The Covid-19 pandemic created a huge spike in demand for tech. Lockdowns had a significant impact on consumer spending, and while the high street suffered, online retailers thrived, and online advertising went through the roof. This spike funded tech’s expensive new investments into areas like virtual reality and driverless cars, and the industry began hiring to meet increased demand.

The market for alternative legal services is storming, providing a range of new outsourced options that require little commitment, offer efficiencies and protect in-house legal teams from needing to work all hours

But in recent months, investors have put big tech firms under pressure to ‘cut the bloat’ in an effort to adapt to the current economic slowdown. After large job cuts, staff remaining in post have been left to use extreme creativity to continue meeting the business’ expectations.

Similarly, during the pandemic, the demand on in-house legal teams increased massively. It took remarkable agility and dedication from lawyers to consider the long-term impact of a raft of new regulations while also providing immediate responses to questions from their clients so that they could keep trading.

Many in-house legal teams wanted to hire to meet demand during the pandemic, but were not able to do so. Boards have been asking their lawyers to do ‘more with less’ or ‘less with less’ for years, while questioning the value of in-house legal teams at the same time. Even today, many in-house legal teams still want to increase headcount – but there are more flexible options available which carry less long-term risk of redundancy.

Future-proofing the legal service

In-house teams should act now to create legal service resourcing models that suit the present day and that can be adapted in the future. General counsels (GCs) must ensure they remain in the boardroom, secure in the knowledge that intelligent lawyering, backed up by data, will always be required. Technology should never replace a lawyer’s ability to apply critical thinking, advocacy and human nuance to business problems.

To offer strategic value in this way, in-house teams must create the space for their lawyers to become commercially astute business advisors. This means ensuring in-house lawyers are doing work that is valuable and makes them feel valued in their roles.

Hiring should not become the default

Companies should consider whether it is the most efficient use of qualified lawyers’ time to work on low-complexity tasks. Typically, large swathes of legal work can be moved to other professionals who are adept at delivering the work at lower costs with the help of technology. They should also explore the prospect of contracting outsourced junior staff to handle some tasks, rather than requiring qualified lawyers to manage, oversee and train them in-house.

Of course, legal technology will also play a major role in automating and scaling work, but in-house teams should also consider how people-based resourcing solutions can maximise performance.

Use data to support efficiency

Legal tech, provided through the in-house team’s own investments or via external providers, offers access to data which allows a business to better understand its operations. This tech can back up the advice that lawyers provide to their board, and will support decision making for the business as a whole.

Capitalising on technological innovation 

Research by Goldman Sachs suggests that, in future, around 44% of legal tasks in the US could be replaced by artificial intelligence (AI). That feels frightening, and while workloads are increasing and legal budgets tightening, it would be easy to remain too busy to develop a targeted approach to change. But that is only a very short-term strategy for success.

Instead, in-house teams should work to capitalise on their wholistic view of business risk and opportunity, which allows them to provide a depth of advice that others in the business cannot. Indeed, many legal observers predict that GCs will become a lynch pin for collaboration and stakeholder engagement at their respective firms, advising on board-level strategy, tech use, data, risk management, globalisation, ethical leadership and crisis management.

In-house teams must take advantage of their unique positions within their organisations and become the custodians of progress and business integrity.

We are processing your request. \n Thank you for your patience. An error occurred. This could be due to inactivity on the page - please try again.