Managing Legal
The Point
“Law department leaders report that one out of every five in-house [lawyer] hours is currently spent on low-complexity, repetitive or routine tasks, with 87% confirming that their department spends too much time on these tasks.” 2021 EY (Ernst & Young) Law Survey.
In Legal, as in any other corporate function, aligning talent with the work to be done is a task for a proven manager. Lawyers in-house and in law firms are not trained in this, and they’re not good at it.
This Matters
The corporate law function’s largest expense category is lawyer pay, so squandering 20% of costly in-house counsel time on “low-complexity, repetitive or routine tasks” is a major, self-inflicted setback to Legal’s mission.
Allocating complex work to expensive talent — and routine work to automated processes or to cheaper talent — is Management 101. It’s second nature to businesspeople. And the other corporate functions like finance, IT, or marketing have successfully done this for years. Not so, Legal.
Because …
1. “It amazes me that [General Counsels] tolerate this misallocation of their most important resources — their in-house team — and do not develop a strategy focused on the most efficient way of handling this routine work.”
So says Patrick Lamb, co-founder, along with Nicole Auerbach, of ElevateNext, a litigation law firm that ditched the billable hour at their founding a decade ago, and bills for value at a pre-agreed price with their client companies. Lamb and Auerbach are, in my view, two of only a dozen law industry leaders nationwide who best embody practical client service over reflexive adherence to the legal profession’s waste-filled business model.
Their law firm’s affiliation with global law company Elevate embodies the “strategy focused on the most efficient way of handling this routine work” that Lamb speaks of elsewhere. As lawyers prominent among prestigious firms, Lamb and Auerbach directly take on high-stakes, complex litigation for their client companies, while their affiliate Elevate offers process optimization, automation, and related technology for their clients’ “low-complexity, repetitive or routine tasks”.
2. “It’s even more amazing that CFOs and C-suite continue to tolerate this.”
So says Dennis Kennedy, veteran business attorney, law professor, and legal tech pioneer.
The “CFOs and C-suite” Dennis Kennedy refers to got where they are by proficiency in management. But in most companies, they don’t have direct, detailed visibility into the corporate law function. That’s because most have delegated management details to lawyers in-house and in law firms.
Lacking robust reporting relationships with in-house counsel and law firms serving the business, CFOs and the C-suite are badly positioned to make Legal accountable for management failures like the one identified by EY’s report.
3. We should restructure reporting relationships so that the corporate law function is directly accountable to the CFO, or to some other businessperson in the C-suite.
Experienced managers are expected to align tasks with the right talent — or with automated processes or with cheaper talent. For unknown reasons, corporate law functions report that they are not able to do that themselves. At least, according to EY, to the extent of 20% of in-house counsel time.
Life-long, practicing lawyers in-house or in firms are rarely accomplished executives with cost control and management skills.
So, in the law function, have the lawyers do the technical legal work. But in Legal — as in any other corporate function — put businesspeople in charge of controlling costs and managing people.