Corporate legal departments encounter various obstacles in their fields, such as cost management, heightened requirements, and personnel supervision. These challenges are closely associated with administrative and procedural management and can be enhanced through the implementation of legal tools that streamline processes.
View the complete global report detailing the key focuses of legal departments.
The ESG agenda has introduced a new challenge for legal departments, requiring organizations to focus on environmental, social, and governance issues.
Companies need to modify their methods and processes to ensure they have positive effects on these three areas. While the challenge is everyone’s concern, it is the legal department’s responsibility to document and communicate these actions to regulators and investors.
Corporate legal departments need to be prepared for growing demands and be equipped to tackle numerous challenges ahead.
What are the main focuses and developments for legal departments in 2023?
Cost management is a key issue for corporate legal departments, with a significant portion of the budget allocated to external legal services for their value and security.
The companies realized they could invest in their legal department after observing the recurring situation.
The industry must be better equipped to manage increased internal operations by having a larger, skilled team and utilizing technology for improved workflow efficiency.
The outcome of this minor adjustment may lead to improved internal control, reduced need for outsourcing, and increased capacity to fulfill more requests effectively.
Legal technology usage in corporations
The use of technologies to assist legal teams has been altering corporate norms significantly.
Organizations have employed various technologies to streamline and enhance their internal processes, such as legal process management tools, research on case law and doctrines, data analysis, and process mapping. These technologies provide a competitive edge by improving time management and enabling more informed strategic decision-making.
Teams benefit significantly from utilizing legal technologies to automate routine tasks, enabling quicker and more precise completion of operations. This efficiency allows for prioritizing more critical tasks, utilizing energy and intellect effectively.
Organizations benefit from technology in two main ways. The first aspect is related to operational efficiency, which has already proven successful through the clear positive results achieved by departments using technological solutions.
Some companies are hesitant to allocate funds for legal technology in their budget, but investing in these technologies can provide a significant return on investment when implemented effectively.
Companies can now bring demands that were previously outsourced to law firms in-house, thanks to technological advancements that support increased workflow, resulting in significant cost savings.
The increasing significance of ESG and its popularity among businesses
Having a skilled legal team is crucial, but it is insufficient. Nowadays, it is also essential to possess the ability to expand and utilize tools that aid in managing the substantial rise in requests.
The legal departments need to be ready for a new challenge, the ESG agenda and its regulations, on top of their usual operations and demands.
Most companies have yet to put this initiative in place, but they will soon need to adjust. Legal departments will bear the brunt of the work, as they must provide guidance on initiatives, monitor projects, and keep investors informed.
Legal departments that are well-prepared to address these issues will have a competitive edge, attract more investments, and maintain a positive image in the market. It is crucial to be ready for any upcoming changes.
Which direction should we go?
The legal future belongs to highly skilled professionals specializing in their fields, for both law firms and legal departments.
Companies and organizations are now recognizing the need for highly skilled professionals to focus on their internal matters.
When there is a shortage of in-house professionals, they enlist the services of external law firms who possess the necessary expertise and experience.
The rise in challenges will lead to a higher need for these professionals, causing legal departments and law firms to likely expand their demands due to global economic changes and the adoption of new practices.
Companies must utilize legal technologies to prevent skilled professionals from being bogged down by operational tasks, allowing them to focus on strategic problem-solving and adding value to the company.
It requires strong commitment and proper guidance to enhance and expand the company’s foundation regarding environmental, human and social rights, governance, and transparency, with numerous pending issues waiting to be addressed for the company’s growth, particularly related to ESG matters.
Every effort made in advance is insufficient as the outcomes of these matters on organizations and society remain uncertain. Organizations will find navigating the complexities of change easier if they are already taking action.
Download the full material in this link to learn about the Legal Department Operations Index in 2022 and see how companies have advanced and enhanced their legal departments.