6 business-minded tips for general counsel responsibilities

Nathan Wenzel | January 26, 2022 | Articles

Business leader first, lawyer second” is the new mantra for modern general counsel. A best-in-class GC is no longer just a legal advisor but also a strategic business analyst who’s fully integrated into company operations. COVID-19 accelerated this transition when GCs played a huge part in strategic risk management and cost control efforts to keep businesses running. This shift only shows signs of persisting in the coming years.

Don’t worry; nobody expects you to suddenly hold an MBA. But there is definitely new pressure as general counsel responsibilities now include making the business more efficient and profitable in addition to giving legal advice. A handful of strategies — from using new legal technologies to partnering with teams across the company — will help you nail these new business responsibilities and keep growing from a lawyer to a business leader.

1. Master general counsel responsibilities by leveraging technology for data-backed decisions

GCs in the 2021 EY Law Survey listed a “greater use of technology” as the number one strategy for cost savings. To start, advanced legal technology saves time (and dollars) by automating low-value administrative work. But the most meaningful benefit of legal technology is access to comprehensive legal ops data. This data is key to understanding your current spend and making evidence-based decisions to become a more cost-effective business unit.

Legal software tracks metrics that measure performance across these key areas:

  • Legal spend: Total legal costs, cost per matter by practice area, internal vs. external spend, etc.
  • Matters: Total list of matters, matter statuses, dates worked, etc.
  • Billing: Total list of invoices, guideline violations, accruals, etc.
  • Vendors: Total list of vendors, hourly rates, average cycle times, etc.

These data points give you concrete information about your current business performance and highlight opportunities to improve it. For instance, vendor data allows you to compare spend across vendors and find places to consolidate work. Or, you can compare average matter lifecycle times between firms that handle similar matters. Use this knowledge to set reasonable timeframes with vendors and ensure they’re not dragging out work longer than necessary.

Without this type of insight, GCs lack the information they need to make choices that support the bottom line. Just take it from Trevor Uffelman, GC and Chief Claims Officer at the American Trucking & Transportation Insurance Company:

“Before SimpleLegal, I was blind and didn’t have a way to see what was going on in the department. Now, I have access to dashboards and reports that allow me to run a more efficient legal department.”

Explain these business-focused benefits to your C-suite when making the pitch to bring on new legal technology. Industry experts will back you up: Gartner notes that spend on legal technology “will increase threefold through 2025 as general counsel face unprecedented pressure both in terms of managing legal workload and driving efficiency in their departments.” The business advantages of investing in legal tech clearly outweigh the initial cost.

Want to learn more about how to become a data-driven general counsel? Check out our top tips here.

2. Optimize your external spend by considering non-traditional legal services

Alternative fee arrangements (AFAs) and alternative legal service providers (ALSPs) can help you get more for your money compared to traditional outside legal services that use hourly billing.

Here’s how:

AFAs provide predictable flat rates

With an AFA, you don’t have to worry about surprise fees from timekeepers billing legal work by the hour. You just use a fixed cost. And because your legal spend is more predictable, you can then create more accurate future budgets. Have your team look for opportunities to negotiate AFAs, and make sure they emphasize how AFAs also benefit law firms (they’ll know how much income to expect, fewer billing issues, etc.).

ALSPs charge less and use technology to boost their turnaround time

ALSPs are typically more cost-effective than large firms because they offer lower rates and leverage technology to speed up legal services without compromising quality. ALSP Percipient found they saved a client about $384,000 on legal matters over the course of 18 months. With savings like that, it’s no wonder that “organizations that already use [ALSPs] are eight times more likely to say they want to expand their use,” according to the EY 2021 Law Survey.

3. Invest more in in-house talent

In the 2021 EY Law Survey, 78% of GCs said relying less on outside legal counsel and more on in-house counsel saves money. However, many corporate legal departments don’t have enough employees to keep up with the work they receive. If you can’t bring on more in-house staff, invest deeply in the talent you currently have to prevent costly turnover and burnout.

Support your in-house legal team by:

  • Bringing in time-saving tools that automate repetitive or manual tasks. In Deloitte’s 2021 State of Legal Operations Survey, 69% of GCs said their “attorneys were taking on too much administrative work.” You have the power to change that as an executive team member. Talk to the senior management team and advocate for legal technology so in-house counsel can be freed up to focus on higher-level priorities.
  • Offering more in-house learning and development. Deloitte also found that 71% of legal ops professionals said their company “did not have the right learning and development opportunities to support business needs.” Whether they’re interested in management skills or new approaches to legal strategy, support employee career growth by covering registration fees for continuing education courses and webinars each year.
  • Relating with your team members on a personal level. Taking the time to check in on employee wellbeing is important, especially in remote environments where staff may feel isolated or unsupported. Boost team morale with group activities outside of work, like a virtual happy hour or team dinner. A great general counsel will show that they value employees as people, not just professionals.

4. Make cybersecurity and data privacy part of general counsel responsibilities

Participants listed cybersecurity as the “most important issue area for businesses” in the 2021 ACC Chief Legal Officers Survey. Strong data security reduces financial and legal risks by decreasing the likelihood of expensive data breaches and resulting regulatory fines.

Partner with IT to manage cybersecurity: you’re more equipped to ensure legal compliance with complex data privacy regulations, letting IT focus solely on identifying and addressing security vulnerabilities. This helps improve legal ops’ efficiency by reducing the risk of costly noncompliance with applicable laws as well as lawsuits from breaches.

As another layer of protection, team up with IT to create and review cybersecurity training and an incident response plan.

Learn about other ways to prioritize data privacy in this blog post.

5. Build better working relationships across departments

Think of your company’s business units — legal, accounting, sales, etc. — like different gears in a machine. If there’s friction between them, the machine can’t run properly. Unfortunately, tension between legal and other departments can quickly arise from issues like a lack of shared digital tools, poor communication skills, or ineffective workflows.

For example, one common area where problems come up is managing law firm accruals. Most legal departments have a hard time manually collecting and tracking these estimates, which causes problems for accounting when they get unexpectedly high invoices. Even though legal works more closely with vendors, it usually falls on accounting to reach out and dispute the charges.

Talk to accounting and sales to find out what stresses them out about working with legal. Then, ask your team for their thoughts and come back to the other departments with ways to move forward and work better, together. Hearing perspectives outside your own team means more varied solutions to recurring problems that hurt productivity.

Pro tip: A legal spend management solution also makes life easier for non-legal departments. Learn how in this SimpleLegal blog post.

6. Take an active role in diversity & inclusion initiatives

Speaking of how different perspectives create better business solutions, a 2020 McKinsey study found that “the most diverse companies are now more likely than ever to outperform less diverse peers on profitability.” The legal industry, though, has historically lagged behind in diversity and inclusion. If you’re in a general counsel position, lead the charge with both your own team and your vendors.

In-house diversity efforts

Just 16% of legal departments at small companies (under $1 billion in annual revenue) track diversity metrics. Just like spend data points help you figure out how to optimize in-house cost control, collecting information on your team’s diversity helps you determine clear areas for improvement.

Vendor diversity efforts

Many in-house legal departments now hold vendors accountable for meeting diversity standards like the Mansfield Rule. For example, corporate counsel at HP, Novartis, and Facebook will “take their work elsewhere or cut fees” if their law firm partners don’t comply, according to Bloomberg.

The ACC Docket recommends four steps to make sure you partner with law firms who share with your company’s diversity values:

  1. Provide law firms with clear guidelines
  2. Survey outside counsel regarding diversity
  3. Track hours worked by diverse timekeepers
  4. Communicate regularly with outside counsel

Get resources to help with general counsel responsibilities in the SimpleLegal Learning Center

The general counsel role now involves much more than being a top attorney. We get that; no matter how many years of experience you have, it may feel overwhelming at times. That’s why we created our Learning Center: to give busy GCs and their teams helpful content that sets them up for continued success. After reading, tag us on social media @SimpleLegal and let us know what impacted you the most!

Reports for GCs

This article has been updated to reflect new information and industry trends from the original article, published on September 13, 2019.