Special Report

Attorneys on Tap: The Changing Role of the Modern Legal Department

Historically, the role of the corporate legal department was to protect the company, including its brand and assets, from business operations and transactions that posed unnecessary risks. In-house attorneys acted as gatekeepers of information, working according to their own processes, with privileged status.However, over time the same pressures imposed upon other departments to deliver increased return on investment year over year eventually were imposed upon Legal. As a result, principles of operational excellence used by other corporate departments, such as the Project Management Body of Knowledge (PMBOK) and Lean Six Sigma, came to be used in Legal. Furthermore, the phenomenon of having in-house counsel who also hold business degrees has become increasingly common. "Like many things today, the role of the legal department has changed," said Scott Giordano, corporate technology counsel at Mitratech. "It used to be it merely had to handle legal matters, and now they're being asked to be part of a company's competitive advantage by producing high-quality, low-cost work."

Global Sourcing Offers Solutions

The global business process outsourcing (BPO) practices that manufacturers pioneered and developed over the last two decades have been slowly adopted by General Counsel over the last five years in response to corporate demands for improved value and scalability. Although they continue to rely upon their traditional outside counsel for advice on mission-critical operations, outsourcing options such as legal process outsourcers (LPOs), offshore captive business units and increased use of paralegals and contract attorneys are helping law departments save time and money on routine, repetitive tasks, allowing in-house lawyers to focus on their core competencies.

Taking advantage of global sourcing options presents the General Counsel with a series of challenges, including uniting a variety of participants--the core legal department headquarters, global providers and satellite offices--into a single, virtual team. In the Dec. 14 webinar "Attorneys on Tap: Collaboration with In-sourced and Outsourced Legal Teams," presented by Mitratech and InsideCounsel, Giordano outlined some key factors required for creating a seamless, high-quality legal team. "We'll need, at the very least, to link core legal department headquarters to their overseas offices and to global service providers," Giordano said. He articulated three areas that must be addressed in order to maximize the value of those providers:

Collaboration. Legal staff, outsourced participants and business units have communication and collaboration needs that simple e-mail and teleconferencing cannot provide. Giordano said teams should aim to create "a rich environment where everyone has a common view of whatever it is they're working on." One of the goals of collaboration is the accumulation of legal experience and knowledge into a central repository that others in the enterprise can draw from, reducing the costs of paying for solving the same problem twice.

Accountability. No matter how great your team, mistakes sometimes happen and processes sometimes fail. Accountability is an internal control that's key to success, Giordano said. "We need to be able to precisely track events, tasks and processes so we can determine who did what, when, and what processes are and are not working."

Security. Legal teams must achieve the right balance of openness and security. Knowledge should be accessible to the right people while protecting it confidentiality. The law department must feel comfortable with the integrity of the security of their information, but their systems must be flexible enough to accommodate attorneys, paralegals, experts and others who need to access that information.

Cisco: A Case Study

Cisco Systems is a global technology company with 65,000 employees and 2010 revenues in excess of $40B. With the goal of a low-cost, high-quality legal department that enables rather than impedes the business, the in-house lawyers at Cisco Systems build efficiency by creatively leveraging people and technology. Steve Harmon, Senior Director, Legal Services at Cisco, described their strategy for determining what legal work goes to outside counsel, which is called "Core vs. Context." It functions by identifying legal department activities that contribute to the company's overall competitive advantage ("Core") and those that do not ("Context"). It then further identifies those activities that are mission critical and those that are not. From there, Cisco uses a variety of sourcing options for Context activities and in-house options for Core activities. Core vs. Context does not eliminate the role of outside counsel; instead, it enables Cisco to leverage technology and operational know-how to correctly apply in-house resources for Core activities. "There is room and there's definitely a need for the in-house/outside counsel relationship," said Harmon. "The evolution is the change from a one-to-one relationship, one where all things not covered by in-house are sent to outside counsel. Rather, it's the use of a whole suite of tools and capabilities that are available to us. The challenge is to make sure we're all on the same page."

Harmon went on to describe the role of collaboration in maximizing in-house counsel productivity and providing the legal department with the operational agility to meet Cisco's needs, citing five attorney functions: Creating documents, communicating, reading, locating information, and legal analysis. Without a robust means to collaborate, legal departments become localized silos, and getting information out to where it can be utilized is haphazard and often dependent on the personal relationships among in-house counsel. To remedy this, Cisco uses knowledge and collaboration webs built with a combination of technology and business processes. They extend the legal department's work sphere into a constellation of multiple interconnected subject matter experts with multiple paths to the same information. These webs enable attorneys to easily locate information on core, mission-critical activities and other employees to just as easily locate information on non-mission-critical matters.

Collaborative Accountability Bringing Teams Together

The principle created by Mitratech that enables seamless knowledge sharing among team members at a global enterprise is called "Collaborative Accountability." Giordano summarized the principle by stating, "It's designed to promote operational excellence by breaking down functional silos, connecting team members inside and outside the enterprise, and ensuring transparency and accountability for every action." The software designed by Mitratech that implements Collaborative Accountability is called TeamConnect, and it addresses the factors Giordano cited as necessary to a successfully collaborative and united legal team. It enables collaboration among inside and outside team members by allowing them to see data in the same way and thus work off a common narrative. It also acts as a central repository so the entire enterprise can repurpose, share and access accumulated knowledgeand in-house lawyers don't have to spend their time answering routine legal questions and performing repetitive tasks. It promotes accountability through event forensic and reporting functions that can pinpoint the source of problems. Finally, it maintains appropriate access restrictions while supporting a culture of openness through a flexible security model that enables information to be accessed only by the right people.

Giordano went on to illustrate some client success stories. A Mitratech client, one of the world's largest reinsurance companies, uses TeamConnect to unite a large team of geographically dispersed counsel so they can routinely draft settlement memos while ensuring only the appropriate team members can access it. The legal team of another client, a leading pharmaceutical company, uses TeamConnect to collaborate on tracking suspected counterfeit drug transactions and work with law enforcement to weed out counterfeiters. At yet another client, the world's large home improvement retailer, the legal team used TeamConnect to reduce litigation resulting from workplace accidents by 50 percent over a 5-year period by employing the reporting and forensics functions to identify the source of those accidents.

Giordano summarized the session by stating that "the challenge in taking advantage of global sourcing options is both obtaining the most value of those sources consistently and in promoting accountability for the many team members located around the world." Tools like TeamConnect help legal departments meet that challenge by uniting contributors, including outside counsel and legal process outsourcers, and making their accumulated contributions available to other legal staff and to enterprise team members. By building in accountability and security capabilities, team members can function knowing that the integrity of their participation and work product is being protected. In the modern corporation, legal departments are facing the same expectations that are imposed upon other departments, and like those departments are responding with a combination of business know-how and technology to meet those expectations.

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