Innovation in legal departments
Wherever we go these days we hear the word “innovation”, but what means innovating in legal departments?
Some might think that innovation necessarily comes from implementing new technologies to work more efficiently, while others will vote for adopting other working methodologies. Both of them are right. There is not a sole way to innovate in your legal department, but there are many things that you should take into account if you plan to innovate.
1. How can we innovate in our legal department?
Innovation relates not only to technology, but also to processes and, above all, to people. You will not be able to do much in the two first areas without working at the same time with your teams. Also, promoting a cultural change in your legal department will be more realistic when it accompanies or follows a path of change in the rest of your organization.
a) Some analysis as starting point
A good way to start is analyzing the current situation of your legal department: What does the legal department do? What is your time devoted to? How do people and teams interact? Do you have bottlenecks? What are the pain points to put focus on?
Such analysis can be carried out in various ways, through interviews to the different stakeholders, questionnaires, a time recording exercise, workflows examination, etc. And the importance of starting with some analysis is great, as the perceptions you might have can proof to be so, this is, mere perceptions, as you advance with the analysis.
Analysis will help you focusing on solutions to real problems.
b) Planning solutions
Once you have detected the pain points you should start planning solutions. For such purpose, you can create working groups, appoint someone in your department to take care of the process, hire external counseling, etc …
For each problem, there might be a wide range of solutions. In some cases, they will go from re-defining your processes, re-organizing workflows, creating a more cooperative environment, etc, to implementing certain technologies.
In order to decide which solution to take, you will need to analyze and balance potential benefits and savings versus resources needed, and time for implementation.
Implementing new working methodologies can also be of help, as changing how teams work is not an easy task without putting efforts at the same time on people, and how they feel about change. Design thinking or Agile methodologies are not new in the office, but using them in legal departments is new in most cases. My advice is to start with some experiments… e.g. implementing a whole agile methodology in your department can be challenging, especially considering that part of the way you work depends on others, mainly the business line/department you are advising. Thus, it might worth starting using these methodologies in a specific project, after having agreed so with all the relevant stakeholders.
It is also advisable finding some champions to help you launch your projects. Many people in the teams love working in projects different to their business as usual while they collaborate, being part of the change. These champions can help accelerating the change. Though, you should not forget the importance of listening to everyone. The most skeptical voices can help you do some challenge to your project, so an inclusive approach will be needed.
c) Prioritizing and focusing on execution
Prioritizing the projects or work lines to undertake is also an important ingredient of the recipe. During your analysis you might encounter various pain points of many different nature, some of which can be solved reviewing the way work is performed and some others may be solved adopting or creating a specific technology. Also, some projects will take longer efforts and bigger budgets while others can be implemented with much less effort, or without budget. Thus, when deciding the mix of projects to undertake each year or each semester, you should take into account all this variables.
The reality is that, in most cases, you won’t be able to initiate all the projects at the same time. The effort in terms of time and resources can be of relevance, and certain projects need to precede others as the information to be obtained or the steps to be taken after the previous project, can serve you to implement ulterior projects.
Once the team has agreed on a project to be undertaken, managing the progress of the project and keeping the team focus is of essence.
There is a lot of excitement around project ideation, as creativity is such an important part of innovation. But, executing the projects is often the most difficult part. Many projects risk failing if project managers and teams lack enough focus on execution. Especially long-lasting projects, where the team members’ mood or concentration to obtain results can suffer ups and downs. To avoid this it is advisable to add short term objectives, iterations and revisions along the project implementation and lot of team communication to the recipe.
d) Learning “on the go” and demystifying failure
Most lawyers (particularly transactional ones) are splendid objective-oriented employees while many lawyers are very creative in offering solutions to business problems, and both of them are great attributes for innovation.
On the contrary, due to this pronounced objective-oriented nature of lawyers, failing is not often seem as an option. And understanding that some initiatives will fail is part of the process of innovation.
If I had to give one important tip for all the process, is to: first, teach lawyers about principles of innovation such as fail fast and learn fast and learn by doing, as a way to decode their fear to fail, and secondly, allow people and teams some room for experimentation. Even in cases when failure arise, lessons learn on the way will help teams to perform better and to apply the knowledge acquired in next projects.
There are tons of written papers about innovation in legal, legal technology, etc, but in most cases, we learn as we go through the implementation of different projects.
2. Tone from the top
Innovation processes must be supported from the top management, or in the case of legal departments, from the General Counsel’s role. Otherwise, risks are that the team do not consider innovation as a strategical question, with the consequent loss of focus.
Assuming that, by merely appointing somebody for the role (without any support or any budget), innovation will come just from the creativity of the appointed person, is quite an unrealistic position.
All this process that will lead your department to improve in the way they work will require time and efforts from the whole team, and not just from the appointed persons.
As advanced before, you might decide to dive into the innovation processes on your own, or you can choose to hire a consultant.
Even when hiring a great consultant for the job, if the consultant does not count with support from the General Counsel and the rest of the team, all the analysis and implementation process may turn into a sterile exercise.
Establishing it as an objective of the whole legal department will help with the involvement of team members. Remember that not all team members will feel equally motivated with the project.
3. Promote team’s involvement
Innovation as a strategic objective requires the involvement of the team. But such involvement shall not be a passive one, but a truly active participation.
For the transformation process to take place, team’s initiatives shall be fostered, as people working in different roles know better what are the problems, bottlenecks and situations that you need to address. In my experience, these tips can help:
Requesting volunteers is a great way to finding people who will be genuinely engaged with the project. Remember that commitment is necessary for the execution of projects, as otherwise projects will end in a mist of non-executed ideas.
Let the team decide how to construct some solutions, make proposals, challenge decisions. As in product innovation, final users are essential in the design process.
All the team should feel owner of the innovation projects, as they will be the ones profited by the improvements.
4. Help others improve: legal as a strategic partner
Legal departments are not isolated areas within the companies, they pertain to a bigger structure and interact with many stakeholders in the company. Thus, innovation in legal will affect other departments, as well as innovation of other areas such as sales, logistics, procurement, etc can have a great impact in the legal department.
At the beginning of this article I mentioned the significance of the change management and innovation process in legal to accompany or to be embedded with a process of change and innovation within the whole company. For this purpose, cooperation between departments needs to take place.
Finding your allies is also essential and in many cases you will have to convince your company on the importance to support your project for the whole company. E.g. introducing a contract lifecycle tool may seem as a whim of legal, though, savings in time, improvement of risk management, efficiencies (e.g. via e-signature, approvals, etc) shall be a benefit to the whole company or business line affected.
At some point, it might happen that legal innovators become “internal advisors” of technological solutions to other departments of the company, as their privileged location to observe technologies that help business grow and work more efficiently can also benefit other departments. The same way, if we think about processes, a revision end to end of some particular processes may imply the reconsideration of workflows that exceed the legal function. And for that purpose, communication and coordination between innovation leaders from different departments has to happen.
As a summary, there is not a sole recipe for innovating in legal departments, there are different spotlights and methodologies with the common objective of working in a more efficient way, improving legal processes.
Also, technology cannot be seen as an objective itself, but as a facilitator, as Eva Bruch pointed out recently “Artificial intelligence must be used to solve specific problems; under no circumstances must it guide the firm’s strategy”, and I cannot agree more with this.
Innovation when defined as a strategical objective of legal departments, needs to be supported from the General Counsel’s role, and count with enough budget. The pace of change is accelerating exponentially, and to be ready for more complex scenarios it will be indispensable to cooperate with other areas of the company, as well as to promote collaboration between team members.
About the Author: Gloria Sánchez is the Head of Transformation of Banco Santander Legal Department. She is in charge of innovation and strategy of Santander legal area. Prior to her current duties, she assumed different responsibilities at Banco Santander, such as advising the global real estate areas, equity participations and portfolio sales.
Previously she worked as lawyer at Clifford Chance Madrid.
She is currently associate professor at Instituto Empresa, and in the past she has been an associate professor of corporate law at Carlos III University of Madrid, among others. Her experience includes real estate, M&A, project finance, as well as strategy and innovation.