The roles of general counsel and chief legal officers have drastically transformed over the past decade. Now, in addition to providing legal expertise, general counsel often oversee business strategies and have a much broader scope of responsibilities. The New Role General Counsel and Chief Legal Officers Must Play was the topic of a recent webinar presented by Jim Michalowicz, Senior Manager at TE Connectivity, Ltd., Michael Hamilton, JD, Senior Managing Director of Marketing at Exterro, Inc., Scott Milner, Esq., of Morgan Lewis, and Chris Colvin, Founder & General Counsel of In The House, LLC.
The faculty began by discussing the move in recent years towards redefining legal departments and treating them more like businesses, which involves determining how to make them more efficient and effective to increase the return on investment. In part, this requires an evaluation of ways to maximize the value of outside legal services, assessing whether non-attorneys can fulfill certain roles, and exploring resources such as artificial intelligence and technology.
The discussion then turned to challenging workplace developments caused by economic downturns over the last few years. A recent study indicated many general counsel worry about the impact on their departments of these financial pressures, including layoffs, reduced budgets, and decline of business in the near future. The economic pressures a company faces vary depending on the industry. For example, in the current environment, travel industries will likely face much greater challenges than healthcare companies. Legal departments are evaluated, in part, on their costs relative to the overall budget of the company, and when revenues decrease, it places pressure on the legal department to maintain a proper balance.
In an effort to reduce corporate legal costs, many legal departments have reduced their use of outside law firms. The faculty explained that legal departments considering this option should have candid discussions with the law firms they employ to determine how to maximize the return on their investment. Essentially, the pandemic leveled the playing field as most people are working from home, and the differences between large and small firms are less evident. The illustration of the similarities of firms that bill at drastically different rates may provide legal departments an impetus to evaluate whether the outside firms they employ are providing valuable services or if they should consider more cost-efficient options.
The faculty advised that e-discovery and pre-litigation activities are two areas where in-house legal departments can cut costs and effect significant savings. For example, in-house counsel can use e-discovery more efficiently by tracking key performance indicators and can cut costs by outsourcing e-discovery. The panel noted that even small legal departments should have e-discovery experts. Legal departments can create a framework for handling certain types of cases and use strategic case assessments to evaluate the merits and weaknesses of a claim, the risks and benefits of proceeding, and how resources should be allocated.
The faculty then touched on privacy laws and their impact on legal departments. Data privacy is largely considered a right, and legislation is increasingly being passed to protect it. Despite that fact, many legal departments struggle to resolve which privacy laws apply to their companies and whether there is a need for significant improvements regarding privacy policies. Companies with inadequate policies are prone to data breaches, however. To that end, there needs to be greater communication between the legal team and other departments regarding cybersecurity. It is also helpful for one person on the legal team to be in charge of developing and deploying cybersecurity measures.
You can access the webinar here.