Dentons - Just the highlights: Looking at risk differently - your toolkit to operational change and cost reduction

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Just the highlights: Looking at risk differently - your toolkit to operational change and cost reduction

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In-house teams around the world are operating in an environment where the dynamic often expressed as doing “more for less” could not be more true. Workloads are increasing, budgets may be shrinking and it may often feel like there is just no more stretch in that band to give. At the same time, there is no margin for error and little to no margin on quality or service.

The challenges faced by many law departments are clear drivers for operational change, but they are very much interlinked and can create a domino effect if you do not address them more holistically. When you pull one lever to solve a particular challenge, it can often trigger another problem which can lead to additional risk in another area.

However, the expectation for cost reduction and operational efficiency still exists. Our presenters highlighted how you might approach this challenge.

Understand your current state

As with any transformation project, you need to begin by understanding your current state, including your current capacity and capabilities. The best way to approach this is to talk to your legal team. Understand the situation from their perspective – what are the day-to-day pain points and frustrations? Are they working at their optimum level? Who is doing what work? Do you have a suitable set of skills based on the workload?

Integrate the corporate strategy

Approaching operational change within the law department should be done in the context of the overall business strategy for your organization. Aligning your legal department operating model to meet the current and future needs of the business ensures you are setting yourself up to deliver the value that is needed, while understanding and mitigating the potential risks.

Map risks and issues

As you assess the gap that exists between your current state and where you need to be to support the business strategy, it is important to also consider and assess the potential risks to the organization and whether your function is equipped to manage or mitigate those risks. Take the time with your legal team to map out current and potential risks and value those based on likelihood vs. impact.

Five key tools to consider in your roadmap

It is more than likely that as you consider your operational roadmap you may be evaluating ways in which to remove barriers to revenue generation for the organization by streamlining your contracting function. These are the five key tools shared by our presenters. The risk/benefit analysis of each tool was discussed in the webinar session.

Precedents

You may already have some degree of precedents in use across your law department, but taking the time to review and incorporate best-in-class industry standards while incorporating corporate brand and values, and ultimately streamlining to reduce the number of precedents, is a fairly sterile but very worthwhile exercise in terms of return on investment.

Playbooks

Going hand-in-hand with precedents, a playbook is intended to set out guidelines and educate members of your legal team (or an outsourced service) on specific aspects of your contracts, including your desired position, fallback positions and the redlines you will not go beyond without senior escalation. Consider having a playbook for some of your core contracts.

Contract and document automation

While we know that technology will never be a cure-all, using software to take standard contracts and enable the production of the initial draft with pre-populated information forms can be a worthy investment for your legal team, enabling the business to be more self-sufficient. The key is to make sure you are starting with a good precedent.

Self-service tools

Enabling the business to draft contracts can be a huge operational efficiency win as it should ultimately reduce the amount of time that a lawyer needs to be involved in the process. This is a great opportunity for you to think through, within the context of your risk appetite, what you will let the business have access to, provided they have support from good precedents, playbooks and automation.

Artificial intelligence

The good news is that robots are not likely to take over your job – at least not yet. However, artificial intelligence (AI) is developing quickly and can help speed up the production of a first draft, giving you a head start and saving time and money. It is important to understand your risk threshold, particularly in this context, recognizing that AI has many limitations, as it is not going to produce the same quality as a human – at least not yet.