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Deloitte Legal Management Consulting A changing world requires a new approach to law By Deloitte Legal Content The Deloitte Approach—Legal Management Consulting 01 Measuring Value 03 Strategy 04 Legal Risk Management 05 Operating Models 07 Legal Process 10 Sourcing Strategy 11 Selection 14 Technology 15 Data 18 Roles 19 Predicting the Future 21 Managing Change 23 Supporting Research 24 Foreword Companies need their legal teams to keep pace with the commercial needs of the business—while at the same time, legal departments are increasingly being asked to do more with the same or fewer resources. Today’s corporate General Counsel (GC) faces multiple challenges: a heightened regulatory environment, mass globalisation of business, and acceleration of technology advancements. This is resulting in increased complexity and demand from the business which is creating an unsustainable workload for existing in-house legal departments. The current business landscape creates a compelling reason for legal departments to rethink their operating model, achieve greater efficiencies and increase the value they deliver back to the business. This paper is intended to present GCs with a variety of opportunities for transforming their operating model to a desired state. Piet Hein Meeter The Deloitte Approach—Legal Management Consulting The Deloitte Approach— Legal Management Consulting The legal world is transforming and Considering an in-house lawyer’s need for Our research suggests that in-house Deloitte Legal is developing the tools rigour and process in legal functions, we functions are under unprecedented to help legal businesses during this decided to draw on our experience in tax pressures, both internal and external, to transformative time. and apply the TMC methodology to law demonstrate value, manage risk, contain practices. When we suggested this idea costs, embrace new ways of working, Deloitte’s work on Legal Management to lawyers, we uncovered a considerable introduce technology, operate globally, and Consulting (LMC) was inspired by two overlap and synergy. When we raised the align with their organisations. It is a time of quite different factors: possibility of LMC during research and transformation. It is time to transform. discussions with in-house counsel, the 1. The first was our study of the global feedback was encouraging. legal market. We interviewed General Counsel (“GCs”) and conducted formal LMC is a new approach and a new research with GCs, CEOs, CFOs, and discipline, developed for lawyers by lawyers other senior executives and identified and other experts. It builds on mainstream a growing need for a much more management consultancy, risk advisory disciplined and systematic approach services, as well as tax management to the management of in-house legal consulting. LMC is a collection of models, departments. frameworks, and systems to help in-house lawyers run their departments more 2. The second factor was our work efficiently and comprehensively meet their during the past decade in the field business needs. It is an attempt to capture of tax management consulting. countless person-hours of management Deloitte’s Tax Management Consulting and consulting experience into a set of (TMC) is now a global, multidisciplinary services and tools. Similar to TMC, LMC service that assists tax departments focuses on operating models, technology, and tax directors with strategies, and work-sourcing, and cost management. advises them on operating models and technology. 1 The Deloitte Approach—Legal Management Consulting External Drivers Internal Drivers Rising cost of Do more with less— legal services without sacrificing quality Becoming a strategic Globalisation business partner Corporate Legal Department New Exponential Imperatives organisational technologies risks and exposure Increased Changing talent regulations models and needs Mergers and Multiple locations Acquisitions and geographies LMC is designed to help GCs manage and transform their departments in a controlled and methodical manner, to move from fire-fighting and piecemeal changes to a more structured transition. This paper provides an overview of the issues that LMC addresses, of the solutions on which we are working, and of our thinking so far as we explore new territory in the legal services arena. The plan is for Deloitte to develop LMC together with our clients. 2 The Deloitte Approach—Legal Management Consulting Measuring Value One of the great unanswered questions in through the following three potential key the world of law is how practitioners can performance indicators: Summary demonstrate value to their clients. In tax, 1. To compare the legal costs (internal and there is less of a challenge because tax external) of similar businesses • Deloitte’s LMC team is experts can quantify savings that flow from committed to help General a given tax arrangement and point to the 2. The costs of work done in law firms as Counsel demonstrate and effective tax rate as a definitive indicator of against in-house departments measure the value they bring performance. 3. The costs of work undertaken to their companies traditionally by lawyers in contrast with Unlike tax experts, measuring the alternative providers. (This can include • Deloitte’s LMC specialists aim contribution of lawyers is less obvious. new labour models or technology- to put in place practical tools How does one place a numerical value on based solutions) to help in-house lawyers build a disaster averted, a dispute preempted greater value into their services or a breach avoided? Such comparisons are undertaken informally today on the basis of limited • In-house lawyers should give While we do not have all the answers, it data. Our aim is to provide better tools for thought to and expressly is our intention in the coming years for this analysis and access to superior data articulate the unique value our LMC specialists to contribute to the sets—using machine learning techniques that they offer ongoing debate and develop practical tools rather than informal benchmarking. to help in-house lawyers build greater, demonstrable value into their services. Our research also indicates that listening Our tax and consulting experience will more intently to the end-users of a legal Users also want to be able to monitor offer some guidelines and we are already service helps to identify the benefits they progress on their legal work. New engaged with our legal risk specialists, expect. The recipients of legal services techniques can help here—from who have long been concerned with the should be asked what tangible value they global reporting and dashboarding, to business benefits of avoiding rather than expect and the legal business’ contribution standardisation and process mapping— resolving problems. Recent work with should be measured against those each enabling greater control, increased major legal departments confirms that expectations, as well as more intangible insight, and improved levels of compliance. their tools and techniques can be adapted ideals of legal precision. A rough and for other law practices. We also plan for informal but practical guidance delivered In-house lawyers should also consider and our economists to create productivity early is often preferred to exhaustive articulate their value, such as their unique measurements for legal businesses. legal analysis submitted at the tail end experience, insight, and expertise. of a project. Users of legal services often A number of important distinctions can seek qualitative value (reassurance, peace already be identified. While we currently of mind, and confidence) rather than do not have the models to quantify the quantifiable value (savings and revenue). absolute value of lawyers’ contribution, it is possible to assess relative contribution 3 The Deloitte Approach—Legal Management Consulting Strategy We have learned that many external and The purpose of strategic thinking is to in-house lawyers are wary of the subject of set direction and priorities for an in- Summary strategy because it often sounds like jargon house department and align them with broader department strategies within and irrelevant to legal advice. • The purpose of strategic the organisation. It is also essential to put thinking is to set direction It is true that strategy is sometimes in place realistic plans for the changes and priorities for the in-house dressed up in complex terminology, but required. These plans should be based this need not be the case. Our experience partly on the values and culture of the department that align with from the Deloitte Tax Management department, although they may not have the broader strategy of the Consulting practice has shown us that been expressly articulated in the past. In organisation large part, the strategic direction should there is a practical approach to strategic • Our emphasis in strategy planning which has greatly enhanced the also be driven by a robust analysis of the work is generally on the work of tax directors and tax departments. legal needs of the business and, vitally, next three to five years with We can use similar techniques in law. the main legal risks that it faces. These risks may shift, but once the direction a focus not on short-term The contribution of LMC is not to is set, we will work together to select a fire-fighting but on long-term come to our clients and make specific preferred operating model, and establish health management responsibilities. recommendations. Strategic thinking • There are 10 elements of should not be outsourced to us or to any strategy to consider external consultants. Instead, the role There are 10 elements of strategy: of LMC is to provide a tried and tested direction, priorities, alignment, planning, framework for strategy work, along with values, culture, needs, risks, operating guidance from our specialists, so that model, and responsibilities. For each of in-house legal departments can plan these elements, LMC will provide tools future position strategies in a clear and and techniques to help in-house lawyers structured manner. make choices and plan for the future and formulate a high-level strategic view.
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