Legal teams are a mission-critical component of every organization's infrastructure, helping them ensure compliance, mitigate risks, and protect assets while offering strategic guidance in complex legal matters.
But like unsung heroes, their contributions often go underappreciated, especially in organizations where leaders lack a deep understanding of the scope, intricacies, and value of legal functions. To these stakeholders, deliverables from legal teams aren’t as tangible or immediately apparent as outputs from sales and marketing.
“The legal department was often seen as a hallowed black box where no one really understood what they did.”
~ Janet Taylor-Hall, Chief Executive of Cognia Law
Additionally, legal teams have, over time, cultivated a stereotype of being overly cautious, risk-averse, or obstructive to business goals, infamously labeled “the department of nos.”
This has led to a widespread underutilization of legal expertise in driving business success and mitigating potential legal pitfalls. To remedy this, legal teams must take proactive steps to showcase their value and recalibrate perceptions within organizations.
In this guide, we’ll explore some proven strategies legal teams can adopt to achieve this.
The role of legal teams in organizations
At its core, the legal function is responsible for ensuring that organizations operate within the boundaries of the law and adhere to regulations governing their respective industries. This involves providing legal counsel to various company departments and executives, consequently helping them make informed decisions and minimize risks.
On a broader scale, the following are some crucial roles legal teams play in organizations.
#1 Contract management
Contract management involves drafting, reviewing, negotiating, and maintaining legally binding agreements between businesses and customers. Legal teams play the role of ensuring that contracts protect their organization's interests, clarify rights and obligations, and minimize potential disputes with vendors, clients, and partners.
Also read: The Ultimate Guide to Enterprise Contract Management
#2 Compliance and risk management
Legal teams are tasked with understanding the legal and regulatory framework applicable to the organization's operations. They develop and implement compliance programs to ensure the company follows all relevant laws, regulations, and industry standards.
Also read: What is Contract Compliance? The Ultimate Guide
Legal teams also bear the responsibility of managing varying degrees of risks for their organization. They identify potential risks, assess them, and advise relevant stakeholders on the right decisions to make.
“To me, a risk only matters if it's material. If it’s immaterial, I don’t care about it. If it's likely to occur but it's not very costly, I probably don't care. If it's unlikely to occur but, man, if that meteor hit the earth today, it would be bad—I also don't care. It's just not likely to happen.”
~ Jonathan Franz, Head of Legal, Crunchbase
Navigating Economic Turbulence and Thriving in Chaos
#3 Litigation and dispute resolution
When legal disputes arise, the legal team represents the organization in court or alternative dispute resolution proceedings. They work to resolve conflicts efficiently and, if necessary, enforce decisions made by the court or arbitrator to protect the organization's rights and interests.
Also read: Finding Common Ground—How to Resolve Contract Disputes
#4 Intellectual property protection
Legal teams safeguard the organization's intellectual property rights, such as trademarks, patents, and copyrights. They manage the registration process and take appropriate action against infringement to protect the company's valuable assets.
#5 Corporate governance
Legal teams often help in establishing and maintaining an effective board structure, providing guidance on director responsibilities, board committees, and the overall governance framework.
They also work closely with finance and accounting departments to ensure accurate and timely reporting of financial information to shareholders and regulatory authorities. Additionally, legal teams are instrumental in developing and implementing the organization's code of conduct and ethics policies. They play a role in promoting a culture of integrity and compliance throughout the company.
Why legal teams struggle to prove their worth
Despite being a critical function in modern business, the legal function may sometimes suffer a bad rep among organizational teams and stakeholders. In some cases, the legal department is even regarded as a cost center rather than a revenue center.
As a legal professional, this probably feels unfair. But to find a remedy, you must first understand the possible causes, some of which are discussed below.
“Some companies just think of legal as a bit of a blocker, but we're quite the enabler if we do it right.”
~ Adam Glick, ex-Head of Legal, Intercom
Cultivating Meaningful Connections for In-House Legal Success
#1 Traditionally long turnaround times (TAT)
Legal processes, such as contract reviews or regulatory compliance checks, can take time. When stakeholders feel that the legal function slows down decision-making, it can lead to frustration and a perception of obstructionism. This is demonstrated in the infamous “cold war” between sales and legal teams. The sales teams need to close deals as fast as possible, but legal teams also need to identify and plug every legal loophole associated with the contract.
The relatively long TATs often frustrate impatient sales team members and can sometimes make them close deals without involving the legal team. This can undermine the value of legal functions in the organization, putting legal teams in reactive (rather than proactive) positions.
#2 Difficulty in quantifying deliverables
Legal work often involves complex matters that are not easily quantifiable in monetary terms. Unlike sales or marketing departments that can measure success through revenue generated or the number of customers acquired, legal teams deal with issues such as risk management, compliance, and litigation prevention, which are not that straightforward to measure.
Consider a legal team that successfully controls a potential contract dispute, preventing a costly lawsuit. While the organization saves money in legal fees and potential damages, it's hard to determine the exact amount of money saved because the case was prevented from happening in the first place.
“You are not going to be rewarded for making smart business decisions that no one will ever see. When you mitigate risk, when you avoid a problem, no one is ever going to say, ‘good job,’ for avoiding that problem because the problem never came to fruition. But that's doing a good job. You're making good, ethical, smart decisions.”
~ Charlotte Morgan, CLO & CAO, Adore Me
Leveraging Entrepreneurial Experience as a CLO
#3 Barriers to communication
Legal professionals often deal with intricate regulations, statutes, and case law, and this specialized knowledge can create a barrier between legal teams and their non-legal colleagues.
When legal discussions or documents are filled with technical terms, it becomes challenging for people in other departments to fully grasp the implications and importance of legal decisions or advice. This lack of understanding can lead to underappreciation of the legal department's role and its potential positive impact on the organization.
“Even though you’re from legal, you can't speak legal jargon in meetings. Translate your legal opinion to an easy-to-understand business rationale. And for this, legal counsel needs to learn relevant business terms and KPIs. Translate into their terms, not just yours.”
~Ryan Nier, General Counsel, Pinwheel
Putting Legal on the Map in a Hypergrowth Startup
#4 Preventive nature of legal functions
Legal teams often work proactively to prevent legal issues and potential risks associated with various business relationships. This often results in multiple disapprovals and long review processes.
While this is in the best interest of their organizations, it doesn’t always sit well with stakeholders from other departments. This has led to the legal department being described as the “department of nos.”
“The legal team should not say ‘no, the transaction can’t happen.’ Rather, they should explore ways wherein the customer-facing team member could approach the transaction in a way that does not break any laws. Once the legal team makes the transaction happen by finding a workaround, the notion of them not being approachable will fundamentally change.”
~ Sandeep Chowdhury, Group GC, HCC Ltd.
Transforming the Legal Function at a Large Enterprise
Also read: How to enable collaboration between legal and business
Key strategies for demonstrating the value of your legal function
The world of modern business is constantly changing, consequently influencing the dynamics of business operations across industries. In the face of technology advancements, increasingly convoluted consumer journeys, and evolving industry policies, legal teams are more under pressure than ever to step up and make their worth more apparent in organizations.
If you feel your legal team's efforts are underappreciated, the following steps will give you insights on how to better demonstrate the value of your contributions, so you can finally get the flowers you deserve.
#1 Define your legal function and its alignment with organizational goals
The first step is to return to the drawing board and reassess your team's role and function. What's the nature of your operations so far? How have you approached situations in and around the organization?
What are the fundamental goals and objectives of the company, and how has your role contributed to bringing the business closer to these goals? This can be through risk mitigation, compliance, intellectual property protection, and support for business expansion.
By answering these pertinent questions, you’ll be able to present a clearer picture of how your legal function benefits the organization.
“Most people think that the role of a legal department is to negotiate contracts and reduce risk to the business. But we have a much greater charter, and educating the business on our role is critical to our success.”
~ David Lancelot, ex-VP Global Head of Legal, eBay Classifieds
Embracing Legal’s Role as Business Co-Leaders
#2 Develop a means for measuring and communicating performance metrics
Traditionally, the legal team's deliverables are often considered intangible and challenging to measure. Without a way to quantify outcomes, it'll be tough to recognize how much value your legal team has brought to the company.
There are a few ways you can achieve this, though.
You can develop your performance metrics by narrowing down outcomes from a broader perspective. For example, you can consider the number of contracts closed within a certain period and highlight specific metrics like contract approval rates, dispute resolution outcomes, contract cycle time, and other KPIs related to your legal function.
Also read: 4 Contract Management Performance Metrics to Measure Success
Additionally, you can track all the potential legal issues your team has identified and proactively mitigated over a period of time. This can include prevented contract disputes, regulatory violations, etc. Then provide an industry-verified estimate of what each legal issue would typically cost the organization. This enables you to demonstrate how your team has helped your organization save costs.
#3 Build strong internal and external relationships
Collaboration is vital to demonstrating value. Legal teams should establish strong relationships with other departments, acting as proactive partners rather than mere rule enforcers.
Try to actively participate in cross-functional projects, get deeper into the fabric of your organization's business operations, understand how your colleagues work, and make contributions beyond your legal function. By doing so, your value becomes more apparent, and you gain credibility across your organization.
Additionally, building positive relationships with external stakeholders, such as clients, suppliers, and regulatory bodies, enhances your team's reputation and influence, making you more capable of moving the needle in critical situations.
“Legal should be pushing businesses forward, not just receiving tasks. So, if a legal team doesn't equally view themselves as part of the business, actively making business decisions along with the marketing, product, and finance teams, then the symbiotic relationship between legal and business is lost. And I question really the value of legal over the long term of a company unless I can propel it differently than it's operating today.”
~ Megan Niedermeyer and Brenda Perez, Apollo.io
Aligning Legal's Limitless Potential to Business Goals
#4 Provide benchmarks and industry comparisons
Dive into data regarding the average performance standards for legal functions in your industry, drawing comparisons from competitors and similar-sized organizations.
By benchmarking key performance indicators (KPIs) like response times, contract review times, litigation success rates, and compliance adherence, a legal department can assess its own performance objectively. If the legal function's metrics are on par with or better than industry averages, it shows that the department is operating efficiently. Otherwise, it reveals areas of improvement, offering opportunities to enhance the legal function's overall value to the company.
Generally, benchmarking provides valuable insights for decision-makers, stakeholders, and executives to appreciate the legal department's contribution to the company's success and its ability to keep pace with industry norms and standards.
#5 Encourage proactive functions over reactive approaches
Legal teams should focus on being more proactive in their day-to-day operations. This involves staying ahead of changing regulations and compliance requirements, helping the company avoid penalties and reputational damages associated with non-compliance.
It also involves collaborating with stakeholders, being supportive, offering valuable insights, and encouraging them to route all relevant decisions through the legal department. By doing so, the legal team will spend more time on productivity and fewer resources on damage control.
Also read: Positioning Your Legal Team as Key Asset in Times of Uncertainty
Tips for enhancing your legal team's value
From battling high-stakes corporate disputes to navigating complex regulatory frameworks, the value of an exceptional legal team cannot be overstated. However, in your quest to demonstrate your worth, you must continually seek ways to enhance your value and efficiency.
Here are some tips to consider:
#1 Innovate with technology
Digitization offers a degree of advantage to organizations and professionals, helping them streamline processes and achieve results more efficiently.
As a legal professional, you must identify ways technology can revolutionize your team's operations and help deliver more value for your organization. For instance, in contract management, you can leverage a Contract Lifecycle Management (CLM) platform like SpotDraft to streamline contracting processes from end to end.
The platform allows you to automate review and approval processes, spot errors and risks with laser-sharp precision, and cut down contract cycle times by 50%. It offers a collection of robust and customizable templates you can leverage for certain contracts so your business teams can safely close more deals with minimal delays.
Additionally, SpotDraft's insights and analytics tools reduce the hassles associated with quantifying your legal team's performance. You can automatically generate reports highlighting crucial metrics like total contract value, average turnaround times, renewal rates, and more.
Also read: How to Use Contract Analytics Software to Uncover Insights
Other digital systems you can leverage to enhance productivity include e-discovery tools, legal research databases, and case management systems.
#2 Invest in professional development and training
This can include workshops, seminars, webinars, conferences, and industry events focusing on legal topics and emerging trends. By investing in professional development and training, your team will be better equipped to address complex legal issues and provide valuable insights to clients and stakeholders.
More importantly, your professional development and training should spread beyond the walls of the legal industry. It is advantageous to learn the fundamentals of business, customer relations, and effective communication.
Armed with these extra competencies, you’ll grow from being just the company’s legal team to an indispensable group of business growth partners.
Also read: Top Contract Management Training and Resources in 2023
#3 Be responsive and accessible to stakeholders
Your office should not be siloed away from the rest of the organization. To solidify your role as an indispensable ally in your organization, you must maintain high accessibility and willingness to offer insights on key business decisions.
By establishing a reputation for responsiveness and accessibility, legal teams can build trust, enhance communication, and showcase their commitment to supporting the organization's objectives. Also, consistently offering audience and insights to stakeholders establishes you, over time, as a strategic partner and influencer within the organization. Trustworthy legal advice and support inspire confidence in decision-making, making it more likely for stakeholders to follow legal guidance and recommendations.
“By doing 1:1s with stakeholders, my team members not only get familiar with short-term and long-term business objectives but also take progressive steps toward accomplishing those objectives. The business grows, of course, but at the same time, my team members grow in confidence when they see how their contributions have bolstered the revenue stream of the company.”
~ Sandeep Chowdhury, Group GC, HCC Ltd.
Transforming the Legal Function at a Large Enterprise
#4 Engage in cross-functional projects
Participating in cross-functional initiatives allows legal teams to demonstrate their versatility and ability to contribute beyond traditional legal matters. This involvement showcases the team's holistic understanding of the business and its dedication to supporting organizational success.
As already stipulated, you must be intentional about professional development to make meaningful impacts in cross-functional projects.
Engaging in cross-functional projects doesn't only help legal teams demonstrate their versatility, it also enables them to creatively integrate legal considerations into business decisions.
Cross-functional projects also foster the cross-pollination of ideas, helping the members of various teams to exchange insights and help each other grasp the nitty-gritty of running the company's business from a well-rounded perspective. This enhanced business acumen positions legal professionals as valuable contributors to the organization's growth and success.
Furthermore, by engaging in these projects, legal teams can build stronger relationships, break down silos, promote a more cohesive and integrated organizational culture, and improve their overall effectiveness.
Changing the perspective around corporate legal function
Legal departments are definitely not cost centers. However, they need to do a better job of demonstrating the value of their contributions to their organization's bottom line.
Beyond proving your worth to stakeholders, you must take proactive measures to ensure you remain on top of emerging trends in technology, law, and business. That way, you continue to ramp up your value and remain a mission-critical factor for your organization’s success.
If you’d like to get a close-up view of how SpotDraft can help enhance your productivity and help you deliver more value for your organization, feel free to request a personalized demo from our team. Click here to begin.
