Agents of change at the intersection of business and law
Legal department leaders drive change through innovative approaches to the biggest challenges facing organizations
By Lucy Saddleton, Managing Editor, ADB Insights
In a complex operating environment, legal department leaders are playing a critical role in balancing risk management with growth for the organization. As new challenges and alternative business models emerge, legal teams must continuously act as agents of change by evolving their innovation strategies to mitigate risk and and grasp new opportunities for the business.
The recent profound disruption of AI, together with increased competition, inflation and environmental awareness, has contributed to new risks across industries - and new responsibilities for general counsel.
“It used to be that a general counsel’s role was to block and tackle for the organization with respect to the laws out there,” says Av Maharaj, VP, legal and corporate affairs at the Kraft Heinz Company. “Now general counsel are expected to add significant value and take on different functions.”
Av Maharaj, VP Legal & Corporate Affairs, Kraft Heinz Company
The legal team at Kraft Heinz has partnered with outside expertise, particularly in the AI space, and they are asking law firms and other external partners to be more innovative with billing practices and the ways in which they add value to the business. Immersing legal into the entire business is also key, Maharaj says.
“We have stopped looking at ourselves as dispassionate from the business,” he says. “While we have a unique role and unique obligations in the enterprise, our role is not to block and tackle any more, but to add value by seeing over the hill to the next challenge. You have to have an understanding of the business, and you have to use the law to your advantage in order to advance your organization,” he adds.
Maharaj will be speaking on this topic at the Legal Innovation Forum in Toronto on May 15.
Other challenges facing legal departments this year include sourcing top talent and finding the right external support and ideal billing arrangement.
“Finding the optimal model has certainly been a challenge. Do we deal with a few firms or spread the wealth?” says Anthony Ruffolo, AVP, general counsel and corporate secretary at Honda and Honda Financial Services. Ruffolo is also speaking at the Legal Innovation Forum in Toronto.
Anthony Ruffolo, AVP, General Counsel + Corporate Secretary, Honda and Honda
Ruffolo’s approach is to select external counsel partners in a specific practice area who can provide value, as opposed to favouring one firm. The remote working landscape has made it easier to find the optimal choice for each purpose, from a competency and pricing perspective - albeit someone from a different geographical location.
General counsel are increasingly embracing technology, particularly with regard to workflow management in the hybrid working environment.
“We’ve implemented a number of new tools to track workflow so that leadership in the legal function can see when a file was opened and track the progress and determine how many hours were spent,” says Ruffolo. This also allows business partners to track the matter in real time, he adds.
Engaging with business partners to support the organization and help drive change is a key part of the role of legal department leaders. Ruffolo and his team regularly hold legal awareness sessions to help educate business partners on the role of the department and encourage them to reach out.
“It helps the business spot potential landmines and risks so that they are a bit more proactive and will be more likely to approach legal when they are engaging in certain matters, so it really helps from a risk management perspective, and it also helps establish that rapport,” says Ruffolo.
For Sandra Perri, SVP and general counsel at Sun Life, the role of legal department leader has become more about strategic advice and less about pure legal advice in recent years.
“Paying attention to what’s happening in the external environment has become more relevant” says Perri, who will also be speaking at the Legal Innovation Forum in Toronto. “There’s an expectation to be more technology-savvy and digital in our approach, and even more multidisciplinary in our skillset than we had been previously.”
Sandra Perri, SVP + General Counsel, Sun Life
Advancing technology provides legal teams with the opportunity to grow their capabilities and skill sets by taking on new roles within the organization, and allows in-house counsel to help shape business outcomes.
Perri notes more emphasis on cross-training and coordination between teams and business groups, to allow for a more seamless experience in helping the organization achieve its goals.
“We embed ourselves in every level of the business, from executive leadership tables right through to working group forums, to make sure we’re working in lockstep with our partners to understand short, medium and long-term goals and how we can best support them, and anticipate and manage risk in real time,” says Perri. Being open to continuous learning will allow teams to enable and support change and innovation, while managing risk, Perri adds.
The evolving business landscape has created new priorities for the legal sector, generating a rise in alternative business models that allow for flexibility and remote or hybrid work.
According to Anoop Dogra, managing partner at Simplex Legal, one of the key challenges for legal departments is managing ever-increasing law firm rates. As a result, they are increasingly seeking flat-fee arrangements or other alternative billing plans.
Anoop Dogra, Managing Partner, Simplex Legal
Dogra - another speaker at the Legal Innovation Forum on May 15 - advises in-house legal departments to consider fractional help from a company like Simplex, to alleviate the burden of a full-time hire or the cost of law firm support.
“Companies need to think about what their staffing needs are,” says Dogra. “Getting someone in as a permanent resource may not be the only solution available to them. The advantage of a flexible model is that when things slow down, we can have a conversation about whether or not they still need that resource.”
Of course, there are risks associated with seeking help from an alternative business model, so it is important for in-house teams to do due diligence to ensure that the lawyers they are considering hiring are capable and competent.
“There are a lot of providers in the market who have a flashy website and a splashy ad campaign, but at the end of the day, you have to dig down and find the substance,” says Dogra. “The challenge from the perspective of legal departments will be finding the right balance between cost efficiency and service, so they’re not sacrificing service and efficiency for the sake of cost.”
Hear more from Maharaj, Ruffolo, Perri and Dogra at the Legal Innovation Forum in Toronto on May 15. Register here.