It is only natural that employees from several areas of the company have legal doubts on a daily basis. These issues can range from a specific clause in a supplier’s draft that seems overly onerous, to uncertainty about the legality of collecting information in light of data protection laws.
The company, on its turn, is interested in mapping and mitigating the legal risks to which it is exposed. It is very common for an irregular routine to stay hidden in an operational area until it emerges in the form of major litigation or reputational damage. At this point, there is little you can do other than face the adverse consequences.
Therefore, in-house legal departments absorb the advisory function in a quite spontaneous and necessary way. The simple presence of a lawyer in the company’s payroll creates the expectation that these professionals will clarify doubts and supervise the regularity of the business operations.
Performing this task is not always as simple as it seems, and managing this flow inefficiently can undermine a function that is essential for the smooth running of the enterprise.
Three most common inefficiencies in in-house legal advice
Sometimes, the mere idea of consulting the Legal department gives rise to conflicting feelings. When a response is well presented and generates value for the company, the Board of Directors, the requesting department and the lawyers themselves are satisfied and have a sense of accomplishment. It almost makes you forget how difficult it was to reach that positive outcome.
Some of the most common inefficiencies have an early beginning:
1. Informational asymmetry
The complaining sector has some idea of the problem they want to solve, but does not know what information the Legal department will need to understand the situation and offer a solution. So, they usually sin by lack or excess.
In the first scenario, it will be necessary to respond to the request, asking for more information, which delays the analysis and the much needed answer. In the second scenario, it is difficult to understand the story and important details can go unnoticed in the long emails exchanged.
There are also everyday elements that the requesting area assumes are known to the Legal team, when in fact they are not. These points may include, for example, particularities of the product or service marketed by the company, necessary to understand the request, but about which lawyers have only a vague notion.
These situations translate informational asymmetries that make it difficult to consult the Legal Department.
2. Lack of visibility
Once the email has been sent, or information has been requested, the demand becomes practically untraceable. The requesting area does not know when it can expect a response, and the Legal Department, if it asks for more details, also has no prediction about when it will receive them.
In addition, it is rare for the requesting and requested areas to keep reliable records of all required and completed consultations.
This uncertainty and unreliability is caused by the lack of visibility into the workflow. As a result, employees become more anxious, which then makes for a potential source of friction between areas of the company.
There is a widespread impression that one department does not understand the urgency of the other, or that its priorities are not aligned with those of the corporation. Each attributes to the other the label of “slow”, “bottleneck of operations” and “source of risks”, deteriorating the dynamics of the company as a whole.
3. Inefficient work allocation
Within the Legal department, an efficient allocation of consultations will take into account the Lawyer’s expertise, the request’s degree of complexity, the relationship of that issue to some other matter previously faced, and others.
However, these considerations are difficult to achieve when receiving demands via e-mail, for example. Or, even if the demands are centralized, it is possible that this stage becomes a bottleneck if the workflow is not optimized.
The consequence of this unproductive arrangement is the low use of jurists' expertise, the concentration of demands and the overload of employees.
For these and other reasons, the contact with the Legal Department often translates into a love-hate relationship. The requesting department is happy with the answers that solve its doubts, but it has to cross a path paved with inefficiencies to reach these results.
More efficiency on what's under your control
Some objective factors influence the complexity of the procedure to request the Legal for advice. They involve, for example:
- Company size;
- Number of possible requesting areas;
- Variety of issues;
- Urgency of demands, and others;
These points will invariably be present in any workflow that establishes a connection between the Legal department and other areas of the company.
There is not much that the manager can do to mitigate them and interference in this sense can be counterproductive. Limiting the number of departments that can request advice, for example, will reduce the number of issues raised, but will eventually leave some areas of the company unattended. It is therefore not a good long-term solution.
However, not all problems are inherent to the size of the company or to the nature of the queries. Situations such as information asymmetry, lack of visibility and inefficient work allocation can be solved and even anticipated using CLM software such as netLex.
The logic of CLM, or Contract Lifecycle Management, is to manage a workflow from the beginning to the end. In the case of asking for Legal advice, this means that a software coordinates all parts of the process, from request to response, through analysis and review.
A good CLM software such as netLex contains features which include:
- Intuitive and simplified questionnaires, from which it is possible to issue requests, ensuring that all the information necessary for it’s understanding and answering will be available in advance;
- Automated workflows, which forward the demand to the lawyer specialized in the area and, if necessary, to the supervisor for review and approval;
- Visibility and full recording of all stages in the consultation process, including deadlines and users responsible for the analysis;
- Extraction of data to generate intelligence, in order to provide the management with the number of requests received, areas that requests more consultations, most frequent issues and others.
The first step, then, is to face the problems that are effectively under the manager's control, and choose a good CLM software to help with this task. This unlocks the full potential of your company's lawyers, allowing them to generate more value with planned and strategic action.
To understand other points that may be straining the Legal Department's relationship with other areas in your company, read more at:
- Contract management at the sales team: are you creating problems or solutions?
- The value of connections: contracts as coordinators between areas of business
- Top 6 most common inefficiencies in contract management and how to address them
Legal Department: your great business partner
Imagine if all areas of your company had a quick, simple and secure channel of communication with legal professionals. And that all the questions presented were received, studied and answered in a timely, coherent and complete way.
This scenario is not only possible, but also reflects the true vocation of corporate lawyers. However, the love-hate relationship that forms around the inefficient management of consultations hides this potential and causes your Legal department to not be seen as the business partner it is.
Platforms such as netLex help your company to achieve all this potential, dealing with the main inefficiencies that reduce your Legal Department’s effectiveness.
To understand, in detail, how netLex applies to your company, come talk to one of our experts!
