How corporate legal departments can set themselves up for success in 2023 and beyond

This article was originally published in Legaltech News.

As we head into the homestretch of 2022, corporate legal departments (CLDs) are beginning to set their sights on the year ahead. From budgeting to staffing, if you’re the head of a CLD, it’s crucial to have all your ducks in a row.

But now more than ever, success comes from balance. You need the right mix of short-term and long-term planning. You must outline optimistic investments and realistic plan Bs. And you need to keep existing employees happy while considering new ways to work with legal talent.

As you craft a game plan, consider the long term. Outline a flexible five-year plan that includes both goals and potential pitfalls. Take comfort that CLDs are facing far less economic uncertainty today than they were in 2020, but don’t take that for granted. Be ready for whatever might happen. Here are three steps to help you prepare.

1. Do more with more

For years, the mantra—driven in part by advances in technology—has been to do more with less. This myopic focus on efficiency was heightened during the COVID-19 pandemic, which spurred various cost-cutting measures within CLDs.

While cutting costs may seem like a savvy survival strategy, it’s actually a short-sighted one. As legal matters continue to grow in complexity, thanks largely to globalization, your department must know how to advocate for greater resources—not simply get by with less. It’s the only way you’ll be able to keep up.

Reducing legal spend is a worthy goal, but it can be self-defeating past a certain point because you can end up handicapping your department in the process. Instead, try employing advanced technologies, like AI-powered legal bill review, to gain better visibility into your legal spend and optimize your decision-making so you can save money without sacrificing outcomes.

2. Focus on retention

It’s no secret that the labor market remains extremely tight. The most recent data from the Federal Reserve showed two unfilled jobs for every person who was unemployed. Meanwhile, a survey by Bloomberg Law showed that about half of lawyers are either open to new opportunities or actively searching for them.

That’s why employee retention should be one of your top priorities. Retention isn’t rocket science: When employees have pleasant lives, they’re more likely to want to keep working for you. Unfortunately, working in the legal profession has traditionally been extremely taxing with long hours. Granting employees flexibility regarding how and when they work is a great first step to easing the intensity of their professional lives.

Relatedly, when it comes time to invest in new technology and processes, be cognizant of the impact they will have on employees’ day-to-day lives. Prioritize bill review and contract lifecycle management solutions, for example, to save employees time and help them make better decisions. Don’t make unnecessary changes, either. While e-billing offers tremendous benefits, switching e-billing systems tends to be more hassle than it’s worth.

In short, employees are holding all the cards right now; prioritize your technology investments accordingly.

3. Embrace ALSPs

If your CLD is struggling with headcount despite attempts to improve working conditions, consider using temporary attorneys through alternative legal services providers (ALSPs). Many ALSPs offer “rent-a-lawyer” services, as I like to call them, with well-qualified attorneys from a variety of backgrounds who can serve as embedded full-time resources that remove the need for a law firm while simultaneously avoiding a sticky W-2 relationship. This can be an appealing compromise between insourcing and hiring an expensive law firm: You have the same level of control, alignment, and intimacy as with a staff hire, but when demand wanes, the breakup is relatively painless.

ALSPs are particularly well-suited for e-discovery, and you should consider hosting all your own data for ALSPs to review. When law firms do discovery, on the other hand, it’s far more expensive, and they often expect to host the data themselves, fragmenting your corpus across dozens of law firms, driving up costs, duplicating efforts, and reducing your control. There are only two instances when law firms should handle discovery: if discovery is exceptionally minimal so bringing in another party is more hassle than it’s worth or if it’s a highly sensitive matter for which you want to minimize the number of people with access to the data.

Otherwise, using ALSPs for e-discovery and temporary staffing is a best practice all CLDs should implement as quickly as possible.

The bottom line

After a rough-and-tumble few years, CLDs are finally able to look down the road with some optimism, but that doesn’t mean you shouldn’t be prepared for additional bumps. Tactical planning decides what you’ll do in the short term. Strategic planning focuses on the long term.

To be successful in 2023 and beyond, CLDs need the right mix of both. Plan for the best but be prepared for the worst. And no matter what, put your employees first.