Defining The Best Corporate Legal Department

How does a company define the best corporate legal department? Good, better and best are subjective unless there are defined metrics across various criteria to define best.
The criteria to determine high-performing legal departments typically include qualitative and quantitative factors. For the former, qualitative factors, a key criterion is maturity in decision-making with data-driven insights. Insights that drive actionable decisions come from measurable data. The more metrics, the more data, the more strategic decisions, and the more maturity. This is one aspect of the best corporate legal department – maturity in decision-making. All of the criteria below contribute to high performance and advanced maturity in the best legal departments.

Criteria That Define the Best Corporate Legal Department

Here are some key considerations:

• Overall Cost Management. Cost management is the common thread among all legal departments because they are not a revenue center for the company. How well costs are managed determines the health of the department. It also determines the value delivered by the law department to the enterprise.
• Legal Spend Cost Management. Another common thread for all legal departments is legal spend. A company may be large and require 2,000 lawyers on the legal team, or they may be mid-sized and only hire 50 lawyers. Regardless, there will be legal spend to cover complex matters and to supplement the work by the in-house legal team. Legal spend budgets need to be awarded by the company, forecasted by the department and tracked by the enterprise legal management platform. How well a legal department manages these critical factors contributes to the value and regard of the legal department.
• Use of Technology. Understanding how technology influences the best corporate legal departments contributes to growth, collaboration and success. Deploying an enterprise legal management system is one of the first recommendations by advanced technology providers because it is a collaborative platform with various applications that contribute to the best corporate legal departments. Such a system includes matter management integrated with contract lifecycle management, ebilling tools and financial management, vendor management, analytics and reporting, and more. The right software contributes to cost savings
• Benchmarking. Legal operations professionals can utilize benchmarking databases to review the status of legal spend against competitors. Law firms, particularly, that want to be in the running for corporate bids should look at partner hourly fees versus the same-sized law firm and practice areas.
• Delivering Value (based on costs). Value doesn’t have a price tag, but when you affix the cost per matter or the cost per lawyer in the legal department, it becomes easier to associate a price tag on the esoteric nature of value.
• Success Rate. There’s no better measurement for the best than a win rate. The success of the legal department’s matter win ratio, favorable contract negotiations, and other measurable legal experiences contribute to defining the best corporate legal department. Clever and innovative legal strategies that benefit the company are also considered successes.
• Talent and Leadership. If legal department leadership builds the best legal team with excellent talent, then the legal department will experience high ethical standards, continuous improvement and a culture of excellence. This happens with hand-picked legal talent who bring high interest in representing the company with a thirst for continuous growth.
• Internal Client Feedback. The best corporate legal department is fueled by its services to internal clients. Whether the business units react positively or with other feedback, the best corporate legal departments receive client feedback with open arms so that satisfaction is guaranteed.
• Diversity, Equity & Inclusion. The current political environment has placed a target on companies’ DEI initiatives. That doesn’t always hold for privately held companies; however, there are new strategies to keep such programs hushed. Do not publicly advocate for them should attention be placed where it’s unwelcome.
• ESG Initiatives. Another area that may bode poorly for unwanted attention is Environmental, Social and Governance. ESG matters in companies with high reputation and brand value. Those that encourage strong ESG practices often enjoy better reputations, increased consumer trust, and even more business opportunities. On the investment and financing sides, ESG factors are monitored and considered by investors. Those companies with strong ESG performance may have better access to capital and more favorable financing terms. Risk management also comes into play. ESG factors can help identify and mitigate risks that could impact a company’s long-term viability, such as regulatory changes, environmental disasters, or social unrest.
• Strategic Alignment. The best corporate legal departments are not flying solo. They integrate with the entire business in close alignment with strategic goals. Any legal advice delivered throughout the enterprise is done so in support of business objectives and continuous improvement.

To be considered the best corporate legal department by the enterprise, the department must excel in the areas listed above. It must also take the time to become recognized through industry awards, “best places to work,” peer recognition, or benchmarking studies. They achieve this status by continuously improving their processes, leveraging technology, and aligning closely with the business's strategic goals. Leverage the right technology to meet success goals. Contact us to learn more.