The European Green Deal, COVID-19, the United Nations report from their Intergovernmental Panel on Climate Change and a renewed focus on social justice are putting corporate ESG commitments to the test. While boards naturally tried to reduce costs when lockdowns and commercial restrictions were in place, investors, customers, regulators and other critical stakeholders kept up the pressure to better serve employees, customers, suppliers and communities in which companies operate while advancing the greater good. Emphasising ESG in business plans has turned out to be sound strategy. Investment funds that focused on sustainability last year outperformed traditional funds [see footnote] in the first four months of the 2021.
Yet the rise of ESG is happening in a changing economic environment that’s being accelerated by digital transformation. Things are both unsettled and moving faster — even as ESG expands the range of legal and business risks that General Counsels are expected to manage.
To respond effectively, many General Counsels are realising they need an expanded range of skill sets and greater flexibility in how they allocate resources to keep up with new demands.
Work as a space, not a place
What we’re seeing now is increased reliance on legal operations. Instead of treating the legal department as a physical location staffed with full-time permanent employees sitting at pre-assigned stations, legal is starting to embrace the idea of work as mix of on-site, remote, manual and virtual resources.
The blended operational models taking shape now resemble what’s happening in other areas of professional services, and of course in sectors like technology where agile thinking first emerged. Core teams are being augmented by resources and skill sets that can be kept on-tap and activated when they are really needed.
One of the outcomes of this shift is that General Counsels have gained more freedom to move up the strategic curve, disaggregating major initiatives such as M&A and leveraging outside resource to up-tier core teams so they can focus on more strategic tasks.
Splitting out activities into a hub and spoke model enables General Counsels to better allocate talent and scale teams according to capability. As a result, a more diverse range of skill sets in data science, technology, and operations is complementing traditional legal roles.
Finding people with those skill sets, engaging them, and creating a wider talent pool that can be dipped into as needs require isn’t straightforward. Trust, character, and reliability are essential requirements. That’s where connectors come into play.
Role of the connector
Professional connectors who work across the industry and understand how legal operating models are changing are becoming more important. They bring diverse thinking, a can-do attitude and a willingness to work with everyone to design solutions that address General Counsel’s ESG- and technology-driven challenges.
Those working in a law company, or alternative legal services provider, are ideally placed to act as connectors as they are passionate about blending expertise with the latest thinking to get the best result. Their mix of experience in law firms, in-house counsel, professional services and business processes has meant that they were amongst the first to see that General Counsels could learn a lot from operating models used in the outsourcing and technology sectors. Just as a CTO at a large company might need an expanded security team this month, additional project managers in Q3, or a scaled-up engineering team to accelerate a product launch; so law company leaders are encouraging General Counsels to embrace and flex diverse skills, behaviours and platforms to take on new challenges.
Tech, in particular, has embraced an agile talent model that can by sync’d to the needs of the business at any given time. With the right connector to help them switch on those resources effectively, there’s no reason why legal can’t do the same.
Role of technology
Technology’s operating model can be a source of inspiration, while technology itself becomes an enabler for agility.
As powerful as software can be, however, its use in a legal context requires co-habitation between human and machine. As the legal sector starts to embrace digital, General Counsels are still finding the right combination of tools, process redesign and skills they need. In my view what is needed are practical human-led solutions that align processes and leverage technology.
Connectors can help here as well, by helping General Counsels get past the noise and hype of tech sector marketing claims and suggesting solutions that generate efficiencies and deliver insights quickly when legal counsel is required to inform board decisions.
Coming in the next instalment: ‘The promise of hybrid models in legal operations: machines and people working in tandem.’
Footnote: WSJ, ‘ESG Investing Shines in Market Turmoil, With Help From Big Tech.’