Key priorities for in-house counsel - how are you driving value?
Key priorities for In-house counsel: How are you driving value?
Legal departments are almost all unanimous in the view that they deliver value to the business through risk management, with 92% saying it was one of the top six most important functions they provide. Other roles which rank highly on that list of priorities include supporting commercial objectives, being a strategic advisor, ensuring effective corporate governance and being a business partner. Only half of respondents cited defending litigation as being a top value-add to the organisation. Similarly, identifying potential claims is even lower down the priority list, with only 15% considering this a key part of their role.
Top priorities for legal teams.
Say risk management is one of the key roles legal teams provide.
“It’s generally a settlement approach ... from a cost perspective unless the case is very strong it's a very explicit cost benefit analysis”
General Counsel at a major retailer organisation
Most legal teams, embedded into their company culture, tend to adopt a settlement approach to disputes, often coupled with keeping in line with budget mandates.
The main goal is to manage risks to avoid disputes, or settle them as soon as possible and at a reasonable cost.
When disputes arise, the preferred approach by in-house lawyers is settlement to avoid the reputational risks and costs of litigation.
For the General Counsel we spoke to, the focus is really on protecting business interests.
Many in-house counsel come to litigation feeling as though it’s not their bread and butter. Dealing with disputes is not a core talent of their legal teams which has been built around the other top strategic functions.
“I don’t self identify as a litigator”
- Legal Counsel
Why are legal teams not perceiving disputes management as a strategic priority?
Many legal departments don't view litigation as a way to deliver on the goals of their company but rather as a negative or distraction of resources - both from the legal team and the wider organisation.
Most legal teams would have to convince their leadership - and themselves - about ways to overcome reputational risks associated with litigation, perceived unpredictable costs, and uncertainty of outcomes. For some organisations, leadership may avoid disputes which are perceived as too aggressive towards commercial partners or in a given sector.
Most legal teams have not yet implemented any commercial metrics, such as revenue or profitability targets regarding their disputes, indicating that most do not perceive commercial opportunities that might exist here.
In that context, most legal departments manage litigation on an ad-hoc basis with few formal processes surrounding evaluation of the merits of cases.
“Because at the end of the day, we want to ensure that our internal customers are happy, and they're satisfied with the services we provide.”
- Belinda Lucas, Head of Legal, Verisure
Believe it is not possible to predict litigation costs accurately.
Did not consider a potential claim to be a company asset or a revenue opportunity.
Time poor
It's clear legal teams don't feel they have the time and resources to pursue claims because they're focused on delivering on strategic priorities and firefighting business as usual matters.
Most teams find it would require an effort to deliver training to their internal stakeholders related to litigation best practices including privilege, and the identification of contractual or regulatory breaches.
