Leading with Legal Agility
The perception of lawyers sitting quietly in the last seat of the table, checking contracts, managing risks, and doing nothing else, lasted for many years. However, the reality is changing rapidly today as commercial legal transformation pushes lawyers to the center of the scene. Organizations adopting this trend tend to grow, make deals quickly, and establish good connections.
What Does Commercial Legal Transformation Actually Mean?
Commercial Legal Transformation, at heart, involves revamping the operations of a legal department by leveraging technology, efficiency, and a business-oriented perspective for the betterment of results. It is not just the implementation of new technology. It is the reorientation of the thinking and working styles of lawyers within an organization.
This can be illustrated by saying that while a conventional legal department may say, “Here are the risks,” a transformed one will say, “Here are the ways we will manage the risks while closing the deal.” This fundamental change in approach is the essence of Commercial Legal Transformation.
Why It Matters for Growth
Slow contracts break deals. Ambiguous agreements give rise to disagreements. Inundated legal departments cause bottlenecks. This is not merely a legal challenge; it is a business challenge.
When businesses make investments in transforming their commercial legal functions, they will speed up the process of dealing with contracts, save money on disputes, and allow lawyers to concentrate more on strategic issues rather than administrative matters. Sales professionals will close deals quickly. Financial experts will have clearer figures. Management will get better insights.
“Legal departments which keep pace with businesses will be one of their biggest competitive strengths.”
This statement is backed by research carried out by top global consulting firms, which reveal that those businesses with advanced legal operations processes record low ratios of cost per contract and quick time-to-revenue performance.
The Indian Story
Consider the Tata Group as another great case study. One of the largest corporations in India, the Tata Group has interests in steel, IT software, automobiles, and consumer products. Consequently, they dealt with immense contractual complexity around the world.
Over the last several years, the Tata legal operations teams, more specifically, those of the TCS group (Tata Consultancy Services), made significant investments in the areas of contract lifecycle management and legal operations management. Standardising contracts, automating contract approvals and building deal-related dashboards for business teams was their focus.
As a result, they closed deals faster, reduced deal escalations, and transformed the legal function into an enabler for revenue generation. The legal operations team at TCS started to work hand in hand with sales and delivery teams an excellent example of commercial legal operations management leading to enterprise-wide results.
The above approach is now setting an example for mid-sized companies and startups in India, especially those in Bangalore or Mumbai.
The Building Blocks of a Transformed Legal Function
Business law transformation is not an immediate process. It is based on four critical pillars:
Technology: Automated systems, including contract management software, electronic signatures, and automated legal document review software, eliminate human errors and manual intervention.
Process Management: Well-designed playbooks for common business transactions, clear escalation paths, and service level agreements make things more efficient for the organization.
Culture: Lawyers who are familiar with the commercial aspects of legal transactions become advisors rather than gatekeepers.
Metrics: By analyzing metrics such as legal cycle time, disputes, and legal spending, leaders get visibility into how the process is performing.
What Holds Companies Back
Although there are many benefits to such transformation, organizations take time before moving into this direction, due to internal opposition from attorneys concerned that they may be replaced, a lack of funds to adopt the technology, and misalignment between lawyers and business-people.
For those who have gone through this process, the key is not budget, but mindset. The moment the general counsel learns to talk business and legal at the same time, the rest is easy.
The Road Ahead
Transformation of the legal function within a commercial environment is not optional anymore. Companies which succeed in implementing an agile and aligned legal function will prevail in highly competitive and sophisticated environments.
The boardroom is now welcoming the legal function. However, the legal function must be prepared to assume a leadership role.
This requires the general counsel to take part in product strategy discussions. It requires the legal function to identify opportunities rather than risks, to draft contracts in days rather than weeks since the processes were created with the business at its center, not the opposite.
Corporate growth soon won’t happen through passive legal teams protecting the firm. It will happen with active legal teams building the firm. This is what commercial legal transformation really means. Companies that are heading in this direction already have a leg up on those who are just getting started.
The debate about transforming the legal function is over. The question is how quickly this will be done.