In-house legal teams have long been viewed as impediments to business progress, often being left out of key decision-making processes due to their perceived risk-averse nature and tendency to slow down projects. A recent study by the Association of Corporate Counsel and Everlaw has shed light on this ongoing issue, revealing that business units often make strategic decisions without consulting their legal teams.

The Perception Problem

The study found that 58% of cross-functional partners view legal departments as slowing down projects, while 41% see them as too risk-averse. This perception often results in legal teams being brought into initiatives only after most strategic decisions have been made, with 47% of respondents stating that business leaders involve legal in important initiatives late in the process.

To change this perception, legal departments need to align more closely with business functions and improve communication with other senior executives. This alignment is crucial for legal teams to become true strategic partners with business units. Legal departments should also streamline processes, implement automation, and clearly define their roles and responsibilities to increase efficiency.

The Role of General Counsel

General counsel plays a crucial role in changing the perception of legal departments. They must engage in conversations with other senior executives to align goals and risk tolerances, ensuring that everyone is on the same page. These discussions should then be socialized throughout the organization to clarify roles and responsibilities.

The Importance of Risk Evaluation

Legal departments must also adopt a more realistic approach to risk. Instead of aiming to eliminate all risks, they should focus on mitigating risks while understanding that some level of risk is necessary for business growth. Prioritizing risks based on their likelihood and potential impact is also essential.

The Proactive Approach

Ken Callander, Managing Director of the legal consulting firm Value Strategies, suggests that in-house legal staff should adopt a more proactive approach by embedding lawyers into business teams. This approach can help build relationships with business unit managers and ensure that legal is involved in the decision-making process from the start. By doing so, legal teams can help prevent mistakes and fix problems before they arise.

In-house legal teams have the power to change the perception that they are roadblocks to business progress. By aligning with business functions, improving communication, streamlining processes, and adopting a more realistic approach to risk, legal departments can become true strategic partners with business units. The proactive approach of embedding lawyers into business teams can also help build relationships and ensure that legal is involved in key decision-making processes from the start.