We recap the top takeaways from our webinar with legal department leaders from DHL, UBS, Cognite, and Legal Mosaic.
What does it take for Legal to prove their value to the business? How can Legal be seen as a strategic partner and a value-driver instead of a cost center? And why should legal teams care about data?
We asked this and more to the legal leaders who have transformed the reputations of their departments by better demonstrating value to the business in a live webinar. Our session was hosted by Mark Cohen of Legal Mosaic and featured Mark Smolik, General Counsel of DHL Supply Chain, Christine Nilsen, Head of Legal at Cognite, Thomas Barothy, the former COO of Group Legal at UBS, and Michael Grupp, CEO and Founder of BRYTER.
Read on to learn what they had to say about demonstrating Legal’s value to the business, becoming data-driven, and going from cost center to value-creator. You can also view the full webinar on-demand.
What is the value of Legal to the business?
Before Legal can demonstrate value, it must first clarify what value means. Thomas Barothy began the conversation with the caveat that value can’t be uniformly defined for every organization: “For every setup, it’s important to have a specific definition for the circumstances you work in. But it comes down to relevant quality legal advice at a certain price point. That’s the definition of value.”
While setups vary, common themes resonate at most organizations. Here’s how Thomas outlined the six key elements of legal value:
- Be client-focused: Provide innovative but pragmatic and easily-consumed advice
- Protect the firm: Mitigate risks to the business
- Keep costs controlled
- Help the business generate revenue
- Shape industry standards with leadership
- Generate revenue directly by selling expertise on the market
For legal teams that are new to quantitative KPIs and wondering which are most impactful to adopt first, Thomas suggested cost and client satisfaction. These most directly support a business case for Legal getting the budget it needs to continue to grow and better serve the business.
Making the business case for Legal’s budget
Mark Cohen put forth his hypothesis for why Legal can struggle to win budget: “One of the reasons I think Legal sometimes doesn’t get the love that it wants is because a lot of legal functions frankly don’t make a very strong business case for justifying their budget.”
Mark Smolik expanded on this point by explaining that perceptions of Legal as just a cost center by the C-suite prevent the team from getting adequate budgets. So how can that perception be changed? “Think like the business,” Mark says. “I’ve spent considerable time deeply engaging with how the business does what it does – how do we make money? For our team to have a dollar to spend, the sales team must generate $30 of revenue, and that understanding echoes through everything we do.”
To drive innovation and have the legal team of the future, you need budget – and to get budget, you need to prove value with KPIs.
Michael Grupp, CEO of BRYTER
Legal can get creative to drive value: take on intellectual property pursuits, or propose incentives to promote job advancements. “Rather than focusing on one KPI or another, I’ve created a perception with the CFO that we are good financial stewards with our budget,” Mark explains. “We don’t come in over budget, and I get little pushback now. He knows we’ll be prudent with how we spend, and we’re identifying ways to mitigate risk and generate a greater profitability within the organization as a whole.”
Run ahead of the business
Christine Nilsen brought a complementary view of the value of Legal with her experience starting the first legal team at Cognite. She began by mapping the business’s needs while putting out fires.
“I found the bottlenecks, the lowest hanging fruit, where I could show value immediately. For example, I established order forms for the sales team; after they were adopted, I could show the business that the time for orders decreased by 80%. Once I showed value, they trusted me more and knew I wanted to move as fast as the business. I constantly tried to align,” Christine explains.
“My next steps showed them that Legal can use tech, and can think outside the box; I tried to show everyone around Legal that we can be a role model for more conservative departments. As a result, we’re running in front of Sales instead of behind them.”
Extract more value with data – and technology
The panelists agreed that definitions of value all require one thing: Data, the new oil.
As Michael Grupp put it, “For the business, if you don’t measure it, it doesn’t exist. Business leaders want KPIs and the ability to measure the deltas between them. To drive innovation and have the legal team of the future, you need budget – and to get budget, you need to prove value with KPIs.”
Anyone who is ignoring the value of data is in a bit of a dinosaur position.
Mark Smolik, General Counsel of DHL Supply Chain
Christine agreed: “It’s important to make data meaningful for the business. At Cognite, we can now go into our contract management system and see how long it takes to close an agreement in general, and we can give that information to Sales, which helps them with their expectations.”
“The data that flows into and out of a corporate legal dept is basically the representation of the firm; there are not many critical data flows that wouldn’t cross a corporate legal department,” Thomas Barothy added.
Mark Smolik underlined this point, adding, “Anyone who is ignoring the value of data is in a bit of a dinosaur position.”
Capturing these data flows, however, requires legal teams to take initiative with technology – a step that can also help them scale. “Scalability is the holy grail,” Michael Grupp says. “Companies are becoming digital and scalable, and for Legal, the tech is there and it’s feasible to implement. Legal can stay a bespoke service while also becoming a more digital service center.”
The future of Legal as a strategic – and beloved — partner to the business requires going digital with the right tools. As Mark Smolik said, “The next generation of legal industry startups that are the most successful are going to figure out how best to help law departments and law firms organize their data so they can take away meaningful stories that they can act on to identify and mitigate risk.”
Bringing the love
For the business to love Legal, Legal has a few things to prove first. They must show that they can digitize their expertise and serve the business at scale, demonstrate efficiency gains and cost savings, define and hit measurable KPIs, and improve user satisfaction. All of this must be driven by a clear view of the data that flows through the law department.
Digital tools also provide the data that Legal needs to make further efficiency improvements and spot opportunities to generate revenue. These proofs of value (and shared values) will set Legal apart as an example, winning them budget — and the love of the business.
To learn how to start driving value for your organization with the right digital tools, get a demo of BRYTER today. Or if you want to learn how you can build self-service apps without any coding, read our guides to No-Code and Legal Operations.
