The corporate world has never moved faster. According to a study published in the Harvard Business Review, one-in-three companies will be delisted in the next five years. Companies need to constantly reinvent themselves, their products and their markets if they want to sustainably grow. But what does this world of rapid change mean for in-house legal departments?

Trends Impacting In-House Legal Departments

It's impossible to outline the full extent of changes impacting corporations—there are just too many. But there are a few trends that have dramatic consequences for how legal departments will need to transform in the years ahead.

1. (1) Increasing Corporate Demand for Legal Services. As the volume of M&A increases, regulatory changes promulgate and a greater percentage of corporate wealth depends on a legal basis (e.g., intellectual property), the demand for legal services will only increase. We estimate that demand will increase 85 percent between 2016 and 2020, putting pressure on in-house legal departments to increase provision of cost-efficient legal services to the company.
2. (2) Changing Client Consumption Patterns. As executives face an increasing array of decisions to be made, they need confidence that they are receiving the right set of information (or have the right way to distill information). In this world, legal departments need to “productize” their expertise so it can be consumed at the time when executives are making a decision. This means the way legal guidance is delivered to business clients must change. Increasingly, legal departments need to apply the user-centered design to their “customers” and embed guidance and self-service capabilities into workflows at the right decision points. This is the only way that legal can keep pace with and streamline enterprise decision-making and failing to do so may result in a firm-level drag on productivity.
3. (3) Corporate Digitization and Artificial Intelligence (AI). Legal departments have not been bastions of innovation. Historical legal technologies have saved lawyers time by better organizing department work (e.g., matter management, e-billing), but they have never replaced the time-consuming effort of forming legal judgments. The advent of machine learning will change this dynamic. For the first time, it will be possible to “download” legally trained minds and bring them to scale. Legal's adoption of this technology will be important, as “analog” functions will become an increasing drag on corporate speed. Going forward, legal department productivity will depend on defining and codifying the algorithm of legal judgement.
4. (4) Cybersecurity and Privacy. As the value of information increases, so too does its potential risks. In-house legal departments will find themselves on the front lines of cybersecurity and privacy concerns, interpreting regulatory mandates, consumer sentiment and working with Information Security. General Counsel, in conjunction with other corporate executives, will need to develop information governance policies and corporate data strategies for their companies. The organizations that can protect privacy and sensitive corporate information while simultaneously providing the business with strategic freedom and simple processes to confidently use data will gain a competitive advantage.

Legal in 2020