Financial services firms are under pressure from all angles, from regulatory to Brexit to rapid business model changes prompted by Fintech startups. It is no surprise, then, that our 2020 Legal Risk Study found financial firms’ General Counsel (legal) function reexamining operating model responsiveness.
Legal knows the “new normal” for financial firms requires a hyper-focused, highly responsive legal function to navigate an unyielding pace of change. The legal functions of many financial firms have launched transformational legal change efforts to address a variety of concerns: cost cutting, right sizing the role of legal, and better automation of legal advice or work product using business logic.
Our 2020 Legal Risk Study found the financial services legal function looking for ways to support the business amid volatility. Here’s what they report:
Cleaning a financial firm’s legal “house”
More than half of respondents to our Legal Risk Study feel pressure to change their operating and service delivery model to better support urgent business needs and rapidly shifting priorities.
For many legal teams within financial services businesses, the function’s typical work has, over the years, grown to include non-core activities such as technology and training. We suggest sifting core from non-core, and outsourcing non-core work to an external managed legal service provider or technology vendor.
Nearly two-thirds of financial legal functions already are exploring this step. Activities and roles frequently shifted include basic legal research, contract life cycle management, legal entity regulatory reporting and e-discovery/litigation management support.
Legal teams also can review their service offerings. Non-essential services could include drafting and renewing routine contracts, an activity that can be outsourced to legal managed services providers. The legal function might also scale back its role in monitoring regulatory changes, which also can be handled by data or services providers that deliver a customized, automated regulatory update feed.
Delivering legal support at scale
Even after streamlining the legal function, the team might struggle to keep pace. But help is available.
Financial firms can boost lawyers’ efficiency by streamlining manual processes via workflow-based tools, automation and business process re engineering.Automation and other technology tools offer a promising opportunity for the legal function to accomplish more with less. But these tools are only a starting point. Training is essential, not simply around how to use new technologies, but how to maximize them. Lack of training can lead to confusion and poor user adoption rates, potentially wasting the technology investment.
What do 2020 Legal Risk Study respondents say about streamlining their financial services legal function?
Begin your legal transformation journey
Financial services legal teams understand the challenges they face and are eager to make their function more responsive. Outsourcing and automating—already popular solutions—can help significantly, provided they are deployed in approaches that increase their effectiveness.
Can you use help in defining your legal function’s operating model, or getting the most out of solutions you’ve implemented? Contact us to learn more.