20.07.2018 | KPMG Law Insights

“Legal as a Service” – The Future of the Legal Department

“Legal as a Service”- The Future of the Legal Department

Will the legal department be the business partner of the future? Internal expectations of in-house lawyers and the range of services required are becoming increasingly extensive. For legal professionals, this means a deeper understanding of corporate issues as a whole, new qualifications, and, first and foremost, a changed self-image.

The internal demands on legal departments are enormous. The company naturally demands the avoidance of corporate liability, advice on legal issues of all kinds, but in the meantime also a broad, comprehensive risk management. And, of course, in high quality, proactively, as quickly as possible and with concrete added value for the relevant area or the entire institution. Measuring performance by means of KPIs is also becoming more and more of an issue. As well as the explosion of costs in the legal department due to the multitude of tasks.

On the other hand, the external framework conditions to which legal departments are subject are changing constantly and have been changing very massively for some years. First of all, the big buzzwords are usually regulation and technological development, or more precisely digitization along the entire value chain. But new business models, the internationalization of organizational structures and the question of the best minds on the market also play a role.

Internal Business Partner

So what are the demands on legal departments? Management expects a deep understanding of operations. It is no longer just a matter of getting information from the subject matter experts on the relevant legal issues in a current case and then taking on the project. The lawyers should be closely interlinked with the business units as a whole on a permanent basis, see themselves as part of the value creation of the company and thus as having a responsibility. They become internal business partners.

As a strategic partner, the legal department should in particular have a handle on potential risk factors. Governance in the sense of preventive risk management is becoming an increasing part of the task spectrum, and knowledge of the control environment and the determination of controls are essential.

The structural changes in requirements are manifold:

  • Clear elaboration of the business mission
  • Assumption of governance responsibility in the second line
  • Proactive risk identification
  • Integration into the control logic of the company
  • Specialization along the process chain, not along the technical fields
  • Process-oriented activity spectrum
  • Establishing a digitization strategy
  • Connection to the company data pool
  • Novel ways of communication

It is nothing more or less than a cultural change that companies and other institutions are currently undergoing with their legal departments.

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Dr. Konstantin von Busekist

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Head of Global Compliance Practice
KPMG Law EMA Leader

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