The evolving role of corporate legal teams in business success

In the realm of day-to-day legal matters within private organisations, the traditional practice of appointing in-house legal counsel has been the norm, and a vast number of lawyers and advocates are actively engaged in this domain. At present, corporate lawyers are actively playing vital role in shaping decision-making processes in such private enterprises. Amid the dynamic corporate governance landscape, legal teams are no longer solely seen as guardians of compliance; they actively contribute to the mitigation of legal consequences and the enforcement of established norms. This shift is attracting more law students and apprentice lawyers toward envisioning their professional futures within corporate legal practice.

Generally, corporate legal teams provide quality legal advice, protect the business from risk, and enable enterprise goals, etc. However, merely accomplishing these goals falls short of portraying the legal department as a true partner actively driving the business forward.

Acknowledging the pivotal contribution of in-house legal counsel to corporate governance and compliance is crucial for organisational success. It is imperative that regulatory bodies and the government proactively take steps to establish comprehensive guidelines for corporate legal practices.

Some legal teams, trapped in a conventional mindset, grapple with rigid adherence to precedent, hindering their agility in offering tailored solutions to the diverse challenges of the modern business landscape. Simultaneously, certain organisations or business teams prioritise business objectives over compliance, creating obstacles for legal teams trying to integrate effectively.

Today's lawyers are navigating complex and uncertain times as their profession rapidly transforms. If a corporate legal team is only sharing metrics around spending, then it is promoting itself primarily as a cost centre, understating its true worth, and undermining its function as a strategic partner to the rest of the business. The Future Ready Lawyer Survey 2023, conducted by Wolters Kluwer finds the legal industry navigating a period of unprecedented change, in which social and technological trends are transforming it like never before. According to the survey, key trends expected to have a significant impact on legal organisations in the next few years are growing complexity within compliance areas, increasing importance of legal technology, the growing impact of generative AI, coping with increased volume and complexity of information and meeting changing client/company leadership expectations.

According to the survey conducted by the Thomson Reuters Institute, the delivery of legal advice is crucial. Corporate legal team operating with a more commercial mindset are proactive in ensuring that advice is presented as a course of action, rather than as one option among many, delivered in business-ready language, and presented in the context of the wider business goals. Most importantly, the legal department is sufficiently embedded in the business so they can proactively suggest new legal opportunities and strategies to their business colleagues. Crucially, corporate legal teams need to demonstrate their success to senior leadership and the board.

Corporate legal teams must acknowledge that in an era of rapid change and complex challenges, relying solely on traditional approaches can impede the legal system's adaptability. In The Bramble Bush: On Our Law and Its Study, the author, Karl N. Llewellyn, underscores the importance of understanding the underlying principles and purposes of the law rather than just memorising rules, using the metaphor of the "bramble bush" to convey the multifaceted nature of legal issues, highlighting the need for a flexible and analytical approach to understanding law. The 2021 UK Supreme Court ruling in Uber Technologies, Inc. v Aslam & Others., classifying drivers as workers, further highlights the need for contextual analysis.

Acknowledging the pivotal contribution of in-house legal counsel to corporate governance and compliance is crucial for organisational success. It is imperative that regulatory bodies and the government proactively take steps to establish comprehensive guidelines for corporate legal practices. Adhering to the High Court Division's guidance to amend the Company Act 1994, by mandating companies to appoint a permanent legal officer and a consultant experienced in company law could be a vital stride towards reinforcing the evolving role of corporate legal teams in fostering business prosperity.

The writer is corporate legal practitioner.