Focus on…What does transformation mean for legal departments?

We are living in a very fast evolving world, one crisis after another with accelerating speed. This situation forces many companies to transform. But what does the process of transformation mean for legal departments and how does this process affect them?

In my experience transformation has two different impacts on legal departments: first, the business is in transformation, and you must advise on this new business, and second, the process of transformation of the legal department itself. Both are very important to strengthen the company for the future.

Considering the first point, business, many companies, which are not founded recently and already equipped with a digital mindset, face the important need to transform their businesses. Funke, one of the biggest media groups in Germany, has been focused almost only on print magazines and newspapers in the past. With the beginning of the digital era, Funke was, very early, forced to reinvent itself regarding the fact that information and journalism got independent from its carrier medium and got much faster. Information in the newspaper was already outdated when the newspaper was delivered the next day. German newspapers made the mistake to offer journalism for free in the beginning of the online and app era. Consequently, the media business must face different challenges at the same time nowadays.

What does this mean for the legal department advising such a media business? It must familiarise itself with new areas of law, following the developments of new business models. Therefore, joint venture and M&A transactions come into focus. All this is surrounded by challenging antitrust law requirements because the strategy of cooperations is often pursued between players which are active in the same relevant market.

On the transformation of the legal department, this is divided into two different aspects, the cultural and the digital aspect. Regarding the cultural aspect, one of the challenges is to convince all team members to adopt a new governance guided and service-oriented mindset. In my opinion, modern legal departments should be trusted advisors, meaning they stand close to the business, with a service-oriented mindset and clear in their advice. An answer or advice can describe possible risks, but much more important, should include a clear recommendation with focus on the needs of the business. If this recommendation is not possible, there should always be alternatives pointed out.

Regarding the digitalisation of the legal department itself, there are various tools that can be introduced, like digital matter management, digital and automatic billing management, digital signature, intake management, contract management or an automatic KPI-system. All of them need a software, but much more important, the underlying processes and working methods in the department must be aligned, structured and standardised.