Defining tomorrow's legal function through its relationships

What does tomorrow’s legal function look like?

To face the complexities of the next decade, in-house legal functions are considering how they relate to the business and deal with digital transformation. To gain a better understanding of what the in-house legal function of our clients could look like in the future, Clifford Chance facilitated a discussion around this topic with some of the world's leading businesses.

We worked with RSGI who spoke to a number of leading in-house counsel and their teams to gather views on the changing nature of their roles, the relationships that shape their work and the challenges they face.

Eight key relationships that will shape the legal team of the future were identified. The goal for in-house legal functions is to identify how these relationships can interconnect and become intentional, rather incidental. This is captured in a new framework; the relationship model.

This is a report for in-house legal, by in-house legal. We hope the insights galvanise further discussion and invite you to the conversation.

Hear from the participants

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"Like other C-suite functions, the modern legal department needs to build lines of communication with the employee stakeholder group. Being proactive in reaching out to them and keeping a close eye on socio-economic trends is now an essential component of being able to properly advise any business"

Horacio Gutierrez, Walt Disney Company

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"Legal is already a front-line function and has to take a leadership role with 3rd party stakeholders. It is a critical component of the value we can deliver to the business but Legal has to stand up and be counted. It's on us to take the initiative."

Mark Gregory, Rolls Royce

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Active-legal-2025_Maria_Varsellona_1300x880px

"As GCs, providing a safe psychological and non-hierarchical environment for the many different professionals that now work in Legal is a priority. I like people to express themselves and give full visibility to my team with the Board, not just the management committee."

Maria Varsellon, Unilever

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"Personal relationships are still important but a degree of automation of the client-lawyer relationship, through greater use of platforms, will allow Legal to collect data and drive market pricing, consistent delivery and manage the legal function like a “business” with a P&L and demonstrable financial impact with far less focus on the billable hour."

Nassib Abou-Khalil, Nokia

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"The budget challenge in digital transformation is not trivial. The way I like to think about it is to harvest budget efficiency and then use that to invest in new capabilities focused on effectiveness."

Chee Kin Lam, DBS Bank

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Relationship with:

Employees

Employees are an increasingly important stakeholder group. Legal has a role in bringing the employees’ voice into key policy decisions and communicating with them on societal issues. Legal also plays a critical role to make the company a better place to work, enabling employees to live its values and behave ethically.

"Like other C-suite functions, the modern legal department needs to build lines of communication with the employee stakeholder group. Being proactive in reaching out to them and keeping a close eye on socio-economic trends is now an essential component of being able to properly advise any business." Horacio Gutierrez, Disney

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Stakeholders

The range of stakeholders with which Legal has active relationships is broadening. From shareholders to suppliers and NGOs, Legal will develop a more external-facing role. It will lead in relationships with government and advocacy groups and, in some companies, interact with external customers. The ESG agenda and trend for Legal to run corporate affairs, is making its relationships more collaborative and its influence more high-profile and multi-layered.

"Legal is already a front-line function and has to take a leadership role with 3rd party stakeholders. It is a critical component of the value we can deliver to the business but Legal has to stand up and be counted. It's on us to take the initiative." Mark Gregory, Rolls Royce

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Knowledge

The in-house legal team assumes thought leadership positions in its company, industry, government and society, using its understanding of commerce, law, technology and policy to solve complex business and social challenges. It is also a driver of positive change in the legal profession, working with academia to develop the next generation of talent and spread best practice in topics such as diversity and inclusion to anti-corruption approaches.

"Legal needs to take thought-leadership positions and be more active in influencing and shaping new law and the development of the profession. Our ability to combine business and law will be needed more than ever in the future." Dr Andreas Liepe, BMW

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Data and technology

The legal department has an established data infrastructure. Data is connected across the business, enabling legal to work with sales, procurement and other data to derive insights and create predictive modelling. Legal’s value to the business is measurable. Technology in legal is interoperable with the business, enabling low-risk, high-volume legal matters to be performed through self-service tools. Business processes are not hampered by Legal.

“The budget challenge in digital transformation is not trivial. The way I like to think about it is to harvest budget efficiency and then use that to invest in new capabilities focused on effectiveness.” Chee Kin Lam, DBS Bank

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Business

Lawyers are embedded in business units to act as co-creators of products and services, but the legal department remains a separate function reporting to the top corporate lawyer called the CLO. The legal team delivers an experience to internal business colleagues, using automation and self-service so lawyers can focus on high-value, strategic advice. Legal delivers data-driven commercial insights and is clearly recognised as an enabler of revenue growth.

"Moving to an agile way of working has helped Legal prioritise and be more effective. We now mirror the business in terms of the way they work. It also means we use our own resources more effectively." Jennifer Roberts, Telstra

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Legal function

Legal provides flexible, portable careers to in-house professionals. Teams are made up of cognitively diverse groups with as much as 30% of the department made up of professionals who aren’t lawyers. Legal acts as a role model and influencer in the business for diversity and inclusion matters, with a strategy focused on creating psychological safety at work.

"As GCs, providing a safe psychological and non-hierarchical environment for the many different professionals that now work in Legal is a priority. I like people to express themselves and give full visibility to my team with the Board, not just the management committee." Maria Varsellona, Unilever

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External advisers

Legal uses an automated system to choose external lawyers from a small panel of advisers, in the main using alternative fee arrangements and transparent RFP processes. Service add-ons are quantified and diverse suppliers are the norm. At any one time, legal can see its external spend and has full oversight over all matters via a single front door and efficient triage systems.

"Personal relationships are still important but a degree of automation of the client-lawyer relationship, through greater use of platforms, will allow Legal to collect data and drive market pricing, consistent delivery and manage the legal function like a “business” with a P&L and demonstrable financial impact with far less focus on the billable hour." Nassib Abou-Khalil, Nokia

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Risk management

Legal risk management, or Legal’s role as business protector is changing. The focus of the 2025 legal function will be to protect reputation and help the business grow sustainably. Risk management will be principles-based and move from compliance and ethics to integrity. Data will inform risk approaches and internal colleagues will be encouraged to take more ownership for their exposures.

"Legal teams should focus on the outcomes and impact of its advice and learn how to quantify outcomes, impact and identify insights. This means taking a more data-centric approach. The first step is to institute a rigorous process to collect that data, making sure it is clean and the right data. If done correctly, you can then connect the outcomes and impact of your advice to the data and extract actionable insights from the data." Scott Offer, Flex

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RSGi

RSGI Limited is a global legal think-tank, specialising in research into how the legal industry can grow sustainably, and stay relevant and innovative. With a track record of many of the leading thought-leadership studies in the sector, including being the founder and content partner to the FT Innovative Lawyers Programme, RSGI is committed to driving positive change in the industry.

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Clifford Chance