Evolution of the in-house legal department: Today’s greater challenges

I’ve been working within the legal industry in one role or another since the early 1990s.  When I first started, legal departments collected only paper for legal discovery purposes.  While there obviously were underlying electronic files and email represented in all that paper, it wasn’t generally exported to digital format for review back then. Obviously, a lot has gone on since those days! Let’s review.

The in-house lawyer

One big trend over the years is the continued growth of lawyers working in-house for corporations.  In 1980, only 10% of American lawyers were working in-house.  In fact, in-house lawyers have actually grown 7.5 times faster than law firms from 1997 to 2017. A large driver for this change has been to reduce the cost of hiring and retaining outside counsel for many specialties that are now more commonly seen as divisions within the corporate legal department. 

In the early days, legal departments were often used as a go-between for outside counsel.  Now the environment is thriving with robust teams covering as many areas of the law and specialty functions as any big law firm.  We really started to see this change after the 2008 financial crisis – and this could have caused this industry to retrench, shed headcount and reduce resources – but it actually went completely the other way by generating more headcount and investing in internal resources and ultimately saving on outsourcing costs.

The advent of eDiscovery

While many within the legal industry at the time where well ahead of this moment, the 2006 amendment of U.S. Federal Rules of Civil Procedure formally added definition and structure around “electronically stored information.” This amendment was 10 years in the making!  As these rules were adopted all or in part across individual States, this put to rest the dispute that paper versions of ESI were good enough.

The importance of the metadata associated with natives, including document history, track changes, speaker notes, authors, editors, and more, was pivotal to the legal discovery process.  But this also has its drawbacks.  The astronomical growth of electronic data across the board.  Year-over-year, data grows so quickly that it is now estimated that 90% of the world’s data was generated in the last two years alone.  In the past 13 years, it has grown 60x and is now up 120 zettabytes (that’s 120 billion terabytes!).  And this is expected to increase by over 150% in 2025.

The dilemma with this unprecedented growth was how to manage it, including tracking it, putting rules around what is maintained and for how long, securing it, removing redundancies, and so much more.  And the Legal Department also needed a means to identify data for legal hold, safely collect it when the time comes, cull and filter it, and so on.  There are great software applications out there that support these individual needs, such as OpenText Legal HoldTM for legal hold management and Axcelerate InvestigationTM for early case assessment.  But this volume of data dispersed so widely across an organization requires more of a top-down management system.

Information governance

With the advent of eDiscovery and the growth of electronic data, there came a dire need for data management of some kind.  Over the years, this has evolved into something called Information Governance.  This system provides policies and procedures for the management and tracking of data throughout an organization.  In addition to containing growth of data, ensuring its security, and removing redundant systems and software, Information Governance is invaluable to the Legal Department.  It ensures legal compliance, provides mechanisms for putting legal holds in place and collecting data for discovery.  By its nature, its efficiencies play a direct role in reducing expenditures and potential risks associated with eDiscovery.  It is no wonder that Information Governance teams often fall under the purview of the Legal Department.  Even the EDRM has developed a reference model for Information Governance.

Graphical depiction of the Information Governance Reference Model.

Legal Operations used to be considered a luxury department for big corporations, primarily responsible for managing outside counsel costs and risk management.  As Legal Departments began to invest in itself with new headcount and growing internal resources to mitigate external costs, this particular team began to invest in technology for their growing legal team and later became a lynchpin for all things innovative.  This team runs the Legal Department like a business and often manages in-house eDiscovery teams, legal technology consultants, project managers, managed review, efficiency experts, compliance managers, and financial managers.

Legal Operations are always on the hunt for metrics that feed into their systems to track efficiency gains and trends that can be exploited for improved systems.  A great use case for Magellan Business Intelligence and ReportingTM (“MBIR”), which is baked into Axcelerate Review & AnalysisTM and allows for tracking many metrics across entire portfolio of eDiscovery databases.  Another challenge for Legal Operations is having a robust process for managing and collaborating on sensitive legal work product with applications like OpenText eDocsTM

To sum up, the face of the in-house legal department has changed vastly over the last two decades, surviving and thriving along with major industry changes.  In many respects, in-house legal teams have led the way to changes in industry practice, efficiency gains, and practical use of current technology.  Take a look further at OpenText’s Legal and Compliance web page to see some additional Legal Department trends.

Heidi Amaniera

Heidi Amaniera is a Director in LegalTech Professional Services with world-wide leadership responsibilities over off-cloud and public cloud implementation, enablement, managed services, and consulting for Axcelerate. Heidi’s background includes management of eDiscovery services within both the vendor and law firm environments. She also spent over 15 years as a seasoned litigation paralegal specializing in Intellectual Property.

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