It’s a universally known and acknowledged truth that every profession and industry faces some challenges. The legal industry and profession is no different.
Welcome to our new series of articles called The Gen Z Lawyer for the Future. This 3-part series will shine a spotlight on the most common challenges faced by in-house lawyers and legal department leaders. It will also explore the importance of cultivating a wide range of skills and experiences for these professionals. Finally, it will reveal some strategies and best practices for a lawyer to become a “Gen Z” lawyer – an expert, in-demand legal professional who not only has technical expertise and business knowledge, but is also able to create new sources of value for their clients.
Let’s look at the four key challenges in-house legal departments and lawyers are facing today. It’s vital for them to address these challenges in order to transform themselves into valued business and legal partners for their clients.
Challenge #1: Legal transactions are becoming more complex
Both change and complexity are increasing in the global business sphere. Companies all over the world are reconsidering their existing business models as they aim to capture a larger share of the market, raise more capital, create more liquidity, avoid insolvency, and boost their revenues and profits. Along the way, many are exploring opportunities to restructure, say, by splitting out activities, by selling assets, and even by liquidating low-or non-performing subsidiaries.
Legal teams must be aware of these developments among their own client base. Only then can they advise their clients about the risks and implications of these decisions and support them in executing planned strategies in accordance with expectations.
Furthermore, changes to the legal and regulatory landscape are also occurring at a fast pace. Many businesses struggle to keep up with these changes so they rely on their in-house legal departments or external legal partners to help. This reliance increases the burden on legal teams, not only to clarify the strategic impact of any new laws or rules, but also to ensure that their clients take appropriate actions to achieve and maintain compliance.
Challenge #2: Economic volatility is on the rise
Geopolitical conflict and supply chain disruptions have affected businesses in every corner of the globe. Whether it’s the ongoing Russia-Ukraine conflict, the yo-yoing price of fuel, increasing illegal migration, or recession-induced economic uncertainty – firms everywhere are operating in a fraught and unstable business environment.
Such pressures and disruptions have forced many of them to reconfigure their supply chains and operational structures. Some firms are moving their manufacturing centres, while others are shifting their back offices. Still others are re-contracting their trading arrangements with vendors, suppliers, and other third parties.
Regardless of the details of the decisions they make, they need to deal with existing contracts and set up new ones. Depending on the size and complexity of the supply chain, the number of contracts can balloon very quickly into a vast behemoth. It’s essential to manage all these contracts in order to maintain both business relationships and operational continuity. But to do so, it’s important to put the right people in charge of contracting processes. It’s also vital to store contracts properly and safely, and ensure that someone is responsible for monitoring contract compliance, archival, access and performance.
None of these tasks are easy to manage, so the role of legal teams – whether they are internal or external – takes on added importance. Companies expect their legal partners to help them navigate these geopolitical and economic developments, and avoid issues related to regulatory compliance, cross-border trade, and supply chain management. That’s why lawyers, paralegals, and other legal must stay updated on these developments and find a way to deal with the demands imposed on them by their clients.
Challenge #3: Class action suits are increasing
Class action litigations are not new. For decades, people have banded together to sue companies for various reasons, including misreporting past performance, misleading future performance, violation of consumer privacy, and data breaches. Mass suits related to environmental damage and a failure to meet investors’ environmental, social and governance (ESG) demands are also on the rise.
In many developed countries such as the USA, such legal proceedings are becoming more common, with more people and monies involved. Per one report, the aggregate settlements for class action suits in the country in 2022 totalled a whopping $4 billion, more than 2X the aggregate for 2021 ($1.9 billion). In the same period, the average settlement value also increased by 2X to $38 million.
Some of the most high-profile cases can involve hundreds or thousands of claimants, multiple courts, and multiple jurisdictions. Legal teams therefore have their hands full trying to keep up with each claim, each claimant, and each possible settlement pathway. Moreover, they must also ensure that their clients maintain a consistent position with each claim and claimant and avoid common issues that may weaken this position against one or more claimants. All these challenges can make the work of legal professionals and teams harder than it has been in the past.
Challenge #4: Companies expect legal teams to do more than offer technical expertise
Today’s companies pay big money to their legal partners and teams to help them keep up with a changing and challenging legal and business landscape. In return for this money, legal teams are under immense pressure to satisfy their clients’ demand for support around business strategy, risk management, regulatory compliance, governance, and even day-to-day operations.
These new and increasingly strident demands require legal professionals to bring a broad mix of skills, competencies, experience, and expertise to the table. Furthermore, these capabilities must go beyond technical skills and help them to add more value to their clients’ businesses. And in order to do so, they must be adept at using legal technology and leveraging the power of automation, data, and business analytics. They must also be proficient in project management and legal change management, and know how to manage and optimise stakeholder relationships.
Lawyers and legal firms that can do all of the above are able to successfully create more value for their client. They can establish themselves as progressive, future-focused firms, which will allow them to stand out from the competition. Of course, none of this is easy to do since it requires a massive shift in thinking about their own roles. That’s why lawyers who continue to think that their role is to exclusively advise their clients about the law outnumber the handful of lawyers who know that they are not just lawyers who provide legal advice but businesspersons who provide business input and advice. But the fact is that it is the latter small group who will succeed in future. It is this group that will be known as the Gen Z Lawyer of the Future.
Conclusion
We hope you found this article useful. If you are a legal professional who aspires to be a Gen Z lawyer of the future, you need to be more cognisant of the challenges explored above. Once you are aware of these challenges, you can take steps to address them. Here’s where developing the right skillset comes.
