Insight

When is a legal department NOT ready to transform?

Things to consider before embarking on a transformation initiative

Question: Which legal departments are not ready to transform?

Answer: Spoiler alert: not every legal department is primed for transformation, even if they want to transform. Even if they need to. Legal teams that lack agreement about whether change is necessary, or lack a clear impetus for change, are not (yet) in a position to transform successfully.

Change in an organization is difficult. It takes time, energy, and focus – and funding too. Legal teams that lack these resources are likely not ready to embark on a true transformation. (They may, of course, be able to pull off smaller reforms, which can be important in building momentum, and a business case, for a larger transformation. More on that in another posting….)

Notably, the mere fact that it would be an improvement both for a legal department and the business it serves to modernize the ways the legal department carries out its duties does not mean the legal department is ready to transform. The legal department, and other key stakeholders, need to recognize that they would benefit from the change. And, as so often is the case, perception may be more important than reality. (In that regard, if the legal department is doing so well in carrying out its mission that change is unnecessary, or, at least, that is the perception of messaging of key leaders, then change could be viewed as unnecessary or perhaps worse.)

But for most legal departments, which could benefit from change, just recognizing the benefits of transforming and modernizing may not be enough to support change. Understanding the benefits of changing how legal functions operate can be an abstraction, more a recognition of a theoretical good than an urgent impetus to change now. Businesses that perceive a benefit in change, in theory, in the future, are not ready to prioritize change now. They are not ready to transform.

Similarly, a lack of clarity or agreement regarding the need for change – what the change should be (and what it shouldn’t be), why it needs to happen, and why it should occur now – will also hamper transformation initiatives. Creating a clear vision for what the legal department should be, how it should work, and what it should accomplish – and then fostering agreement among key stakeholders in support of that vision – are necessary to implement change successfully. Legal departments that are struggling to define a vision for the future, or to generate agreement and support for the vision they articulate (either within the legal department or with external stakeholders), are not ready to transform – yet.

The same is true of legal departments that are overstretched in other ways. Even if they have a clear vision and agreement of stakeholders on what change should look like, legal departments are not ready to transform if they lack the bandwidth to act. Legal teams that operate on the edge – of time, of budget, of personnel – may not have the capacity to transform. In other words, they are not able to make change the priority; other objectives will crowd it out, and absorb the limited resources the department has. For these departments, the time, or other circumstances, may simply not (yet) be right to transform.

Change requires effort to succeed. Legal teams that are not in a position to devote the effort, and other resources, necessary to transform are not likely to succeed with a change initiative. Of course, circumstances change the needs of the business, of key stakeholders, regulators, and others evolve. Circumstances change. New leaders emerge, and new possibilities come into focus, which in turn free up the resources necessary to create change. The key is to recognize when a legal team is primed to succeed in a transformation initiative, and when the smart move is to wait.


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Eric Gorman

Eric Gorman

Principal, Forensic & Legal Operations Transformation Services, KPMG US

+1 312 665 1068
Kimberly Majure

Kimberly Majure

Principal, International Tax & Legal Operations Transformation Services, KPMG US

+1 202-533-5270
Jeff Ikejiri

Jeff Ikejiri

Principal, Tax & Legal Operations Transformation Services, KPMG US

+1 703-286-8000