Blurred boundaries: the changing nature of in-house legal teams

What you need to know

• Legal's scope expansion is primarily being driven by budget and resource constraints, but are generally considered to make good business sense when they are appropriately resourced.

What you need to do

• Finding the right business embedding and work intake models are important success factors for in-house teams facing scope increases.
• Driving efficiencies through process improvement, business upskilling, headcount increases and technology allow in-house teams to focus on these shifting strategic priorities.
• Investing in lawyers' multi-disciplinary skills in business, finance, technology and communication are essential to successfully integrating such a model.

The changing nature of in-house legal teams

The role of in-house legal teams – and the roles of the lawyers within those teams – are increasingly becoming broader, more business-embedded, and multi-disciplinary in nature. It is clear that the traditional boundaries that previously existed between in-house legal teams and other business units are blurring.

To explore the trend of evolving functional scope and how in-house legal teams are harnessing change to deliver greater value to their organisations, Ashurst Reach – together with the Association of Corporate Counsel Australia (ACC) – recently hosted our fourth national roundtable series. In these sessions we looked at a range of issues the blurred boundaries trend is raising, including changes in scope for in-house legal teams, how legal teams are being embedded in business, and the multi-disciplinary skillsets in-house lawyers need to thrive in their changing environments.

Lawyers from Sydney, Melbourne, Perth and Brisbane participated in the roundtables. They represented a broad range of sectors, including financial services, hotel and leisure, technology, professional services, FMCG, manufacturing, public service, healthcare, energy and resources, and advertising. Through their feedback, we gained some important insights into what in-house teams and organisations can do to build future-ready legal workforces.

Setting the scene

Blurred boundaries survey

Ahead of the national roundtable series, we surveyed Ashurst Reach consultants for their insights into the trend of blurring boundaries for in-house legal teams. We later asked the participants in each of the roundtable sessions for their responses to the same questions.

The survey asked the respondents to share whether they had experienced any noticeable scope increases. As shown in Figure 1, an overwhelming majority (90%) said they had experienced many (57%) or some (33%) scope increase.

Figure 1: Noticeable scope increases in the in-house legal team.

We also asked participants whether their in-house legal team is responsible for, or significantly participating in, any broader business functions. As shown in Figure 2, each group of respondents reported expanded functional responsibilities for in-house teams across risk and compliance, company secretarial, ESG, corporate, public affairs, HR, procurement and finance. The most common expanded areas of scope were risk and compliance (85%), company secretarial (76%), corporate (66%) and procurement (64%).

Figure 2: Additional areas of functional responsibility for in-house legal teams.

Our final survey question asked the respondents to rate the multi-disciplinary skills they think will be most valuable for lawyers in the short-medium term. Each group of respondents rated business acumen as the top skill they think in-house lawyers need to develop (see Figure 3). Communication was seen as the next most valuable skill, other than in Perth who rated project management above communication.

Figure 3: Most valuable additional skills for lawyers, rated 1-10 with 1 being the most valuable.

Roundtable observations

During the four roundtable sessions, the conversations aligned with the trends shown in the survey data.

Changes in scope

There’s no doubt the role of in-house legal teams, and those of the lawyers working in them, are increasingly broadening in scope. In fact, at the Sydney roundtable, just over half of the participants said they were now spending more than half of their time on non-legal work. Where scope blurring has occurred, some participants reported investment into the legal function had followed.

According to the roundtable participants, there seems to be many reasons for the blurring of these boundaries, including budget cuts, resourcing gaps, corporate expectations for in-house teams to do more with less, and a realisation that legal skills are often complementary to other business functions.

The roundtable participants saw many of the areas where these scope increases are occurring as being natural extensions of their work, given the traditional level of legal involvement in those areas. For example, it often makes sense for the General Counsel to also perform the Company Secretary role as both roles are usually required at a lot of the same meetings and work on the same matters. Insurance is another area with similar meeting and matter crossovers, where lawyers think the increase in responsibility (with the right resources attached) makes good business sense.

Similarly, the roundtable participants agreed managing risk and compliance through a legal lens is generally sensible. For example, one participant talked about how the GC and Compliance Officer roles were combined following two high-profile legal compliance issues that damaged the organisation’s reputation. The same organisation’s legal department now also keeps the compliance team well-trained, despite not necessarily employing lawyers in compliance roles.

However, there was also an acknowledgement that risk management is a specialised skillset, which often comes with business-specific requirements. As a result, several participants said this area of expanded responsibility is keeping them up at night.

Other roundtable participants confirmed their in-house teams were responsible for functions including information management, procurement, privacy, governance, audit, finance, IT, BD, government relations and operations.

According to the participants, managing this new normal requires good governance, the right resources, and the ability to demonstrate value to the business. Within this context, a topic of discussion was the need to get reporting lines and other C-suite communications right – particularly with the CFO. To build ‘political capital’ participants suggested really understanding the business, avoiding being seen as a ‘handbrake’, focusing on the bigger picture, communicating value, talking about ‘shiny’ opportunities and not just risks or problems, and building internal relationships with the Board, CEO and other leaders.

Opportunities for individuals

In-house legal roles that offer broader business exposure also create excellent career opportunities for lawyers interested in pursuing career paths into corporate leadership or other business functions. In the roundtable discussions, participants shared their experiences of broadening career opportunities thanks to the blurred boundary trend.

One organisation encourages secondments into other business units, such as secondments into short-term project roles. This approach offers the dual benefits of providing individual lawyers with broader experiences and leadership development opportunities, as well as demonstrating value to the business from its investment in legal expertise. In one case, a legal counsel performed so well in their secondment that the business created a permanent role so they could remain working in project management.

Evolving roles were a common topic. For example, one lawyer talked about the shift in their work over the past decade. They started advising on BAU commercial, procurement matters and investigations but have more recently focused on projects in line with the organisation’s evolving strategy.

Another participant spoke about how their in-house counsel role, which initially had a traditional legal focus, had expanded to include the Company Secretary role. As ‘legal was being pulled into everything’, they had later needed to grow the legal team to support the evolving business by hiring for specific skills (most recently privacy).

For another participant, a regulatory breach led to a non-legal role opportunity within the organisation’s data privacy compliance team. While they eventually went back to the legal team, they acknowledged that it was that cross-disciplinary approach that provided them with significant regulatory compliance experience.

Addressing the challenges

While the broadening of scope for in-house legal teams is creating opportunities, it is also proving challenging.

Participants spoke about their concerns regarding team capacity constraints, including a knock-on negative impact on wellbeing. They explained lawyers often experienced stress or anxiety when they did not have the right skills and resources, with one example being shared around the implementation of a document management system where the in-house legal team didn’t know where to start. Another participant spoke about how strong work ethics can drive lawyers to add to their heavy load by saying ‘yes’ to role creep. In many cases, these requests (or demands) are being made because of a capacity or skill vacuum in other areas.

There was also an acknowledgement that there is a balance in a lawyer’s need to meet their legal professional obligations and be a business partner. It can sometimes be difficult to draw the line between those two roles and to be clear on what constitutes legal advice. For example, one participant said that the legal department had picked up a lot of project management work after several project managers were made redundant. This had led to difficulties when the legal team was required to make commercial decisions that conflicted with their legal professional obligations.

How to manage blurring boundaries were:

• having a commercial mindset, focusing on the activities that deliver the most value to the business, and framing things in financial terms to help build credibility
• aligning effort to business priorities, securing business buy-in to the scope (including through the budget process), and staying flexible in allowing the business to add or delete activities
• using data to demonstrate value and identify business risk
• investing in ways to streamline lesser value work, including by staying on top of what's happening in legal tech and compliance spaces
• having an effective work intake system
• carefully managing professional privilege when performing other functions
• recruiting for fit with the team and the company strategy, including considering broader skillsets
• implementing a work-type catalogue – with an assigned complexity rating for the work – to ensure work is performed by lawyers (or others) with the appropriate level of experience
• clearly communicating the scope of the team’s role, including educating the business on what should come to legal
• using company values to give lawyers ‘psychological permission to pushback’
• encouraging the business units to use standardised contracts to help manage workload issues and upskill the business, and
• communicating openly with colleagues who have previously held functional responsibility to avoid potential conflict.

Legal teams embedded in the business

The roundtable conversations suggest legal teams are becoming increasingly embedded in business units. Participants shared a wide range of embedding arrangements.

Embedding approaches:

• co-located with business units full-time
• co-located with business units part-time (as little as one day a week)
• co-located when working on a particular project, for example providing regulatory advice on a project
• allocated to asset / business units, and
• connected to business need by a centralised inbox model (e.g. Xakia) to better enable value reporting.

Participants saw several advantages in co-location, with face-to-face time fostering teamwork and collaboration and supporting appropriate work allocation; resulting in better advice and reducing ‘advice shopping’ (where business units keep asking different in-house lawyers until they get the answer they want).

The roundtable discussions highlighted that the way the legal team interacts with the business is affected by the instruction or work intake process. For example, one participant observed that 'taxi rank' models can make it difficult for in-house lawyers to connect with the business meaningfully as each lawyer in the team is always working with different stakeholders and business units. In response to that observation, a participant shared that their organisation uses both specific allocations and 'taxi rank' approaches to help tackle the disconnect issue. Using that dual approach, lawyers are assigned to strategic projects / senior leaders in the business but also respond to BAU matters using the 'taxi rank' model. The participant shared that this hybrid solution evolved from a request by the legal team who wanted more variety and a less-siloed working model.

Another participant described a solution that supports lawyer autonomy by allowing them to choose the work that suits them, and someone else explained how the most junior lawyer managed their team’s work allocation.

Other roundtable participants reported using legal inboxes, triage systems, thresholds that trigger legal support (e.g. procurement thresholds), and SharePoint-based matter intake and status reports.

Multi-disciplinary skill sets

In general, participants agreed that in-house lawyers now need a wide range of complementary skills to succeed.

In the area of business, these skills included project management, governance, strategy, regulation (e.g. AML and modern slavery), finance (including being able to read a balance sheet) and technology. For example, one organisation split its IT legal team into two specialist teams – one for procurement (transactional) and another for data and privacy (regulatory) – to ensure the right skills were developed to manage IT disputes and crisis management.

There was also agreement that lawyers need to develop strong technology skills, including AI literacy. Participants shared stories of how lawyers with technology skills are already benefiting from the rapid uptake of legal tech and AI solutions. For example, one team has significantly reduced its repetitive tasks by using Copilot.

The participants also said it was important to have strong communication skills – including listening, asking questions, being persuasive, delivering presentations, and understanding business unit perspectives. Some of the initiatives in this space that were shared included:

• working on concise legal explanations in a business with a workforce that primarily has English as a second language, which has included implementing a policy for one-page (or less) legal advice that includes action items
• investing in public speaking training, which has helped one team better provide legal training to the business and subsequently reduced its volume of low-level work
• encouraging lawyers in the legal team to have difficult conversations in a way that others can learn by watching
• providing a one-hour session once a month on soft skills, such as having challenging conversations, and
• developing training content that is delivered by credible third parties, such as private practice firms already advising the business unit.

Participants also highlighted the need for skills in relationship building, resilience, lateral thinking, and the ability to effectively ‘push back’. Shared tactics for pushing back included having defined delegated authority, including the executive team in decision-making, and contextualising push-back decisions in terms of strategic priorities.

The takeaways

Based on our survey results, the roundtable conversations and many other research sources, including the ACC’s 2024 In-house Trends Report, it’s clear the scope boundaries around in-house legal teams have blurred.

From the stories shared in the roundtable conversations, it seems many changes in scope are being driven by budget and resource constraints. However, it’s also clear these changes make sense to businesses and lawyers alike when they are appropriately resourced because of the existing skills, experience and aptitude of in-house legal teams.

For in-house teams facing increases in scope creep and "blurred boundaries" it is crucial to find ways to offset rising workloads through activities like process improvements, business upskilling and ‘self-serve’ options, headcount increases, and technological advancements. The final success ingredient is to invest in lawyers’ multi-disciplinary skillsets, particularly in the areas of business, finance, technology and communication.

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