How to Build the Best In-House Legal Department Structure
Choosing the proper structure for your corporate legal department is not just about filling roles; it’s about creating a dynamic framework that aligns with your organization’s size, budget, available skills, and business objectives.
A well-considered structure maximizes your department’s effectiveness. It encourages better internal collaboration, improves your capacity for more work, and keeps you agile enough to address future challenges and opportunities.
What to Consider When Choosing the Right Corporate Legal Department Structure
As you structure your team, you must consider where your legal department is now and how you can best position it to handle future needs.
Look at the factors influencing how best to set up your legal department.
First and foremost, you must ensure your legal department’s structure supports the company’s overall business objectives and strategies, both now and in the future. Make sure your structure is agile and able to respond quickly to changes in the market or in industry regulations.
You must build your team in a way that best serves all departments across the company, from finance and HR to engineering and operations. To do this, your structure needs to embed attorneys within each function.
Once integrated into a department, your team can proactively address that department’s needs. This is important even if that department doesn’t now ask you for legal advice. You need to know how their legal needs may change down the road.
A 2022 Legal Dive report found the median size of legal departments is six people. At that size, generalists primarily comprise your team. Your department hierarchy is likely pretty flat.
That setup works great when your team is small, but you should organize the department based on your plans for future growth. Your structure needs to work as you scale up.
You must also balance the number of team members against the workload to avoid burnout or underutilization. To help with this, you should automate as much of your team’s in-house work as possible.
Legal e-billing tools like Brightflag use A.I. to accurately review law firm invoices in a fraction of the time it takes the most skilled attorneys to pore through each line item. Matter management features also reduce how long your team needs to onboard new outside counsel and track matter progress. Freeing your in-house team from repetitive, day-to-day administrative tasks gives them more time to handle high-value work.
You’ll eventually need to expand your team as the company grows and the volume of legal work from legal service providers increases. As you introduce more roles onto the team, specialization makes more sense. Hiring attorneys with deeper expertise is more efficient because they can complete the work faster. Attorneys with competency in specific practice areas also produce higher-quality legal advice.
Your financial constraints will go a long way toward determining your balance of in-house work to outside legal counsel. If you have the budget to outsource work to outside counsel, it might make sense to keep your team small, but it’s not typically the most cost-effective approach.
The latest Associate of Corporate Counsel report shows many companies are seeking ways to cut costs by bringing more of that work in house.
Whether or not you have the budget to add headcount or outsource work, you should use legal spend management tools to maximize your budget. Legal spend software helps you track budget metrics and monitor legal costs in real time to ensure outside counsel delivers quality legal advice at cost-effective rates.
Available Team Skills
Part of understanding the best legal department structure is evaluating your team’s current expertise. Perform a skill gap analysis to understand your team’s existing knowledge and experience. Then, look at historical data to see which business divisions use your legal team the most and the type of matters they generate.
For example, you might discover the engineering department has ramped up research and design projects, but you don’t have that type of expertise on staff. As a result, you are outsourcing a lot of IP work to expensive outside counsel.
This skills gap analysis should inform your decision-making when dividing work between in-house and outside counsel. If you choose to keep work in-house, you may have to train your team in new areas of the law or hire new attorneys with that expertise.
Types of In-House Legal Department Structure
Now, you have a good idea of your legal department’s strengths and weaknesses, the available resources, and how your team fits into the company’s overall strategy and growth objectives. That knowledge helps you develop the right structure to suit your needs.
Most legal departments find that a blend of structuring based on expertise and business needs works best. Remember also that as your legal department evolves and the company’s needs for your legal resources change, you’ll have to revisit your department structure regularly.
In this structure, in-house attorneys take on work based on their specialty.
So, you may have attorneys that understand IP, a different group that focuses on litigation, and another that handles real estate legal matters.
Even if you structure by expertise, you must meet regularly with each business unit in the organization. Good communication encourages a good working relationship. It also helps your team understand both ongoing and upcoming work that may require legal advice.
By Business Need
Arranging your legal department structure according to business needs will look different depending on what those needs are.
One way to structure your department is to assign in-house lawyers to a specific business division like HR or engineering.
It could also mean a lawyer’s responsibilities are geographic. For example, you might have a team that operates in the same time zone as your Chicago offices and another for your San Francisco offices. Or you may have a team of lawyers for your EMEA operations and another for your North American HQ.
You will need region-specific expertise for some types of law, while your team can serve other legal needs from anywhere.
You might accomplish this by having a centralized legal team and outsourcing jurisdiction-specific work outwards from there. Alternatively, you might have a Group Legal function to advise on overall corporate matters and smaller legal teams or individual attorneys within each country or state.
For some conglomerates, organizing your department around business needs may involve creating different in-house teams for each brand under the parent company’s umbrella.
As with geographic distribution, you’ll likely have at least a lawyer for each brand, but you’ll also have a Group Legal function to offer legal advice at the conglomerate level.
The Roles to Fill Within Your Legal Department Structure
A legal department structure serves as the blueprint for your hiring strategy. As your budget allows, here are the roles you’ll likely need to fill.
This is the starting point. If you have a legal function today, you already have a GC, or an in-house counsel that is filling this role with a different title.
A GC is the chief legal officer of the organization. They are responsible for overseeing all legal aspects of the business. They provide strategic legal guidance to senior management, ensure regulatory compliance, oversee high-risk litigation and legal disputes, and direct the organization’s legal strategy.
In-house counsel provides legal advice on various issues pertinent to the corporation they serve. This can involve contract negotiations, intellectual property matters, employment law issues, regulatory compliance, and more.
The smaller your staff, the more likely this role is a generalist. In larger legal departments, in-house counsel are usually experts in a particular practice area.
In-house counsel work includes:
- Drafting, reviewing, and negotiating contracts and agreements
- Providing legal advice on corporate matters, risk management, procurement, policies, and procedures
- Assisting in the management of regulatory compliance
- Collaborating with different stakeholders to address legal queries
- Handling customer and vendor legal interactions and transactions
Legal Operations Manager
Legal operations manager is an essential role. The legal operations manager acts as the right hand to the GC and ensures the department operates effectively.
The legal ops manager optimizes the efficiency and effectiveness of the legal department and provides strategic advice on how the legal department can improve.
This role manages the department’s internal processes, technology, budget, and operations. They implement best practices to help attorneys be more successful, and they free up attorneys’ time from administrative tasks to provide strategic advice on legal issues instead.
Paralegals become essential to your operations as your legal department scales beyond a handful of attorneys. They provide legal support on any task that doesn’t require a JD. That includes research, preparing legal documents, and reviewing case files.
Effective use of paralegals within your team’s workflow helps control your department’s legal costs since paralegals command lower hourly rates than most attorneys.
Maximize Productivity in Your Corporate Legal
No matter how you structure your legal department, the right legal technology will significantly boost your team’s productivity. Whether you have a large team with multiple specialized roles or a leaner setup, leveraging these tools is critical to streamlining operations, managing costs effectively, and staying agile in a rapidly changing legal landscape.
With solutions like Brightflag’s e-billing and matter management tools, you can harness the power of A.I. for smarter spend management, efficient matter handling, and insightful analytics, all tailored to your department’s unique structure and needs.
Don’t let traditional constraints hold your legal team back. Embrace the future of legal operations with technology that empowers every role within your department. Discover how Brightflag can transform your legal team’s efficiency and effectiveness.