Four imperatives for the next-generation legal department (2024)

(7 pages)

Legal departments are subject to the same kinds of forces for change that have led companies to transform structures and processes in product development, operations, sales, and more. The changes in the legal ecosystem include unprecedented technological advancements, a new wave of corporate litigation, and legal colleagues’ evolving career expectations. To attract and retain talent, operate efficiently, and support the organization’s mission, general counsels should take a fresh look at their organization’s structure.

About the authors

This article was a collaborative effort by Jan Krause, Corinne Möller, Johanna Pracht, Dina Seilern-Aspang, and Tobias Sodoge.

As we work closely with general counsels and their teams across industries, they often wonder which structure and processes will best prepare the legal department for change. While each situation requires tailored analyses and recommendations, we believe four general imperatives should be top of mind for every general counsel building a next-generation legal department:

  1. clarifying the functional purpose and priorities
  2. setting up for a changing legal ecosystem
  3. preparing for a new wave of corporate litigation
  4. enabling careers for legal talent

Clarifying the functional purpose and priorities

For many companies today, the array of legal challenges is expanding, making a high-performing legal department more important than ever. To be effective, it must offer more than on-demand concierge services, and should have a voice in numerous strategic and tactical decisions, rather than being brought in only after the fact, such as after a contract has been signed.

While business leaders might not always know when or how to involve their in-house lawyers, clarity of purpose should start in the legal department. Since the department oftentimes constitutes the company’s ultimate line of defense from a range of risks, the general counsel needs to define its functional purpose and priorities clearly. This often requires leaders to ask uncomfortable questions, such as:

  • Where can the in-house department make a difference for the company by providing advice in its own capacity, and where does it effectively manage outside counsel or similar external capacity (Exhibit 1)?
  • How does the department balance the need to protect the company, its assets, and its employees while enabling business endeavors, even in less familiar areas?
  • How does the increasing emphasis on (legal) risk management, compliance, and forensic management change legal operations, and does the department have all the skills it needs to address these topics?


Four imperatives for the next-generation legal department (1)

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One approach to defining a functional purpose is to compare business activities and priorities with how and where in-house lawyers spend their time. Should the legal department focus more on drafting complex commercial contracts for new projects, managing external counsel to handle mass litigation, or responding to day-to-day requests?

To improve transparency and inform discussions with business leaders, we recommend that a legal department understand and categorize which business activities drive the legal workload, such as drafting commercial contracts and preparing for investment decisions (Exhibit 2). The general counsel can use this assessment for various applications. Following are just a few examples:

  • Enable joint prioritization with business units by creating transparency on legal workload based on business activities.
  • Understand internal resource needs by role and skills required (e.g., subject matter and jurisdiction).
  • Forecast external costs and decide on required partners’ capabilities.


Four imperatives for the next-generation legal department (2)

Aligning the legal department’s activities with the strategic goals of the company is often an eye-opening exercise that can help the general counsel articulate the department’s value proposition and decide where new investments are warranted.

Setting up for a changing legal ecosystem

New means of collaboration, the rise of litigation financing, and advances in technology are changing the legal ecosystem. Technological developments, for example, are increasing the volume of data to be processed, enabling remote working arrangements, requiring new security measures, and adding technology skills to the department’s talent needs.

Remote work during the COVID-19 pandemic has presented new security concerns and other challenges in accessing files, contracts, and other data while working from home.

Getting the right person for the job, arguably a general counsel’s most important task, is complicated by the aforementioned changes in the legal ecosystem. While legal departments could once choose from preselected panels of law firms for help with particular subject matters, a much broader range of services (such as digitally enabled legal services, legal tech, insourcing providers, and litigation financing) is available today. General counsels need to learn how to navigate those services (Exhibit 3).


Four imperatives for the next-generation legal department (3)

Artificial intelligence, for example, can speed up the process of drafting legal papers through the use of tools for automated research, translation, document generation, and pre-population. Today’s machine-reading algorithms can also review thousands of documents in minutes, freeing lawyers from repetitive, low-value tasks and giving them more time for high-value analysis and advice. These and other new solutions can help general counsels address capacity constraints. Given the enormous quantities and value of data now available from public and private sources, most next-generation legal departments will need data scientists who can harness it.1Kevin Buehler, Rachel Dooley, Liz Grennan, and Alex Singla, “Getting to know—and manage—your biggest AI risks,” May 2021,

Four imperatives for the next-generation legal department (4)

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Preparing for a new wave of corporate litigation

Many companies with global footprints are exposed to new waves of litigation brought on by professional litigators who have developed elaborate strategies for bringing their lawsuits forward, including the selection of jurisdiction and the use of online marketing to reach potential claimants. The trend is accelerated by a growing litigation finance industry that now has more than $11 billion to fund claims globally (Exhibit 4). Many litigators embrace financing because it provides coverage of their legal fees, which enables planning security and potentially a fungible portfolio of business. Claimants choose financing solutions because they provide immediate relief from risk and legal fees in exchange for some limits on the upside.


Four imperatives for the next-generation legal department (5)

Often these lawsuits take the form of class-action-like mass proceedings. Recent examples include claims of air pollution, antitrust violations, and breaches of consumers’ personal data. Attacks can also be launched in the B2B context: more companies now see litigation as a way to fight for market share and keep competition at bay. Regulators litigate to enforce standards, and a new generation of digitally enabled consumer litigators seek compensation for their clients. Flightright, for example, offers low-cost digital legal services to airline passengers.

Meanwhile, more not-for-profit organizations are suing on behalf of others, using court proceedings to drive social change and protect the environment, especially with respect to carbon dioxide emissions (Exhibit 4). The NGO Germanwatch, for example, is supporting a Peruvian mountain guide and farmer in his suit against the German utility company RWE, claiming that its global greenhouse gas emissions contribute to ecological changes and threats to people in the Andes. In another example, the Dutch NGO Milleudefensie has brought Shell to court, challenging its carbon-reduction targets, and pressing for a commitment to reduce its carbon dioxide emissions by 45 percent by 2030. The court of The Hague ruled in favor of the NGO in the first instance in May 2021.

Besides preparing to defend their companies against lawsuits, general counsels can adopt a forward-thinking, preventive approach to legal risks. Some general counsels are now working much more closely with the broader organization, convening cross-functional teams to anticipate areas in which regulation is likely and to participate in public discussion of these issues. Of course, they also should prepare for regulatory compliance. Many in the EU are now planning organizational changes, for example, to adhere to new laws on corporate responsibility.2E.g., German Lieferkettengesetz. Some are also bolstering corporate resilience by “translating” regulatory challenges into opportunities to create value, such as by improving environmental, social, and governance to appeal to investors, customers, communities, employees, and potential hires.

Enabling careers for legal talent

In seeking to hire, develop, and retain the best talent, corporate legal departments must compete with law firms and the public sector, even though many law graduates do not consider in-house positions their first choice (Exhibit 5). Many believe, correctly, that promotions within a legal department can be rare. Increasingly, positions in the middle and senior ranks are now filled by lawyers from private practice. This predominantly one-way traffic from private practice to industry means that many qualified people may vie for an open position, making it increasingly difficult for in-house lawyers to move up.


Four imperatives for the next-generation legal department (6)

Some companies are making the roles more attractive, however, by opening career paths and skill-building opportunities. Careers in a corporate legal department usually start three to five years after graduation and some training in a law firm.

In times of constrained financial resources, to attract talent and set themselves apart, leading corporate legal departments are creating more exciting work environments for young professionals—for example, by creating interdisciplinary teams that include data scientists, forensic experts, and external counsel. Many are also offering more attractive working conditions, including flexible working hours and part-time models.

Around the world, the most imaginative corporate legal departments are broadening career opportunities with a range of other innovations. Here are a few examples:

  • Expanding geographical reach. Some firms give in-house lawyers responsibilities over a wider range of geographies instead of handing them off to external lawyers.
  • Offering internal and external secondment programs. Telstra and Westpac, for example, “swapped” in-house lawyers as part of a three-month pilot secondment program in 2016. Both also offer internal secondment programs where lawyers can rotate throughout the business.
  • Opening adjacent career tracks for those who want to grow beyond legal. Some topics naturally overlap, such as compliance, audit, and risk. Some companies go further, offering opportunities across finance, M&A, procurement, and investor relations.

Such efforts are becoming necessary tactics for building a legal department suitable for today’s legal ecosystem. We have found that as legal operating models shift to keep pace with the business strategy, skill gaps are emerging in legal departments. General counsels can increase the attractiveness of individual jobs and elevate the function by offering training in areas such as cross-functional project management and presentation and analytical skills.

Even as today’s legal departments come under pressure from a new wave of corporate litigation, they have skills gaps to fill and must recruit from a pool of young talent with doubts about working in legal departments. These challenges are not insurmountable, but they do require a fresh perspective on the structure and processes of the legal department. Our experience has shown that general counsels can build a next-generation legal department by addressing four imperatives: clarifying purpose and priorities, setting up for a changing legal ecosystem, anticipating and planning for litigation, and enabling careers for legal talent. The resulting next-generation legal department will not only provide on-demand concierge services but will also have a voice in the company’s strategic and tactical decisions.

Jan Krause is a partner in McKinsey’s Cologne office; Corinne Möller and Johanna Pracht are consultants in the Hamburg office; Dina Seilern-Aspang is a consultant in the Vienna office; and Tobias Sodoge is a consultant in the Berlin office.

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Four imperatives for the next-generation legal department (2024)


Four imperatives for the next-generation legal department? ›

Our experience has shown that general counsels can build a next-generation legal department by addressing four imperatives: clarifying purpose and priorities, setting up for a changing legal ecosystem, anticipating and planning for litigation, and enabling careers for legal talent.

What are the key functions of the legal department? ›

Legal matter management: The legal department is typically responsible for all legal and legal related external matters such as litigation, investigations, compliance, mergers and acquisitions.

What is the difference between chief counsel and general counsel? ›

While the Chief Legal Officer oversees legal strategies on a higher level, General Counsel offers more hands-on management, making decisions in the moment for legal matters like compliance regulations, contract review and negotiation, asset protection, and litigation.

How are corporate legal departments organized? ›

The corporate legal department usually has two groups of staff: senior lawyers who supervise, litigate, and make strategic decisions, and junior lawyers who support senior lawyers, research, review, and draft. General Counsel is the most senior attorney and heads the department.

Does EY have a legal department? ›

The EY Legal Managed Services team empowers process innovation and frees in-house resources to refocus on strategic priorities.

What are the four basic functions of law? ›

The law serves many purposes. Four principal ones are establishing standards, maintaining order, resolving disputes, and protecting liberties and rights.

What are the 3 basic functions of the legal system? ›

The three basic functions of the court system are norm enforcement, dispute processing, and policy making.

Is general counsel the same as a lawyer? ›

GCs are usually qualified lawyers and will have passed the state bar exam. Their qualifications might also include the Multistate Bar Examination (MBE) in addition to other state-specific certifications.

What is a VP of general counsel? ›

Vice presidents and general counsel are responsible for overseeing ongoing tasks within a company and providing assistance and resolving problems as they arise.

What is another name for general counsel? ›

A general counsel, also known as chief counsel or chief legal officer (CLO), is the chief in-house lawyer for a company or a governmental department.

How are legal teams structured? ›

Type of structure

There are three types of structures: Functional (central legal team divided-up by functional area) Client Focused (attorneys embedded into different parts of the business based on line of business or geography) Hybrid (a combination of the first two)

What is legal responsibility of an organization? ›

ensuring standard form contracts do not have unfair terms. honouring customer guarantees. ensuring the safety of products and services. complying with rules on sales practices (such as price, customer information, lay-by agreements and unsolicited customer agreements).

What is the highest salary at EY? ›

  • Senior Auditor. $90,474 per year. ...
  • Tax Senior. $92,778 per year. ...
  • Audit Associate. $71,957 per year. ...
  • Staff Accountant. $68,983 per year. ...
  • Tax Manager. $125,274 per year. ...
  • Tax Staff. $72,470 per year. ...
  • Senior Tax Manager. $173,604 per year. 9 salaries reported.
  • Senior Accountant. $90,076 per year. 16 salaries reported.

What Company has the largest legal department? ›

Largest Law Firms Research Summary

The largest law firm in the U.S. is Kirkland Ellis, with a revenue of $6.04 billion and 2,307 employees. As of 2022, U.S. law firms have a market size of $367.9 billion.

Is it hard to get to EY? ›

It is very hard to get a job at EY.

EY (Ernest& Young) is one of the Big Four accounting companies, and this makes their hiring process extremely challenging and competitive.

What are the 4 types of law? ›

When researching the law, it is important to remember the four main types of law: constitutional, statutory, administrative and case (common) law.

What seven goals do we expect our legal system to achieve? ›

In a nation, the law can serve to (1) keep the peace, (2) maintain the status quo, (3) preserve individual rights, (4) protect minorities against majorities, (5) promote social justice, and (6) provide for orderly social change. Some legal systems serve these purposes better than others.

What is the most important function of the law? ›

Laws protect our general safety, and ensure our rights as citizens against abuses by other people, by organizations, and by the government itself. We have laws to help provide for our general safety.

What are the three most common legal systems? ›

Types of Legal Systems

Legal systems do fall into groups or patterns with some similar features within each group. Among the main groups that you might encounter are: 1) common law; 2) civil law; 3) religious law; and 4) customary law.

What are the two main legal systems? ›

The two major legal systems in the world are Civil Law and Common Law, but JurisGlobe, a project of the University of Ottawa, identifies five categories of legal systems: Civil law, Common law, Customary law, Muslim law and Mixed law systems.

What are the 3 most common types of law? ›

The basic divisions in the U.S. legal system are the criminal, civil, and administrative.

What does Esq of counsel mean? ›

Of counsel is the title of an attorney in the legal profession of the United States who often has a relationship with a law firm or an organization but is neither an associate nor partner.

What does GC mean in legal terms? ›

The title “General Counsel” tends to mean the individual who is running the legal department and interfacing with the board, not someone with a reporting relationship to the person who is actually running things.

What is the difference between attorney and lawyer vs Esquire? ›

The difference between a lawyer and an attorney is that the latter has passed a state Bar exam, can use the abbreviation Esq. after their name, is licensed to practice law in their respective states, and can represent clients in court proceedings.

Can general counsel also be the CEO? ›

General counsel as a business leader

A business-focused GC who understands the company's strategy and effectively partners with senior management to drive that strategy is a powerful member of the executive team — and, perhaps one day, a CEO.

What is the difference between senior counsel and general counsel? ›

Senior counsel (Ten+ years out, but not in a specific leadership role) Associate general counsel (the equivalent of a senior partner or team or practice group leader) General counsel (managing partner of the law department; c-suite executive)

How do you become an effective general counsel? ›

The Key Attributes and Skills of a General Counsel
  1. Strong judgment.
  2. Ability to deal with complex matters that cut across legal and related areas.
  3. Leadership skills.
  4. Strategic use of legal.
  5. Ability to anticipate legal issues and risks.
  6. Visionary mind.
  7. Curiosity.
  8. Ability to inspire others.

What is the role of general counsel? ›

A general counsel, sometimes called GC, chief legal officer, or corporate counsel, is a company's main attorney and primary source of legal advice... The GC typically reports directly to the CEO, because his or her opinions are integral to business decisions.

How do you address a general counsel? ›

Address an attorney as "Mr." or "Ms." in most contexts. In the salutation for a letter or email, address an attorney the same way you would any other respected professional- using "Mr." or "Ms." followed by their surname. Generally, this is the best way to address an attorney if you've never spoken to them before.

What's the difference between council and counsel? ›

Counsel and council are pronounced the same, but they have different (though related) meanings. Counsel is a verb meaning “advise” and a noun meaning “advice” or “instruction.” It can also be used as a noun to refer to a lawyer. Council is a noun referring to an advisory or legislative body of people.

What are the 4 elements of a case? ›

elements (of a case)
  • The existence of a legal duty that the defendant owed to the plaintiff.
  • The defendant's breach of that duty.
  • The plaintiff's sufferance of an injury.
  • Proof that defendant's breach caused the injury (typically defined through proximate cause)

How do you store legal size documents? ›

You can keep these papers in file folders stored in the filing cabinet along with your other important documents OR in a binder with various sections and pockets. The main benefit of a binder is that it doesn't take up much space, and it can be kept anywhere and moved around to wherever you need it.

What is the legal case method? ›

The case method is a participatory, discussion-based way of learning where students gain skills in critical thinking, communication, and group dynamics. It is a type of problem-based learning.

What is the most common legal structure? ›

The most common forms of business are the sole proprietorship, partnership, corporation, and S corporation. A Limited Liability Company (LLC) is a business structure allowed by state statute.

What is the best way to structure teams? ›

Best practice: Create teams with a larger set of members and more channels. Minimize the number of teams that require a person's participation. Channels within a team should be thought of as topics or workstreams to aid the team in organizing their work to deliver on their joint objectives.

How do you organize a team structure? ›

3 ways to build a successful team structure
  1. Determine which structure is best for your team.
  2. Align your goals.
  3. Set clear responsibilities.
Aug 31, 2022

What is accountability or legal responsibility? ›

Accountability refers to the processes, norms, and structures263 that hold the population and public officials legally responsible for their actions and that impose sanctions if they violate the law. Accountability is essential if systemic threats to the rule of law are to be corrected.

What is legal and ethics responsibility? ›

Most commonly, legal ethics refers to these rules of professional responsibility: the actual responsibilities lawyers must follow by law such as client confidentiality. However, legal ethics can also refer to the discussion on broader moral principles that societies place on lawyers that may not be legally required.

What are examples of legal responsibility? ›

Legal responsibility means the rights and responsibilities to determine and control various matters affecting a child's welfare and upbringing, other than routine daily care and control of the child. These matters include but are not limited to education, medical and dental care, religion and travel arrangements.

What is the lowest salary at EY? ›

FAQs About EY (Ernst & Young)

Salaries at EY (Ernst & Young) range from an average of $53,781 to $153,209 a year.

Does EY or PwC pay more? ›

Salary & Benefits

While the salary at PwC is higher than that at EY, the benefits between the companies are generally comparable.

Is Deloitte more prestigious than EY? ›

This is the second time Deloitte has finished atop Vault's prestige ranking, taking the title in 2009 as well. The only other firm besides PwC and Deloitte to be named “most prestigious” was EY in 2007.

What law firm made the most money? ›

List of largest law firms by revenue
RankFirmRevenue (US$)
1Kirkland & Ellis$6,042,000,000
2Latham & Watkins$5,488,778,000
3DLA Piper (verein)$3,471,437,000
4Baker McKenzie (verein)$3,126,729,000
65 more rows

Which law firm represents Apple? ›

Wilson Sonsini Goodrich & Rosati
HeadquartersPalo Alto, California
No. of offices18
No. of attorneys1000
No. of employees1,850 (As of 07/01/2022)
Major practice areasCorporate, intellectual property, litigation, technology transactions, and regulatory
6 more rows

Which law firm has the most lawyers in the world? ›

In terms of staff, the international law firm Dentons occupied the first place in international rankings in 2021. This firm employed more than 11,300 lawyers throughout the world during that year.

What is the GPA to get into EY? ›

Prior experience in Consulting environment will be an advantage. Min GPA 3.20 out of 4.00 from reputable Universities.

Why is EY breaking up? ›

The company, which is one of the Big Four accounting giants, announced its plans for a split in September after regulators voiced concerns that the audit arm would not do its job fairly for its client if it also employed EY as a consultant.

Does EY look good on a resume? ›

Company is well respected in the community and has an excellent reputation. It's a good company to have on a resume.

What is chief counsel? ›

As the chief legal advisor to the IRS Commissioner on all matters pertaining to the interpretation, administration and enforcement of the Internal Revenue Laws (as well as all other legal matters) the Chief Counsel provides legal guidance and interpretive advice to the IRS, Treasury and to taxpayers.

What does a chief general counsel do? ›

A general counsel, sometimes called GC, chief legal officer, or corporate counsel, is a company's main attorney and primary source of legal advice... The GC typically reports directly to the CEO, because his or her opinions are integral to business decisions.

What is the difference between general counsel and chief compliance officer? ›

Being general counsel and being CCO are very different things. A lawyer, ethically, has a duty to give sound legal advice and to represent the client's interests “zealously.” The compliance officer's mission is sub- stantially different: it is to do what- ever it takes to prevent and detect misconduct

What is the hierarchy of corporate counsel? ›

Typical ones in-house are (from junior to senior): Associate Counsel (rare), Counsel, Senior Counsel, Assistant General Counsel (rare), Associate General Counsel, Deputy General Counsel, General Counsel, and Chief Legal Officer.

What skills do you need to be a chief legal officer? ›

CLOs must possess strong initiative, as well as excellent management and leadership skills and strong business acumen. A juris doctor (JD) and an applicable state license to practice law are required. The level of experience required for the position may vary, depending on company size.

What is the CEO of a law firm called? ›

The large law firm operates with the Managing Partner (or law firm CEO) at the top—the King.

Who reports to the chief legal officer? ›

A general counsel may need to represent the company in court and during private legal matters. This role typically reports to the chief legal officer and people in this role may be promoted to chief legal officer. A CLO is more of a senior-level role.

Is a general counsel an executive? ›

A general counsel is a more traditional executive in a company. The GC focuses on managing a company's legal compliance and corporate governance. The general counsel role is also more closely aligned with a high-level lawyer which ensures the company's legal obligations are all met.

What is a managing counsel? ›

Also referred to as: Managing Counsel. Managing Attorney oversees the activities and work-products of attorneys and support staff. Provides leadership and participates in the most complex legal actions. Being a Managing Attorney directs law office operations, case assignments, and staffing.

What is the difference between general counsel and deputy general counsel? ›

The general counsel of a company is the lead attorney in a company or organization. A deputy general counsel is second-in-command, helping the general counsel oversee the other lawyers in the department and provide legal advice to cases affecting the business.

What is the role of general counsel in compliance? ›

Legal counsel is primarily in charge of contract drafting, negotiation, and review; compliance handles violations of the Code of Conduct, policies and procedures, or other wrongdoing by those employed or engaged by the organization.

Should general counsel report to COO? ›

The standard lawyer viewpoint: the General Counsel should always report directly to the CEO, and that General Counsel should automatically have management authority over Legal's people, operations, and budget.

What makes a good Chief Compliance Officer? ›

CCOs are responsible for establishing standards and implementing policies and procedures that prevent non-compliance. To be effective in your role, it is essential to communicate clearly and have the respect of other employees in the company.

What is the highest a corporate lawyer can make? ›

While ZipRecruiter is seeing salaries as high as $333,917 and as low as $10,772, the majority of Corporate Lawyer salaries currently range between $92,537 (25th percentile) to $122,403 (75th percentile) with top earners (90th percentile) making $310,905 annually in California.

What is the highest position in corporate law? ›

The chairman of the board of directors holds the highest position in a company. He or she leads the board and top officers in managing all aspects of the company's business.


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