Amid persistent economic uncertainties, emerging technologies, and evolving regulatory frameworks, enterprise organizations have been forced to re-evaluate their approach to business operations. This has put a lot of weight on in-house legal departments, whose traditional roles as risk mitigators have now expanded into business enablement.

Delivering on these broadened responsibilities comes with complex challenges capable of limiting the value these teams contribute to their organization.

In this guide, we will discuss some of these challenges alongside measures to effectively address them.

What is an enterprise legal department?

An enterprise legal department refers to an in-house legal unit responsible for managing all legal matters related to a large organization. Unlike law firms, which serve multiple clients, enterprise legal teams are dedicated solely to the legal needs of a single entity.

They often comprise lawyers, legal ops professionals, paralegals, and administrative staff. 

The actual number of legal professionals in an enterprise legal department varies by company size. But according to ACC, organizations with revenue between $1 billion to $5 billion have an average of ten lawyers and 17 legal staff. Those above $20 billion have an average of 80 lawyers and 145 legal staff.

Functions of an enterprise legal department

At its core, an enterprise legal team is responsible for addressing its organization’s legal concerns. This covers a wide range of things, including:

• Contract review and negotiation: Drafting, reviewing, and negotiating contracts related to various business activities.
• Regulatory compliance: Ensuring the organization adheres to all relevant laws and regulations.
• Litigation management: Managing legal disputes or collaborating with outside counsel to represent the organization in court proceedings.
• Risk management: Identifying and mitigating legal risks.
• Intellectual property protection: Protecting the organization's intellectual property assets, such as patents, trademarks, and copyrights.
• Corporate governance: Advising on corporate governance matters and ensuring compliance with corporate laws.

Difference between an enterprise legal department and a small business legal department

While both enterprise and small business legal departments serve the purpose of providing legal advice and support, their scope, resources, and level of complexity differ significantly due to the composition and size of the organizations they serve.

Structure and size

• Enterprise legal departments: Typically found in large organizations with complex structures and multiple divisions. They often employ a larger team of legal professionals, including specialized attorneys, paralegals, and legal operations staff.

• Small business legal departments: Usually consist of fewer legal professionals, often with a single in-house counsel or a small team. 

Scope of responsibilities

• Enterprise legal departments: Handle a wider range of legal matters, including corporate law, mergers and acquisitions, intellectual property, and regulatory compliance in multiple jurisdictions. May have specialized teams for different areas, such as data privacy, environmental law, and international law.

• Small business legal departments: Typically focus on core legal processes, such as contracts, employment law, and general business advice. Team members often wear many hats but may outsource more complex legal matters, such as litigation or regulatory compliance, to outside counsel.

“At fast-growing companies, most work gets done in the eleventh hour. The management tends to be extremely pushy, and therefore, the legal team is expected to come up with ad-hoc solutions. Enterprises, however, are more structured as they want the legal team to envisage disputes and develop solutions that would work in the long run.” 
~ Sandeep Chowdhury, Group GC, HCC Ltd.
Transforming the Legal Function at a Large Enterprise

Technology and resources

• Enterprise legal departments: Due to their scale of operations, they are often more inclined to invest resources into sophisticated technology solutions for processes like high-volume contract management, compliance tracking, and legal analytics.

• Small business legal departments: Typically prioritize basic solutions catered to their immediate needs.

Top challenges for enterprise legal departments

Enterprise legal departments face a wide range of challenges, driven by the scope and complexity of their work, as well as the dynamic nature of the modern legal ecosystem.

Here are some of  the top challenges that come to mind:

#1 Managing contracts at scale

Enterprise legal teams are often dealing with an ever-increasing influx of contracts at any given time, each with its unique complexities and requirements. A study by Bloomerglaw and ALM revealed that 4 in 10 corporate counsel spend half their day doing contract-related tasks.

Their role is to ensure each contract is drafted with the right provisions, adequately reviewed, negotiated, and executed in a way that protects the organization’s best interests.

However, managing high volumes of contracts is a growing challenge for enterprise legal departments, especially in organizations that depend on manual processes and outdated systems.

This leaves them constantly exposed to risks of errors, delays, disputes, cost overruns, and revenue loss.

Also read: Enterprise Contract Management: What You Need to Know

#2 Integrating technology

The legal industry is currently at the cusp of transformation, with technology advancements making inroads at a rapid pace.

More organizations are embracing legal technology, with Gartner projecting the legal tech market to hit $50 billion by 2027.

However, introducing new legal technologies often requires overhauling traditional approaches and legacy systems, which can face resistance from lawyers accustomed to their existing workflows. 

Owing to their non-technical background, many in-house legal departments lack personnel skilled in emerging technologies such as eDiscovery, contract lifecycle management, and data analytics. 

This impedes the effective use of technology in streamlining operations and fostering productive decision-making.

#3 Compliance and risk management

The compliance landscape is evolving at an unprecedented pace in 2024, thanks to factors like:

• Emerging technologies— Revolutionary technologies like Artificial Intelligence (AI) and cloud computing have transformed how organizations operate, paving the way for new opportunities. However, they have also given rise to numerous, constantly evolving regulatory policies, especially those related to data privacy, cybersecurity, and environmental sustainability.
• Globalization— As businesses expand into new markets, they’re introduced to a complex web of laws and regulations in different jurisdictions.
• Volatile socio-economic conditions—Economic fluctuations, geopolitical events, and social unrest can create new compliance risks and necessitate changes in compliance strategies.

Legal teams across enterprise organizations are under more pressure to manage all these regulatory requirements while staying abreast of the latest developments. The rapid pace of change means they must continuously adapt their approach to risk mitigation, ensuring that their organizations remain in tune with the ever-evolving regulatory landscape.

Also read: Legal Risk Management: From the Playbook of 11 GCs & Leaders

#4 Resource allocation and management

In a report by Axiom, General Counsel (GC) in the United States “overwhelmingly” say their teams do not have sufficient resources across the board. This includes budget, staffing, technology, and other facilities legal departments need to do their jobs effectively.

96% of surveyed GCs reported an average of 11% reduction in budget. In enterprise organizations, the average budget cut was 13%.

This comes as organizations continue to struggle amid economic uncertainties. Operational efficiency has become a new mantra, with legal departments facing intensified pressure to do more with less.

#5  Cybersecurity and data privacy

Enterprise legal departments have access to large volumes of critical data, including client information, contract details, and financial records. This makes them a target for cybercriminals who are constantly looking for opportunities to initiate security breaches.

According to Checkpoint Research, the legal industry suffered an average of 1055 cyber attacks per week in 2022, marking a 13% increase from previous years.

With cybersecurity and data privacy laws getting more stringent and constantly evolving, enterprise legal teams must stay in the loop and incorporate necessary mechanisms to ensure the safety of sensitive information. 

This entails having a deep understanding of cybersecurity best practices, incident response plans, and data governance frameworks.

Also read: Writing a Company Cybersecurity Policy: Best Practices + Free Template

#6 Strategic alignment

More organizations are beginning to value legal departments beyond their traditional “legal advisory” job description. More GCs now sit among executives, offering strategic advice that drives business growth.

Thanks to this role expansion, in-house legal teams are required to expand their expertise beyond the legal domain. 

Fitting this new role expansion is a significant challenge as they’re now expected to develop business acumen, acquire technological literacy, cultivate proactive risk management mindsets, and foster cross-functional collaboration to stay relevant in their organizations.

Thriving in the modern legal landscape: how enterprise legal teams can overcome common challenges

In the face of mounting pressures and challenges, the ultimate goal of enterprise legal teams remains the same: to minimize risks and contribute to business growth.

Here, we offer insights into how you can stay on track with these objectives:

#1 Embrace technology

Integrating technology is a crucial step for legal teams that want to stay competitive in the modern business ecosystem. Technology solutions empower teams to streamline high-volume, routine tasks, minimize the risks of errors and burnout, and give them more bandwidth to focus on strategic contributions.

For example, if your organization manages hundreds or thousands of contracts every month, integrating a Contract Lifecycle Management (CLM) platform like SpotDraft can save you from getting buried in manual routine processes like contract reviews, approvals, document storage, and tracking.

SpotDraft offers a comprehensive ecosystem of tools, including AI contract review, data analytics, unified storage, and collaborative drafting solutions. These tools empower you to manage every stage of your contract lifecycle, automating routine areas and helping you accelerate time-to-revenue.

Encourage the adoption of relevant legal tech in your department and provide training support across the board to foster productive implementation.

#2 Strengthen alignment with other units

Fostering collaboration between legal teams and other business units can enhance the overall effectiveness of legal operations. 

Regular cross-functional meetings and joint projects can help legal teams understand the broader business objectives and provide insights that align legal strategies with organizational goals.

“Building rapport and relationships are essential for cross-functional collaboration. We wanted business teams to trust us with their problems. We had to be seen as an approachable team that would find legally binding solutions and enable the business. By attending these meetings, I was able to get a 360-degree view of what the business goals are. These meetings also helped me envisage potential legal clashes.”
~ Bhavna Singh, GC & DPO, Subex Limited
Elevating Legal: Fostering Transparency and Accountability in Large Tech Enterprises

#3 Invest in upskilling and reskilling

To stay ahead in the modern legal environment, leaders in enterprise legal teams must continuously invest in the professional development of their staff. 

This includes upskilling in areas like data privacy, cybersecurity, and emerging technologies, as well as reskilling to adapt to changing business requirements. 

Encourage your legal team members to pursue certifications, attend conferences, and engage in peer-to-peer learning. That way, you can help build a future-ready workforce.

#4 Maintain a regular schedule for performance reviews

Performance reviews and feedback sessions are vital for identifying areas for improvement, recognizing achievements, and fostering a culture of continuous growth. 

Enterprise legal teams should establish a structured schedule for these discussions, focusing on both individual and team performance.

With more responsibilities resting on the shoulders of legal professionals, providing constructive feedback and setting clear goals will help them develop their skills and contribute more effectively to the organization's success.

Conclusion

Enterprise legal departments face complex challenges every day. And with the current developments in the legal industry, they’re under even more pressure to stay agile, constantly readapting their strategies and evolving with shifting compliance environments.

In all this, taking advantage of technology, aligning with business functions, investing in talent development, and implementing feedback should be your top priorities as you work to overcome these challenges and seize the opportunities that come with them.

SpotDraft is at the forefront of CLM technology, helping enterprise legal departments crush their contract management goals and contribute to business growth.

Curious about how it works? Click here to get a personalized demo.