Corporate legal departments are facing unprecedented challenges in today’s rapidly evolving business landscape. From global economic uncertainties to technological disruptions, the pressure on in-house legal teams has never been greater. Yet, within these challenges lie opportunities for transformation and innovation.

Recent surveys reveal a startling statistic: 99 per cent of in-house legal departments report being understaffed for their current workload. This resource constraint, coupled with increasing regulatory demands and complex business needs, has created a perfect storm that demands new solutions.

The traditional model of static legal team structures is giving way to more dynamic, flexible approaches. Legal operations have emerged as a crucial function, with teams using technology and data analytics to optimise workflows and resource allocation. Forward-thinking legal departments are also implementing self-service tools, automated and AI solutions for routine tasks, and regular “legal clinics” that provide efficient channels for business partner engagement.

Team wellbeing has become a critical focus, with 63 per cent of legal team members reporting burnout symptoms. This has prompted a reassessment of work arrangements and support systems. While remote work offered flexibility during the pandemic, many legal leaders are finding that a hybrid approach, with intentional in-office collaboration time, builds team resilience and promotes knowledge sharing.

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The rise of flexible legal talent has emerged as a key solution for managing workload fluctuations and specialised needs. With 94 per cent of departments now utilising flexible talent solutions and 40 per cent planning to increase their investment in this area, it’s clear that the future of legal departments will be more fluid and adaptable than ever before.

Technology use and adoption of new tech such as AI remains a challenge, particularly in legal departments of technology companies – a surprising case of the cobbler’s children having no shoes. However, the push towards digital transformation is inevitable. Legal teams are increasingly focusing on data collection and analysis to drive decision making and resource allocation.

Looking ahead, successful legal departments will be those that can balance multiple priorities: maintaining high-quality legal support while managing costs, fostering team wellbeing while meeting business demands, and embracing innovation while preserving essential legal judgement and expertise.

The path forward requires a multifaceted approach:

1. Embrace technology and data-driven decision making: Begin by implementing matter management systems to track workload and identify patterns. Use analytics to understand which business units generate the most legal work and why. Create dashboards to monitor key metrics like response times and resource allocation. Start small with automation of routine tasks like NDA processing or contract reviews.
2. Develop flexible staffing models that can adapt to changing needs: Build relationships with flexible talent providers/ALSPs before urgent needs arise. Create clear onboarding processes for flexible staff. Maintain a roster of trusted legal services contractors for specific practice areas. Develop clear scope documents and success metrics for project-based work. Consider implementing regular pulse checks with flexible talent team members.
3. Implement demand management strategies: Set up regular legal clinics where business partners can get quick answers. Create self-service tools for routine matters. Establish clear prioritisation criteria for legal requests. Develop service level agreements (SLAs) with key business units. Build an online knowledge base of frequently asked questions and common solutions that business partners and team members can use.
4. Focus on team wellbeing and sustainable work practices: Conduct regular one-on-one check-ins focused on workload and stress levels. Create clear boundaries around working hours and response times. Implement a buddy system for support during high-stress periods. Provide training on time management and stress reduction. Encourage regular breaks and use of annual leave.
5. Build stronger partnerships with business units through engagement models: Assign dedicated legal partners to key business units. Conduct regular meetings with business partners as well as satisfaction surveys. Provide training sessions on common legal issues. Create clear escalation paths for urgent matters. Develop metrics to track the effectiveness of business unit partnerships.

The corporate legal function is evolving from a traditional support role to a strategic business partner that must be both agile and resilient. Success in this new era requires rethinking and even abandoning old and ineffective models in lieu of embracing new ways of working. Those who adapt will not only survive but learn how to thrive at the pace of change in the legal industry.

The future of corporate legal departments lies not in simply doing more with less but in working smarter through innovation, flexibility, and strategic resource allocation. As we navigate through these uncertain times, the opportunities to reshape the legal function for greater effectiveness, efficiency, wellbeing, and sustainability have never been clearer or more promising.

Jacob Flax is the managing director and country head of Axiom Australia.