Corporate legal teams’ response to economic pressures varies from complete hiring freezes to budget trims and delays to strategic projects. But one option — doing nothing — is not on the table.

In the quest for new efficiencies and consolidated resources, several General Counsel and legal talent professionals share how to avoid decision paralysis and start rightsourcing teams and practices.

It all begins with your budget.

As painful as it might feel, says Renuka Drummond, General Counsel, IDG, Inc., it’s necessary to get a really “detailed look at every single line item in your budget.” From there, delve into the following areas, frame questions to dig deeper and find areas of duplication, and identify ways to rightsource the resources needed for Legal to deliver.

• Local counsel

In each jurisdiction, identify how many local counsels you are using. If there is a handful on your roster, you’re not alone. Determine if winnowing the list to one or two firms can yield some savings. For example, Drummond says that for companies with large IP portfolios like hers, it may be possible to consolidate to one agent of record and lose some local representation, which in turn could create back-office efficiency.

• Outside law firms

Private law firms face economic pressure, too, with announcements of delayed starts for associate classes and staff layoffs commonplace. It is an opportune time to discuss rates with outside counsel and possibly renegotiate them. Inquire why some blended rates are higher than others. If it’s a staffing issue, ask if a partner is necessary for the matter or if a mid-level or a junior associate could handle it.

• Industry Benchmarks

General Counsel often feels that they should know everything about legal services. But when Jacqueline Lee, Vice President, General Counsel, of Flynn Restaurant Group, shifted from that mindset and began reaching out to people more knowledgeable than her, she discovered some of her best ideas.

Lee taps into her network of professionals, from legal tech, pricing, and alternative fee arrangement folks to legal service providers and others. She has found instances of competitors paying far less for the same services and delved into fixed fees by phase for litigation.

Vendors, peers, and interim attorneys all have market intelligence to share. Most are excited to apply best practices to support friends and clients and are waiting to be asked. Tracy Scanlan, Vice President of Client Development and Legal Affairs at Paragon Legal, often hears from General Counsels who wonder if they are the only ones struggling with work overflow, unpredictable business demands, and talent shortages.

Scanlan thinks that getting a third-party perspective by speaking with respected people in the industry can help GCs show their leadership team, “Hey, we’re not the only ones facing this … and this is what I think we can do to help our company.”

• Now or later. Time and energy.

“Most legal teams are smaller than everyone wants them to be. You can’t tackle everything all at once,” says GC Drummond. Her best hack? Prioritization.

For example, when dealing with a strategic initiative to be completed in a three-year timeframe, she could have easily felt thwarted by current budget restraints. Instead, she recommends playing the long game along with some short-term “for now” steps. Determine which clearly defined priorities, such as revenue generation, can be met in the next quarter and what needs to wait for later.

The top priority for Drummond was to gain approval on the critical aspects of the project. She put phase two to the side but still in view and ready to tackle once the top priority was met. Not wanting to lament about what Legal had to give up now, she reframed to ask, “Is this the best way I can use my time and energy?”

Rightsourcing in an era of new efficiencies for GCs Drummond and Lee meant bringing on flexible-hire lawyers to support high-priority projects as well as to cover daily demands while in-house attorneys focused on milestone events.

Paragon’s Megan Kelly, Director of Attorney Development, continues to see how flexible legal talent can jumpstart in-house rightsourcing efforts. Not only does Legal gain a person hitting the ground and the immediate help needed, but new resources can be parlayed into long-term support once pressure eases.

To avoid decision paralysis and optimize legal resources for success, start by thoroughly examining your budget and identifying areas of potential savings. Consolidate local counsel and renegotiate rates with outside law firms, leveraging industry benchmarks and seeking third-party perspectives. Prioritize initiatives and consider flexible legal talent to support high-priority projects and long-term growth.

“Juneteenth has never been a celebration of victory or an acceptance of the way things are. It’s a celebration of progress. It’s an affirmation that despite the most painful parts of our history, change is possible—and there is still so much work to do.” – Barack Obama

How are you going to celebrate Juneteenth this year? Will June 19th be just another day off from work, or will you take time to attend a celebration in your hometown, to visit a Black museum, or eat out at a Black-owned restaurant? Maybe you will prefer to stay in and bake red velvet cupcakes while watching a good movie. Here are some recommendations for ways to celebrate our progress in the fight for equality and the rich history and culture of Black Americans.

• Make going to a museum your new Juneteenth tradition.
  18 Black Museums to Visit Across the U.S.
• The San Francisco Museum of the African Diaspora offers a free in-person event.
  Juneteenth Freedom Day @MoAD
• Read an article or listen to a podcast to learn more about Juneteenth.
  Juneteenth: The History of a Holiday
• A great way to commemorate Juneteenth is to support Black-owned businesses.
  Black-Owned Book Stores You Can Shop Online
  20 Historic Black-Owned Restaurants You Need to Eat At
  31 Black-Owned Beauty Brands That Belong on Your Top Shelf
• Check out these movie recommendations to remember the struggle and celebrate Black culture.
  Looking for Black Movies to Watch for Juneteenth?
• Red is one of the colors associated with Juneteenth. Raise your glass to celebrate with red hibiscus sweet tea.
  Juneteenth Red Foods and Drinks

ChatGPT has taken the world by storm and the legal industry is no exception. While some are feeling breathless at its arrival others have already embraced the technology into the products they provide. What few have raised are the very real ethical concerns that using ChatGPT presents to attorneys. A review of the Model Rules of Professional Conduct, the Terms of Use for ChatGPT and its FAQ, show that attorneys risk ethical violations if they choose to use ChatGPT in providing legal services to their clients.

Most states have adopted a version of the Model Rules of Professional Conduct (MRPC) and require that an attorney maintain the confidentiality of client information. In MRPC 1.6: Confidentiality of Information, the first subsection (a) states, “A lawyer shall not reveal information relating to the representation of a client unless the client gives informed consent, the disclosure is impliedly authorized in order to carry out the representation or the disclosure is permitted by paragraph (b).” Paragraph (b) lists seven exceptions to breaking confidentiality, such as “to prevent reasonably certain death or substantial bodily harm”, but none of them are using technology to do some or all work related to a client representation. As such, any attorney wishing to use ChatGPT to perform services related to the representation of the client must first obtain the client’s consent. Paragraph (c) goes on to state, “A lawyer shall make reasonable efforts to prevent the inadvertent or unauthorized disclosure of, or unauthorized access to, information relating to the representation of a client.” This raises a concern given how information in ChatGPT is viewable by more than the user and the AI.

Ethical concerns arise because the conversation with ChatGPT is not merely an exchange with a computer program where there should be an expectation of privacy – human beings review user conversations with ChatGPT. Number 5 on the ChatGPT FAQ is “Who can view my conversations?” The answer is “As part of our commitment to safe and responsible AI, we review conversations to improve our systems and to ensure the content complies with our policies and safety requirements.” Number 6 is “Will you use my conversations for training?” The answer is “Yes. Your conversations may be reviewed by our AI trainers to improve our systems.” If you were to discuss information you did not intend to when providing ChatGPT a prompt, you’re not able to delete it, as noted in the answer to question number 8, “No, we are not able to delete specific prompts from your history. Please don’t share any sensitive information in your conversations.” [emphasis added]. The FAQ makes it clear that there should be no reason to believe your conversation will be kept safe from human eyes.

Ethics rules experts might recall comment 19 to MRPC 1.6 which contemplates entering into a confidentiality agreement to ensure any client information that is transmitted or disclosed will be kept in confidence. From comment 19, “Factors to be considered in determining the reasonableness of the lawyer’s expectation of confidentiality include the sensitivity of the information and the extent to which the privacy of the communication is protected by law or by a confidentiality agreement.” However, in the ChatGPT Terms of Use, there is no protection for confidential information. In section 5, “Confidentiality, Security and Data Protection” it states, “Confidential Information means nonpublic information that OpenAI or its affiliates or third parties designate as confidential or should reasonably be considered confidential under the circumstances, including software, specifications, and other nonpublic business information.” Information provided in your conversations to ChatGPT is excluded from that definition and afforded no protection. This is surely the reason that ChatGPT expressly cautions against sharing sensitive information in your conversations as noted in the FAQ excerpt above.

Attorneys have a professional responsibility to be competent in their practice as established in MRPC 1.1 Competence. Comment 8 to rule 1.1 states that “To maintain the requisite knowledge and skill, a lawyer should keep abreast of changes in the law and its practice, including the benefits and risks associated with relevant technology, engage in continuing study and education and comply with all continuing legal education requirements to which the lawyer is subject.” ChatGPT is a perfect example where the apparent benefits need to be weighed against the risks associated with using it. Work can be greatly accelerated, but what if the lack of confidentiality exposes your client to an unforeseen risk? You reviewed a competitive bid for your client more quickly using ChatGPT, but it ended up being seen by a QA analyst at OpenAI who has no obligation of confidentiality and whose spouse works for your competitor. It’s the job of an attorney to think through these potential risks and consider whether they can competently employ ChatGPT without compromising their ethical obligations to the client.

A breach of client confidentiality is not only an ethical concern, but it also risks a waiver of attorney-client privilege. For attorney-client privilege to be established, the communication must be between the attorney and the client and concern seeking or providing legal advice. To maintain the privilege, the communication must be kept confidential. If the communication is then used in a prompt to ChatGPT then it has not been kept in confidence and this would constitute a waiver of attorney-client privilege. As such, preserving attorney-client privilege is another reason that lawyers need to be extremely cautious about leveraging AI to provide legal services.

There are ways that AI can be used ethically to reduce the time that lawyers spend on work, but most of those are related to automation of administrative tasks. That’s still a great thing. Lawyers need more time to exercise their expertise and so, for example, using AI to automate the storage of executed contracts is a great way to do that. However, encumbering AI with the exercise of their expertise is invariably going to give rise to ethical concerns that will need to be addressed before being adopted. 

About the Author

As Pramata’s general counsel and chief evangelist, Foster Sayers is passionate about using his technical knowledge to help legal professionals be more effective. Previously, Sayers was corporate counsel for Vertafore, where he led the company’s transformation of the contract lifecycle and automated the processes for organizing, storing and digitizing the company’s executed agreements using Pramata. He also co-founded 121Nexus, a business with QR code technology solutions for the pharmaceutical and biomedical industries. Earlier in his career, Sayers held in-house counsel positions for companies in industries such as manufacturing, video and IT. Sayers has a law degree from Florida State University College of Law and a bachelor of arts degree in international politics and Japanese from Penn State University.

Pramata makes contract management radically simple. With Pramata’s end-to-end solution, legal teams can easily and accurately manage the entire contract lifecycle – from request to renewal. Pramata does the heavy lifting to give companies the precise contract insights they need and help legal teams provide unparalleled value to the business.

While the achievements of women can be celebrated year-round, Women’s History Month offers us all a specific opportunity to deepen our understanding of the contributions women have made throughout history.  Below, we’ve outlined some content recommendations from our Corporate Team in the hope that you’ll find something new and engaging, too. 

• Earlier this year, our DE&I Book Club watched Writing with Fire, a documentary on the Dalit women journalists of India’s all-female Khabar Lahariya (“News Wave”) newspaper.  In addition to viewing the film, we had a group discussion and pursued related content including this Interview with the film’s producers.  The film is available to stream on Apple TV, Amazon Prime Video, and Youtube. 
• In late February, Justice Ketanji Brown Jackson, the first Black woman to serve as a Supreme Court Justice, wrote her first Majority Opinion for the Supreme Court.
• Genentech’s Chief Diversity Officer, Quita Beeler Highsmith, was interviewed in  Diversity Woman Media’s Inclusion Magazine.  As the first chief diversity officer in the 46-year history of the company, Highsmith is “responsible for enterprise-wide strategic initiatives that drive business impact by investing in commercial efforts, stakeholder engagement, research innovation, and community relations.”
• In 2022, Famy Chavosh and Mayram Quasto became the first two participants in Paragon Legal’s DE&I Career Connect Program.  Read more about the Program in Paragon’s Diversity Report. 
• The American Bar Association’s Celebration of Women’s History Month shared a variety of resources, including stories on Trailblazing Women and a Toolkit for Allies in Gender Equality.
• Originally published in 2020, UNLADYLIKE2020 presents the stories of 26 trailblazing American women in the form of 26 animated documentary shorts and a one-hour special. 
• In February, we published a Paragon Employee Spotlight on Paragon President & COO, Jessica Markowitz, and CEO, Trista Engel, co-leaders that represent the first female search fund partnership to acquire a U.S. business.
• NBA fans – especially #DubNation – may recognize the Golden State Warriors’ latest “City Edition” jersey but may not know the backstory.  Learn more about Allison Hueman’s bold, first-of-its-kind jersey-design in this Datebook Feature.

For companies in technology, life sciences, consumer goods, and other sectors, the new year began with headlines announcing layoffs and reductions-in-force in the double digits. 

The shift away from recent boom times and easy money is widespread. Three out of four corporate legal departments are experiencing a strain on “legal department resources, budget and/or capacity,” according to The General Counsel Report 2023. The impacts extend beyond hiring freezes to include putting backfilled positions on ice and deepening oversight of budgets. 

Taming the Unknown

Uncertainty is hardly new for legal departments. Managing risk is their core mission. But the challenge of taming the unknown collides with a period of enormous scrutiny of headcounts, legal spend, and profitability. 

When looking to rebuild the department, technological innovation can only lift so much, and may even trigger issues elsewhere.

As workplaces adopt biometric, AI, and other efficiency tools, novel complexities around data security and protection arise, keeping the pressure up for GCs around information security. 

The pace has quickened, and GCs are expected to “be able to adapt at the drop of a hat,” said Celia Perez, General Counsel & Corporate Secretary of FreightCar America, during a webinar analyzing The General Counsel Report 2023. 

Doing Nothing Is Not an Option

“Nearly every conversation I have today with a GC or CLO begins with ‘I need help. Demands on the legal department keep growing, and I just don’t know how to read the market,’” says Tracy Scanlan, Paragon’s VP of Client Development & Legal Affairs.  

Scanlan hears from GCs who are stuck between critical projects and goals that support the business and less capacity to achieve them. They say that they are loath to invest time and effort in the FTE hiring process as downward pressure on markets persists.

What certainly will continue is expanded expectations of legal departments. Today, GCs are asked to function like a secretary of state for their CEOs, developing and deploying skills in diplomacy, geopolitics, public health, and emotional intelligence. 

Two years ago, Environmental, Social, and Governance (ESG) initiatives did not even rate as a top risk in The General Counsel Report published annually. In 2023, GCs considered ESG a top-five risk they now need to manage. 

Additionally, GCs are part of reputational risk management efforts.

Recent layoff announcements have included mea culpas and apologies for overhiring during the pandemic. Says Scanlan, “Hiring reticence is understandable, yet inaction is not really an option when workloads and expectations keep growing.” 

Flexibility is key to taming uncertainty, suggests Scanlan. Here are a few options for legal departments rebuilding amid a volatile landscape. 

• Alternatives to New Headcount 

Of course, having a team filled with star players is the dream. Yet the process of hiring a full-time employee has never been more challenging. 

The investment of time and money. Identifying and wooing the right candidate. Extensive interview rounds and complex negotiations on the front end. Then comes onboarding, training, and ramp-up time. And should the fit not work, there’s the termination process, severance, and the hit to morale and efficiency on the back end. 

Bringing in the right interim attorney can bring legal teams closer to the ideal in an uncertain market. 

On-demand options have grown significantly, and legal departments are becoming more creative and receptive on how they fill critical gaps in talent — and meet deadlines.

Consider the experience of one Bay Area tech company. The legal team had to determine several compliance challenges of a national rollout of a new product. The business looked to legal to support a program to build data protection into various phases of product development, which, in turn, could save the company the expense of remediation later. 

At one time, the legal team had the bandwidth to deliver the project. But two key team members were out on leave. Product teams were antsy, and department resources stretched to the limit. 

The company had instituted a hiring freeze — a new FTE was not an option. Engaging an entourage of attorneys from a costly outside law firm was an expensive option certain to be scrutinized. Instead,we suggested and placed a highly skilled, two-attorney, data security team hired on a project basis.

The Paragon attorneys delivered for the GC. 

As privacy specialists deeply emerged in the field and armed with market intelligence and best practices, the Paragon team completed the project quicker than FTEs would have. Furthermore, they raised several unique business-related issues previously unknown to the GC. 

Perhaps the most enduring value for our tech client was that the GC found one of the temp attorneys such a strong fit with the department, he later offered her a full-time role with the company. 

• High-Value, Low-Commitment Options

The temp-to-permanent model is one of several high-value, low-commitment options allowing legal departments to exert flexibility. 

Another flexible point for law departments centers around “quiet quitting” and workplace burnout. The stream of staff cuts has resulted in reallocation of work and repurposing of roles. The ubiquitous mantra of “do more with less” seemed to be manageable, at first. 

But now we are hearing from GCs that extra burdens add up over time and exhaustion mounts. “Teams that were once robust are beginning to feel overwhelmed. It may take one attorney going on an unexpected leave for the department to reach breaking point,” Scanlan says. 

Bringing on an interim attorney to concentrate on the daily workload not only gets the immediate job done. It contributes to a culture of well-being and sends a positive message to current employees before burnout emerges. 

• Maximize Expertise

General Counsel typically turn to outside law firms for extra depth and expertise in litigation, employment law, intellectual property, and other areas. 

With law firms giving themselves healthy rate hikes in 2023, the cost of specialized knowledge has become more expensive. 

To access the practice-critical depth needed without the full-freight fare of an outside law firm, GCs are finding great value in Paragon’s model. Many of Paragon’s attorney experts in data security, contracts, and regulatory compliance are veterans of Big Law who opted out of law firm lockstep for the flexibility of Paragon’s model. 

The old notion that an interim attorney ‘can’t get a real job’ has never been further from the truth, according to Scanlan. She explains that Paragon supports a vast network of experts in their legal fields; these attorneys’ knowledge and agility are creating great value from GCs without sacrificing quality of work product. Quality assurance starts with Paragon’s highly selective candidate vetting process — fewer than 5% of applicants are accepted. 

• Invest a Little to Gain a Lot

Hiring caution is an understandable response to uncertainty. 

We hear most GCs initially hesitate before exploring the on-demand option because they fear the time and administrative burden required to onboard and train a new person.  

It’s too easy for a CLO to think it would be quicker to do the work themselves, but it’s a false economy. Spending time on lower-level tasks diverts leaders from the strategic work that is their true calling. Taking on that extra burden in the name of economizing today may carry a surprise price tag tomorrow.

One biotech company CLO was in that exact position when she came to us. 

Her contract team was short-staffed, the search for a FTE stalled, and the department under pressure to expedite the contract approval process for a new product line. 

Following a brief but insightful conversation with the CLO, we identified a few commercial attorneys who could turn the situation around. Once the CLO selected their ideal candidate, we streamlined the onboarding process by leveraging our knowledge of the many systems used by legal departments.

Rebuilding teams to meet company missions in this turbulent era is likely to be an incremental process undertaken carefully. Those who opt for stasis over taking the first step may find themselves in a struggle to stay valuable, competitive, and relevant. 

Looking for new options to rebuild the team? Have a critical project due soon? Contact us to find out how Paragon attorneys can add peace of mind in an uncertain market.