LDaaS: Let legal support your growth

In this article, you can learn more about Legal Department as a Service and read about three specific cases where your business can benefit from business-oriented and flexible legal support to accelerate growth.

Many businesses reach a point where legal matters can no longer be handled on an ad hoc basis, while the need is still not significant enough to justify building a fully-fledged internal legal function. This is typically where friction starts to emerge: contracts become more numerous and complex, customers make greater demands, and questions that were previously handled by sales, the CFO or external lawyers now require a different form of support.

This is where Legal Department as a Service, or LDaaS, becomes relevant. LDaaS is an alternative to both traditional external legal assistance billed by the hour and a fully-fledged internal legal department. The business gains a legal function that is close to the business, understands the context and can provide ongoing support in everyday operations – while also giving the business access to specialist expertise when needed.

This makes a difference when the business has become too complex for legal matters to sit somewhere between sales and finance, but does not yet have a need for a full internal legal function.

For CEOs and other decision-makers, the point is simple: when legal is integrated into daily operations, it strengthens the company’s risk management, commercial decision-making and ability to grow in a controlled manner.

This becomes particularly clear in three typical situations, which we have brought together here, where the need for an LDaaS solution often becomes apparent.

The first challenge typically arises in businesses that do not have an internal lawyer and therefore only use external legal assistance in specific situations. This may be when something has gone wrong, when a particularly complex contract needs to be entered into, or when the business is moving into an area it is unfamiliar with. However, it is rarely in these extraordinary situations that the biggest gap becomes apparent. It is in everyday operations.

As the business grows, the number of contracts increases. Customers become larger. Agreements become more complex. Counterparties introduce their own terms and conditions, and questions arise regarding liability, risk allocation, data security, supplier obligations and commercial compromises. These are not necessarily questions that each justify involving an external lawyer. But they are not questions that sales should have to handle alone either. It is not only about risk management.

It is also about speed. When legal questions arise in the middle of a sales process, negotiations take longer, momentum is lost and conversion rates decline. It is the conversion that creates results, which is why the sales team needs a legal sparring partner who can quickly assess what constitutes a genuine risk and what is simply a negotiation point.

In many businesses, this is exactly what happens. Legal matters are handled as best they can be within the sales organisation because there is no integrated legal sparring partner available in everyday operations. This creates bottlenecks, uncertainty and variation in the way the business enters into agreements. Over time, it also gives an unclear picture of the risks the business is actually taking on.

How LDaaS can make a positive difference:

• Provides quick legal support close to the business. Sales and other key functions gain access to quick clarification when questions arise, so decisions are not made based on assumptions or a vague sense of uncertainty. We not only help clarify what is legally sound, but also prepare solutions that work both legally and in practice.

• Creates greater consistency in agreements and risk assessments. With an integrated legal function, contracts, terms and conditions, and assessments are handled more consistently across the organisation.

• Reduces reliance on ad hoc external legal assistance. LDaaS makes it possible to handle ongoing legal questions more smoothly, without having to escalate everything to an external lawyer.

• Strengthens management’s overview and decision-making. When legal assessments are not scattered across the organisation, management gains a better view of the company’s overall contract and risk profile.

Many projects begin with a clearly defined scope, a price and a schedule. Along the way, however, changes often arise: the customer requests new elements, the schedule becomes compressed, the customer’s assumptions no longer hold, or the supplier takes over tasks that were not part of the original agreement.

There is nothing unusual about this in itself. The challenge arises when the changes are not consolidated and translated into clear agreements about price, time and responsibilities. This increases the risk of misunderstandings, delays, unpaid invoices and a collaboration that becomes unnecessarily strained.

A classic example is an IT project in which new requirements and adjustments are continuously added to the original agreement without being formally addressed. The result is a project that ends up costing twice as much and involving significant delays. Another example is a construction project in which changes to materials, design or execution during the project lead to the budget being used to offset market fluctuations, while the completed building ultimately fails to meet the requirements users have in their everyday lives.

The common factor is that each individual change appears small and reasonable. It is the sum of the changes – and the lack of written follow-up – that creates the conflict and erodes the margin.

How LDaaS can make a positive difference:

• Identifies changes at an early stage. LDaaS makes it possible to respond as soon as the project starts to deviate from the original agreement, before small deviations develop into major problems.

• Creates clarity about the consequences. The legal function helps clarify what changes mean for price, schedule and responsibilities, so both parties work from the same understanding.

• Gives project managers quick legal support in everyday operations. The project organisation gains access to practical legal support regarding what needs to be communicated, documented and, where relevant, approved by the customer.

• Strengthens documentation and reduces conflicts. When changes are consolidated on an ongoing basis, the business is in a stronger position if disagreements later arise concerning the delivery, finances or the course of the project.

Many businesses only realise the importance of compliance when they begin selling to larger customers or operating in more regulated industries, such as the financial sector, pharmaceuticals or the public sector. In these situations, it is not enough to have a strong product or a good commercial case. Customers will often also request questionnaires, documentation requirements and compliance assurances that the business may not be sufficiently equipped to handle. Can the business document its whistleblower scheme? How does it respond to requests concerning processes, controls and governance? What is actually required to be considered as a supplier?

It is therefore misleading to view compliance as a purely legal or administrative matter. For many businesses, it is just as much a sales issue. If the business cannot meet the market’s requirements, there is a risk that it will be rejected before the real competition even begins.

How LDaaS can make a positive difference:

• Maps the requirements the business actually faces. LDaaS helps create an overview of the compliance requirements customers and the market impose, so the business knows what to prepare for.

• Ensures the right level of ambition. Instead of overcomplicating solutions, the business receives help prioritising what is necessary and relevant in relation to size, customer types and risk profile.

• Strengthens the sales process. The business receives support in responding to customer requirements and questionnaires in a more qualified manner, so compliance increasingly becomes a gateway to new customers rather than a barrier.

• Creates ongoing resilience. Because requirements and expectations change over time, LDaaS provides the business with a continuous legal sparring partner who can help keep its level relevant and aligned with the market.