Aligning legal to company strategy, vision and values
This article is aimed at new Head's of Legal and General Counsel and suggests ways to help you develop your legal function's strategy, mission and objectives. This will help put you in the best possible position to support your organisation and elevate the legal function from a mere problem-solver to a genuine business enabler.
There’s no single model for a legal function because all of the businesses that we support are different - although there are many normal requirements of the function. So you’ll need to assess for yourself what your department’s structure and objectives should be. You’ll also need to communicate your strategy clearly and simply to ensure senior management regard your department as a key contributor to the organisation’s success.
Making your department mission critical
The first step in aligning your legal department with the wider organisation is to take a good look at the organisation’s business and market sector and understanding:
- How its offering differs from that of its competitors.
- The organisation’s relationships with its customers and suppliers.
- The means of development and production.
- The distribution chain.
- Any critical infrastructure or other resources.
Now identify the legal heat map i.e. where legal activity is focused (in-house and external lawyers). How does this correspond with the organisation's activities and, particularly, with those areas that are both key to the business meeting its objectives and which involve complex, fast changing or high business impact areas of law?
This will help you assess how the legal team is supporting the organisation and will help identify any underserviced and overserviced areas and whether you're directing your resources and efforts to the people and areas that need them most.
If you work in a commercial organisation, follow the money. Study the financial and management accounts to find out exactly how your organisation makes its profits and where it spends or invests most.
Look at the market your organisation operates in and find out what its competitors are doing. As well as having an impact on your organisation, this could highlight industry-wide legal issues. For example, which new markets are your competitors moving into? Do you have the resources to support your colleagues if they wanted to follow?
Take time to evaluate the organisation’s culture and how your colleagues use the legal function. Do people regard you as:
- A mere provider of legal advice in a crisis? or
- A genuine business enabler who should be involved in big decisions at an early stage?
Also, how do you interact with the senior executives? Could you improve these communications or be more proactive?
Review the company’s strategy and mission statement
Next, get to grips with the organisation’s strategic plan and mission statement. If these aren’t documented, ask senior executives to articulate the vision and summarise the main elements. This will help you make decisions about the legal function and define your own departmental mission statement.
Ensure everyone in your department understands the organisation’s goals and the role each business unit plays in achieving them.
Similarly, aim to be involved in the corporate planning process. You need to understand why decisions are made and at the same time, provide valuable input unavailable from other departments. For the same reasons, encourage your team members to participate in planning activities with the business units they support at departmental level.
The benefits of your involvement in planning and strategy will work both ways. You’ll be able to raise legal and regulatory considerations at an early stage and set realistic expectations for timescales and costs. You can also, through your legal knowledge, help senior management exploit opportunities they may not yet have considered or manage previously unidentified threats.
Listening to your colleagues’ ideas about the legal department's strategy and objectives is essential. Clearly, you won’t want to end up with a laundry list of disparate business wants, however this will help you get a good understanding of common requirements across the organisation. This can also help you to get an aligned view with and between your management colleagues about how and why you are prioritising your scarce resources in working with them over each financial year.
Start by speaking with senior managers and encourage your department members to do the same with their key internal client contacts. Depending on the size of your organisation and your budget, you could also carry out a formal survey. However you gather information, the increased communication with colleagues beyond the day-to-day provision of legal advice will improve your relationships and strengthen those ties. It will also help you to plan ahead so that your team can be effective and efficient - and not over-worked!
Encourage your team members to share their ideas and perceptions about the legal department and how it can satisfy wide-ranging needs across the organisation. And share with them the information you glean from your review of the organisation and its strategy.
Gathering information in this way may be time-consuming but it will help identify any potential roadblocks and concerns within the business and your department. For example, you may not have the skills to support a new business initiative so will need to recruit temporary project or permanent staff or retrain existing staff. It will also help build a departmental consensus, which will help make your strategy cohesive and relevant and your prioritisation decisions more aligned with key business needs.
Create your departmental mission statement
Your departmental mission statement can be the starting point for developing its strategy, objectives and plan. It’s your department’s statement to itself and the rest of the organisation about what it will bring and the role it will play. It will act as a guide and a framework for the department's objectives and help your team interact with internal clients.
Your mission statement should reflect the organisation’s wider strategy and take input from senior executives into account. Consider also:
- The organisation’s needs and perceptions of the legal department;
- What you can realistically deliver; and
- The benefits you can offer the organisation through your department’s skills and competencies.
Review your mission statement regularly to ensure it stays relevant.
Set your objectives
It may be tempting to demonstrate the value of your department by setting out a long list of objectives. However, be wary of this approach. It’s better to set fewer objectives, each of high value, and achieve them all. Remember, your business colleagues won’t measure you on the number of targets you hit, but on the value you bring and the contribution you make in helping them achieve their goals.
Always prioritise activity that will bring the highest revenue or cost savings to the organisation and support its strategic initiatives. Try to ensure that this prioritisation is shared and agreed with management. This greatly improves your team's relationships with their clients and frequently helps you to make the case for more resource as your clients better appreciate how effective and efficient your team are.
Examine the complexity and cost of each objective and avoid burdening your department with goals that are too complex, uneconomical or too broad in scope. Instead, make then SMART:
- Relevant; and
Share your objectives with your team members and develop their individual key performance indicators around the departmental aims.
Track your department’s performance against its objectives throughout the year and again at year-end when you start planning for the next year. This can be very helpful in budget and resource planning sessions with management as you are using their "language" - numbers - to make your case. Objectives rarely remain static. New issues are bound to emerge, so stay flexible.
If you miss some of your targets, don’t consider it a failure. It’s more likely a sign that priorities have changed and you’ve adjusted accordingly. As you move into next year, take the learnings from this one into account.
Don’t be shy about sharing your mission and objectives with the organisation. On the contrary, tell people about the commitment you’ve made to supporting them.
Use your organisation’s language, terminology and tone of voice when you write your mission statement. As well as creating a seamless fit with the wider plan, it’ll make it easy for colleagues to understand and absorb. Also, explain how each objective is going to support the organisation’s strategy and objectives.
Update senior management about your progress on a regular basis, whether they ask you to or not. This will demonstrate that you’re serious about being a valued business partner.
Aligning your department with the organisation’s strategy, vision and values takes time. You need to understand how your business operates within its legal and competitive frameworks and how both of these shape its strategic goals. You also need to consider your team members and align their roles with your department’s aims. Finally, you’ll need to communicate your objectives simply and clearly to your colleagues and show them you’re serious about making a meaningful contribution.
To read the next article titled 'Fitting legal into business strategy, plans and budgets' click here.
Please read Paul Barrett's comments below:
The article talks about relationships and the importance of building strong, trusting relationships with key stakeholders across your business cannot be underestimated.
Strong relationships will inevitably increase your awareness of the company strategy and vision and allow you to experience the values. At the same time, they will help to ensure that you are consulted early in any planning process, maximising your ability to influence the outcome, which in turn will allow you to demonstrate how the Legal department adds value. Strong relationships can also provide you with senior advocates for the Legal team.
Also picked up in the article is the idea of a formal survey. This can be a really helpful way to gather feedback from the business on its views of the Legal department. It doesn’t have to be a complex process, a simple questionnaire sent to a range of key stakeholders and covering issues such as business awareness, quality of advice, visibility, relationship management, communication and accessibility will provide a wealth of information to assist you in aligning the Legal team with the business and developing a Legal strategy. The exercise itself will also help to build relationships.