Here we look at 9 key things to consider.
1. What are the legal needs of the organisation?
Before you can organise the legal service, you need to know who your key clients are and what they need from you. This will depend on what the organisation’s key activities are and what legal risks these give rise to. For example, there may be a significant demand for contract terms and advice; advice on regulatory compliance; protecting intellectual property rights; human resources advice; and dispute resolution, among other issues.
Having mapped the legal activity and identified the legal risks you need to understand the tolerance for risk in each case. Your clients may need your help and advice in understanding the risk and its impact, so that they can calibrate how much risk is acceptable and, consequently, how it is managed. For example, there may be very low tolerance of any risks relating to regulatory compliance whereas some contract risks may be more acceptable where this is commensurate with commercial advantage.
2. What resources are under your control?
Do you control the provision of all legal services to the organisation (including by external lawyers) or do some clients instruct their own lawyers directly? If your brief is, in part, to manage and control legal costs it will be important to get control of this process. Not only does a decentralised process often add costs it also means that there is no legal governance to control what questions are being asked (are they the right ones?) nor whether the legal advice received is good or is acted upon. Of course, there may be situations where local instructions are important, say where the organisation is operating in different jurisdictions. But the issue here will be whether there is control by Legal over the process?
Control will usually be allied to budget as in who controls the legal budget? Whatever the structure of the organisation and the legal function, the fact is that it will be difficult for the GC to influence legal cost, governance and quality unless they can control whether work is retained in-house or outsourced and, where outsourced, to whom, at what cost and on what other terms.
One practical step would be to establish a legal user group for all, or part, of the organisation to get a handle on what use is being made of the legal team (coupled with workflow data), discuss service issues and get support for budget increases.
3. What is your legal strategy?
Having identified the legal needs of the organisation or the relevant business division, what is my strategy for delivering services within the relevant budget? This is likely to involve a mix of delivery platforms, primarily your own lawyers and external lawyers. Additionally, you’ll be looking at training and self-help options like intranet Q&As, precedents and checklists to increase legal awareness and reduce the need for bespoke legal advice on routine or repeat issues. You may also have a strategy relating to what work you retain in-house and what you outsource – for example, you retain all core work and only outsource where certain criteria are met such as specialist advice and volume of work.
More broadly, legal strategy is about where you will focus your resources so that you are dealing with those legal issues that need to be handled and managed to enable the organisation to carry out its business lawfully and effectively – as opposed to handling simply what comes through the ‘door’ on an ad hoc basis. So, your strategy will also need to encompass recruitment, training and development to ensure that you have the right mix of skills and expertise in your in-house team.
It’s also relevant to strategy to decide on the level service to be offered – for example, ‘fit for purpose v gold plating’.
4. What is your plan for delivering the service?
Of course, the best laid plans can be disrupted but the point here is that you are taking time to plan the legal service, usually for the year ahead. This planning will naturally fit with the budget setting and business planning cycle in the organisation as you liaise with clients to understand their legal needs for the next period. This will then inform discussions about budgets, resources and priorities. The unexpected will always arise but you are looking to build in contingency planning so that, when the unexpected arises, it’s clear who’s responsible for what and where the money will come from to pay for it.
5. Managing legal resources
This covers the practicalities of how you organise the legal function, what external resources you require and what skills and expertise you need. The structure of the function will depend on many factors relating to the organisation itself – where it is located, its markets, what legal jurisdictions it operates in and its culture, among others. Thus, you may have a combination of centralised, de-centralised and multi-jurisdictional teams, depending on these factors. They, in turn, may have a centralised or local arrangements with external lawyers, all of which need managing to ensure consistency, where needed.
Skills and expertise extend to your external counsel as well as the in-house team. Think also about development and succession as senior in-house roles are limited and building an in-house career requires people to think about lateral moves and moves to new organisations. Increasingly, GCs are also looking at what specialist non-lawyer roles they need and can pitch for covering areas such as legal operations.
To be influential you need to do certain things well, for example: -
- Develop a network of key relationships in the organisation, and often outside it as well. This will clearly include line managers, senior and general management, probably the board, and other key experts relevant to your work.
- Competence. You need credibility and that starts with competence. The more professional the service you provide the more likely others will be persuaded by you.
- Knowledge of the organisation. Your understanding of the wider business picture will show others that your legal advice is given in context and is practical.
- Speak the language. Communicating in a way that demonstrates that you understand the challenges and problems that your clients are seeking to resolve.
- Leadership. You don’t have to be the GC to be a leader as it’s about being recognised as someone with integrity, with well-developed emotional intelligence and who advocates and demonstrates high standards.
Influence also requires you to be ‘in the room’. It’s therefore also about being in meetings, projects and sign-off loops where you can influence and persuade more effectively than if you’re outside looking in.
To know whether you’re providing an effective service and improve it, you need feedback. This will often be given informally by colleagues and can be very useful. But also think about formal mechanisms, such as post work completion, where you ask for feedback on what went well, what didn’t and where improvements can be made. Use this targeted feedback wisely to avoid it becoming a routine exercise in non-committal replies. Having received constructive feedback, of whatever kind, respond to it and act on it, as appropriate, as this helps build trust.
8. Demonstrating value and impact
This is about deciding what to measure and report. You may be mandated to report on certain activities, say in relation to disputes and risk management. Otherwise, there is opportunity to demonstrate value and the impact of the team by highlighting and reporting on certain metrics. What you choose may be influenced by nature of the work, your strategy goals and client expectations. Examples, include: -
- Cost effectiveness - – comparing with external spend; value of external providers; dispute resolution savings;
- Service efficiency – promptness; improved business cycle times;
- Risk and compliance – contract terms and cycles; IP protection; compliance training and targets;
- Team development – training targets; new roles and responsibilities; churn rates;
- Legal awareness – training and self-help tools and initiatives; time and cost savings resulting;
- Customer satisfaction – initiatives and response; improvement actions.
9. Future proofing
Legal teams are often uniquely placed to spot issues and trends across the organisation. They are then able to make connections and highlight problems before they escalate. To do this well, you need good internal relationships and a means of picking up emerging themes and reporting to those who need to know. Workflow systems and meetings can be helpful here. You also need good external antennae via your relationships and law firm contacts. The aim is to use your intelligence to help plan for developing and future legal risks that may impact the organisation’s operations. It’s also about planning for the unexpected or unforeseen, such as in relation to litigation and crisis management. The legal team can play a key role in formulating and testing plans that help manage and mitigate disruption.