Planning for success - six steps in developing a business plan for legal

The aim of any in-house legal team is to be at the heart of their organisation, supporting the board and management in achieving the organisation’s key goals and objectives while helping to protect its assets and reputation.

Yet, it can be a struggle simply to keep up with the demand for legal services from business colleagues.

And the better the service you provide the more in-demand you’ll be. The truth is that ‘fire-fighting’ can become the norm. And, as we know, this can undermine Legal’s effectiveness and the moral of its lawyers and staff.

 In this article we look at the importance of developing a business plan for Legal that sets out its role and purpose and how it will go about providing legal advice and services that focuses resources on what matters most. Here are six steps to developing a workable business plan for Legal.

A business plan flow chart

A business plan flow chart

Step 1 - Analyse where you are via a legal heat map

Being busy isn’t necessarily the same thing as being effective. That’s true for individuals as well as for teams. So, it’s important to look at what all the activity is for. In particular, ask yourself these questions -

  • Where are the lawyers spending their time?
  • What’s the cost of legal activity – which areas account for the highest legal ‘spend’, internal and external?
  • What are the key legal risks facing the organisation?
  • What future changes in the organisation and beyond will affect those risks?
  • Is current activity aligned to key risks or are there gaps?
  • How will Legal respond to change?

You can’t plan effectively unless you know the current state of play. Tools for analysing activity and cost have long been available but needn’t be sophisticated, expensive or time consuming. The results can be illuminating and informative.

Step 2 – Identify what does the ‘client’ want?

The client in this sense is the organisation’s board and (senior) management. The risk for Legal is that momentum takes over and you find yourself spending all your time trying to keep pace with doing what you’ve always done. Of course, the GC and lawyers need detailed knowledge of their organisation – its governance and decision making structure, operational model(s), legal and regulatory framework(s), financial framework, business targets and goals, key stakeholders, the current and future challenges and risks, and the culture of the organisation. But it’s also important to find out what your ‘clients’ need from you and what their expectations are. What are the challenges and risks that keep them awake at night that it’s your job to help them with?

In getting this information you’ll likely build up a patchwork of needs and expectations, not all of which you may agree with or be able to meet. But it will provide a revealing insight into what matters most to Legal’s key stakeholders. And in speaking to senior managers, including in the different ‘business’ areas, you’ll get an understanding of the business challenges and changes that they’re facing and that you may need to adapt to help with.

How do you go about this? There’s no substitute for having good client/stakeholder relations but you may also find that using tools such as feedback meetings (periodically and/or post project completion) and client surveys are very useful to you here.

Step 3 – gap analysis

You now have a lot of information about what Legal does and of the needs and expectations of others. It may be that Legal’s objectives and resources are perfectly aligned with both the organisation’s business objectives and with Legal’s compliance role. More likely, you’ll find gaps. For example, you may find that too much time is being spent on activities which are less critical and that resources are consequently skewed. Or there may be a skills gap. Whatever the situation it’s important that you decide how to bridge those gaps as it’s not tenable for legal services to be out of sync with the most important areas of business activity and legal risk.

Bridging the gaps may not be quick or straightforward. For example, it may require discussion with a business area about you providing less legal support where it’s appropriate to scale back, perhaps by also providing some training and online support as an alternative model. Or you may need to introduce or beef up service agreements to ensure that systems for referring work to Legal are in place and observed. And of course it will be important that any changes that need to be made to bridge the gaps limit business disruption, as much as possible.

Step 4 – clarify your role

With more information about the needs and expectations of key stakeholders, the GC and the lawyers can clarify their role and purpose. This matters given that Legal’s role isn’t only to do what everyone demands of it and also because its resources are finite and need to be prioritised and focused.

Understanding what stakeholders want from Legal is only part of the story as Legal will itself need to be clear about what its role entails. It is about working smartly to support the organisation’s commercial and other objectives but it’s also about supporting and protecting the interests of the organisation. So, while it will be important to align legal resources and expertise with what matters most, this won’t mean only supporting the areas of highest profile or commercial gain as Legal should play a key role in ensuring that the organisation understands and meets its regulatory and compliance obligations.

This step also requires Legal to be clear about what they need from the board and senior management in order to carry out their role and meet their professional obligations. This is likely to include such matters as:-

  • involvement (usually early) in strategic decision making,
  • access to the board,
  • understanding of the lawyers’ wider obligations and what this means in practice, and
  • adequate resources to carry out the function.

Legal’s purpose should be a live, working document that sets out, clearly and concisely, the lawyers’ role and the values that underpin and inform what the team does.

Step 5 – the operational plan

You now need a working plan that establishes what legal services you’ll be delivering, and how. This needs discussion and agreement with the team’s clients/stakeholders, including in relation to legal budgets. Almost certainly you’ll need to work within existing budgetary restraints, although you’ll be looking for ways to maximise the impact you have. This may lead you, for example, to revisit how you structure the legal team – do you need lawyers to be more integrated in the business areas you support, or is a more centralised model more effective and efficient?

In-house legal teams have had to embrace the need to deliver legal advice in different ways, covering face-to-face meetings, working in business projects, providing remote, online support and in-person and online training. And if you rely on external lawyers to provide part of the legal services required, you’ll look at the ‘what and the how’ of their input as well as, of course, cost.

Building an operational plan also requires the input and buy-in of the legal team. Your plans need to be deliverable and you may want to introduce changes around the way things are done and the skills and expertise needed. If this involves more extensive change, you’ll want a change-management plan to smooth the process and ensure that communication lines are open and clear.

The objective here is to develop a plan that sets out:-

  • Legal’s key objectives for the period,
  • How these support the interests and objectives of key business functions and the organisation generally,
  • What legal support you’ll deliver during the year and how and how the cost will be met and managed, and
  • The overall value that Legal will deliver in meeting these objectives.

Step 6 – feedback and revision

Legal’s strategy needs to include a process or processes for getting feedback and input from clients/stakeholders and from the lawyers themselves. This should include any external law firms you use. A real plus of being in-house is the proximity to your ‘clients’. And many of them will be happy to give you their views on what is being done well and not so well.

For this feedback to be actionable, you need to capture it in a way that identifies the detail of the successes and failings of the service Legal is providing. So, as well as the informal, use more formal processes for getting feedback on the how things might be done better. Tools include questionnaires, surveys, feedback sessions and post-work/project ‘wash-ups’. And it shouldn’t be one-way. It’s important that Legal is clear where other parts of the process are not working, including in relation to the quality or timing of the information upon which the lawyers are being asked to advise.

Legal’s business plan should be reviewed periodically (and annually) and in response to business changes and developments. Getting regular feedback adds relevance to these reviews. The plan is a working document that benefits both Legal and its clients/stakeholders, proving a valuable reminder of Legal’s role and objectives and also provides an ongoing measure of how it is supporting the organisation in meeting its key objectives and protecting its assets and interests. 

A business plan flow chart (PDF 10 KB)