People are the most important and valuable resource to an in-house legal function.
That’s why it’s vital to structure your team to ensure you provide the right expertise across your organisation and, at the same time, give individuals opportunities to develop and progress in their careers.
Putting people first in your legal team
Because no two organisations are the same, no two legal departments are, either. The best in-house legal teams are those structured around the objectives and culture of their organisations and the legal frameworks that governs their sector.
So, a good first step in building your team is to define its purpose in strategic terms. What direction is the organisation pulling in and how can legal help?
Next, ask yourself if the team, as currently structured, is equipped to play the role you’ve identified.
Create a heat map of the legal and regulatory risks the organisation faces now and over the 3-5 years ahead (or longer) that fall within your business' current business planning and strategy horizons and assess how effectively your team can minimise or mitigate those risks. Another exercise is to ask yourself how the organisation would manage its risk profile if the legal team didn’t exist. Could others in the organisation or external counsel do an effective job? Remember that lawyers, even internal ones, are expensive and so are unlikely to be the most efficient way to meet a reoccurring or repeat need. When repeated actions follow the "rule of 3 - same thing, same way, for the same person for the third time", it suggests that that a process is emerging and that "safe empowerment" to that person or to a tool might be a good idea.
The answers to these questions will help you decide whether you need to expand, downsize or reshape your legal department.
Designing and shaping the legal function
Once you understand the purpose of your legal team and the value it adds in the organisation, design a team structure where individual roles optimise overall performance.
Most legal teams are based on a family tree with direct reports (DRs) accountable to a manager. Some organisations prescribe a ratio of DRs to managers to prevent them becoming top heavy. A ratio or "span" of five or more DRs per manager is typical across business generally. However where a department includes any smaller, highly specialised functions or there is a high rate of change, technical functional discussion, learning or people issues within the team, it means that more management time per direct report is needed and a wider "span" is not viable. This is why legal teams often operate on a span of 4-6 per layer and rarely operate successfully with spans much above 8 in the senior levels of the team.
Good practice also suggests controlling the number of "layers" or grades in the team for manageability- typically to 3-5 levels and rarely beyond 6. For example if you have 6 people per direct report and 6 levels of direct reports you could still have a team of 46,656 so this good practice does not really restrict team size!
If you manage a large legal department, consider a structure where teams of lawyers support specific business units ("business partnering"). This allows the lawyers to get a deep understanding of their internal clients and provide the best possible legal service.
Look too for opportunities for dotted line management responsibility. For example, you could give a senior manager of a business unit shared responsibility over a lawyer assigned to it. The lawyer will feel part of the business unit, yet responsibility for their performance and development will remain within your remit.
Even smaller legal teams, or those with legal topic subject matter experts, will need to offer organisation-wide support. Again, aim to tailor this to the business units, even if it can’t be wholly dedicated. Remember, your role as a leader is to get the right legal support to the right people at the right time. An important aim in this support is to be able to meet the mantra:
"One team, one consistent answer, correctly based on current law, consistent with company policies and values, expressed to the right people in the business in language that they can understand, see the reason, for and accept and which they are able to and will act upon in the way that you intend"
You’ll also need to analyse roles at an individual level. Get to know what everyone does - you may learn about all sorts of things going on at the coalface that you weren’t aware of. List the tasks your team members are performing and ensure their job descriptions are still relevant. Check they are still doing what the business really needs in the best way rather than just habit formed tasks or things that suit them.
Assess the costs of your team in terms of salaries, travel and external counsel and ask yourself if every lawyer is efficient and effective at using their skills and experience to add value and justify their cost. The more expensive the lawyer, the more complex or higher profile work they should be doing.
Each lawyer, as an ongoing part of their development plan and their performance assessment, should be commoditising and delegating their work as it becomes routinised down to more junior people or "safely empowering" tools or clients with that work in order to have the capacity be able to take on new and more complex work.
Armed now with your information on roles and costs, compare what you have with what you need. In other words, conduct a "gap (needs to be done but is not being), NAP (it is being done but is Not Adequately Performed) and Overlap (more people are doing this than should be and/or they are doing it inconsistently)" analysis.
Map your team into a family tree. Experiment with structures and think creatively, particularly if you have a skills shortage. The chances are you’ll need to present a robust case for additional resource, so explore every option before requesting approval to recruit.
Effective ways to maximise limited resource include:
- Freeing up your team by getting other parts of the business to perform routine, non-specialist tasks. This could simply mean clarifying ownership or engaging legal resource only at a leadership level;
- Investing in legal training to "safely empower" business units to self-manage work with reduced involvement of your legal team;
- Engaging with flexible external counsel or law firm secondees to meet temporary shortages caused by major bids or projects; and
- Seeking opportunities for others in the business to join your team. This could be on an internal secondment basis or as a permanent move for career development, saving recruitment time and costs.
Making your legal structure last longer
An enduring legal function must have an eye on the future as well as the present. Change is inevitable in most businesses, so a function that will attract and retain the best talent will thrive in the long as well as the medium term.
The foundation of this is the skills of your lawyers. Develop these continually to meet the current and future needs of your organisation. Aim to have all-round generalist skills as well as the expertise to meet your organisation’s specific legal or regulatory obligations. A good commercial lawyer is better placed in a dynamic and changing business than a more specialist lawyer. Having good all-rounders also makes it easier to promote internally or create development opportunities across the organisation. This in turn keeps people motivated and focussed on a career path. And crucially, a team structure with high quality generalist skills is agile and well-placed to serve a dynamic organisation.
Build soft training, such as emotional intelligence skills, into your personal development plans. Personality testing, which can be fun, will also help team members understand their dominant traits and ways of working. For you as a team leader, meanwhile, it can inform your hiring decisions and help you optimise working styles throughout your department.
Legal team structures are generally pretty flat. The best long term options for individual lawyers, for their teams and the businesses may often lie in those individuals working hard in the team to deliver team needs and personal development goals before moving on to a new role in the team, in the wider business or in another business. Ideally this happens in a planned way with a mutually agreed approach where an individual leaves on good terms, when then they have exhausted the value that they can get from the from the role, and the business has exhausted the value that it can get from the individual.
Having a "3 year plan" and then mutually deciding whether it make senses to "re-contract for another period" type of discussion at hiring time and as part of people development and succession planning is something that team managers should actively consider.
Seven tips for leading a legal team
With your legal function in place, follow these seven tips for successful leadership:
- Set the tone by basing your team’s culture on core values. Review team and individual performance against these values;
- Spend quality time with the team and individual members. The trust and leadership you provide will be one of the biggest reasons for their loyalty;
- Give each individual a personal development plan and a career path to aspire to;
- Keep the team well informed about the organisation by passing on relevant and useful information from the board and senior management;
- Embrace flexible working;
- Celebrate and share successes. Your team's wins are not just about playing a role in big projects and deals. Show also where your astute negotiation has saved the organisation money or where you’ve trained business units to avoid pitfalls. Perhaps you have used wider business acumen to help the business as a whole on a non legal issue and raised the credibility of the legal team in the process; and
- Use technology to continually improve efficiency and communication, especially if your team is spread across multiple locations or jurisdictions.
Finally, aim to make your team respected across the organisation for the quality of its service and the depth of its relationships. Encourage collaboration with other teams, both formally and informally.
Like any structure with longevity, an organisation’s in-house legal function needs firm foundations such as a relevant structure and quality people. Create the structure by getting to know the organisation’s strategy, risks and risk appetite. From here, consider the skills you have and identify any gaps in your current setup. If you have a shortage, consider all options such as broadening your team's skills, hiring secondees or training business units to self-manage routine legal work. Over the long term, focus on skills, training and development so your lawyers become skilled all-rounders with a deep understanding of the organisation – and enhanced career prospects.
The following commentary was provided by Anthony Inglese.
This article contains much solid advice, right from the excellent second paragraph which makes the "people development case" for properly structuring your legal team. A team which does no more than structure itself around the performance of tasks (rather than also the development of people) jeopardises its future.
I couldn't agree more with the article's focus on developing the skills of lawyers and not just their knowledge. The key sentence in the article is "And crucially, a team structure with high quality generalist skill is agile and well-placed to serve a dynamic organisation." Every organisation goes through change, some of it radical. The in-house legal team needs to look for the opportunities offered by change and be agile in meeting them.
Towards the bottom of the first page there is guidance on spans and layers. Having led legal departments of some hundreds, which had to take the question of structure seriously, I would counsel against being overly dogmatic because there can be so many variables in terms of job weights, seniority of members, team sizes etc. but in the biggest legal departments I have led there were not more than five layers of lawyers (including mine) and in the smaller ones only three. This article gives a rough maximum number for a span, which I wouldn’t disagree with, although I have led departments with structures accommodating spans slightly above those numbers. At the other end of the spectrum my strong experience has been that there must also be a minimum number of at least three for a span to be viable. To have someone managing one or even two people is not practical.
Talk of spans and layers is only part of the issue. A related question is "Where does the work get done?" Is the work pushed down to the lowest sensible level (with supervision from above) or sucked up to the highest level? You can probably tell from my language that I prefer the former as more empowering and developmental. It is only after the issue is resolved that one can address the issue of spans and layers.
A point which could be developed further is that the article speaks of "people" but really goes on to focus only on lawyers. Many legal teams contain people who are not lawyers – it's irritating to use "them and us" language and to call them "non lawyers" – and it is important that they also benefit from people development policies.
To read Anthony's viewpoint on this article click here