Those clients may be in the same physical location or in several but the model is based on the in-house team forming a core in a single location.
A de-centralised team may take several forms. Here are three examples:
- A central legal core but with some specialist lawyers co-located with particular clients, either in the same location (as the core) or not;
- Where the core team is in one location (e.g. London) but with some lawyers located in different geographical locations to support clients in that office or region;
- No core team but with all lawyers being spread across the organisation in different locations
There are, of course, different possible variations on the theme.
In this article we look at the pros (and a couple of the cons) of having a de-centralised team while focussing on the ways in which the de-centralised team can work as an effective and efficient unit.
Centralised or de-centralised?
Even where all, or the majority, of your key clients are in a single location, there may still be a question about whether the lawyers are located as one team or whether there’s merit in having some lawyers co-located with particular clients and business areas, effectively as their dedicated lawyers. This will depend on the structure and nature of the organisation, but the advantages of co-locating lawyers include:-
- It makes those lawyers more accessible as they are literally ‘on hand’ to deal with issues as they arise.
- It should shorten lines of communication, particularly where those lawyers have the experience and authority to act autonomously, perhaps within agreed boundaries.
- Increased accessibility should enable the lawyers to become involved early in business issues and enhance collaboration, innovation and problem-solving.
- It helps overcome any perception of the legal team being too remote or out of touch with problems ‘on the ground’ and helps the lawyers demonstrate their value.
- It helps the lawyers build specialist knowledge in relation to that business area.
- It should allow more scope for a transfer of legal knowledge thereby increasing self-help and reducing trivial legal enquiries.
- It is likely to be popular with clients and lawyers alike.
Of the disadvantages, two of the clearest are that co-location can increase the pressure on lawyers to facilitate the needs of their ‘local’ clients at the expense of exercising a wider perspective; and that the lawyers become ‘legal facilitators’ at the expense of protecting the wider legal interests of the organisation.
Organisations based in different locations
Where the organisation is spread across a number of locations, including internationally, it’s very likely that in-house lawyers will need to be sited in more than one location to provide effective legal services. The GC will clearly want to evaluate carefully where lawyers are placed given that recruitment budgets will be tight and the GC will want to place lawyers where they can have the most impact. So, for example, rather than have lawyers in four European centres, is it better to place them all in a European hub servicing the different locations? Of course these decisions will be heavily influenced by the strategic needs of the organisation as a whole rather than simply being a matter of optimising legal resources.
How to run a de-centralised team model
With lawyers in different locations, what are some of the steps that the GC and other senior lawyers can take to maximise their impact? Here are some suggestions.
1. Responsibilities and reporting lines
One risk with any de-centralised model is that dual responsibilities are not managed, leading to confusion and conflict. Where lawyers are working closely with local management, with whom they strongly identify, there may be a tendency for those local affiliations and local work to always take precedence. But this will need to be balanced with the overall needs of the organisation and there may be occasions when a local initiative needs to be pushed back. This requires lawyers (particularly those in management roles) to be clear about their role, purpose and responsibilities as lawyers and to be robust in pushing back against local management, where necessary.
In any matrix management structure the relationship between local legal management (a regional GC, say) and the group GC must be clear, even where there is dotted line reporting to a local board or CEO.
2. Objectives and systems
Local legal teams will need, and expect, a degree of autonomy to react quickly and flexibly to their client’s needs. But this autonomy should sit within an overall framework where the overall objectives of the legal division have been clarified and mapped so that any conflict between local and group interests is picked up and dealt with. It will help also if the lawyers are working on common systems to enhance collaboration and the sharing of legal and management information, as well as ensuring that there are common standards for matters relating to quality and workflow management.
3. Mapping legal risks
It’s always a good idea to have a legal risk heat map in order to recognise where legal risks do, and may, arise. This will be important where the in-house lawyers are dotted around the organisation, particularly where jurisdictional differences need to be factored in. A deep understanding of what is happening locally is important but that is not the same as being clear about where the risks lie for the organisation as a whole, which will be important when determining how to manage response and impact.
With lawyers in different locations, it’s important for senior legal management to take time to ensure that they are able to regularly get together and also that they visit all parts of the legal organisation. This helps build understanding of local jurisdictions, issues and challenges and allows the local lawyers to know that they’re part of an overall team and that their contribution is valuable and appreciated. Being there in person makes the point far better than emails, newsletters or virtual meetings.
5. Getting together
On a similar theme, it may not be easy to get various decentralised teams together but there’s nothing like a shared event to help create a sense of belonging and shared purpose. It may not be that regular but having, say, a bi-annual conference or retreat could be an important tool in developing a more cohesive team culture.
6. Sharing knowledge
Legal teams look for ways to share their collective knowledge across the legal team and with their clients. But this knowledge and ways of doing things may be valuable beyond the local context, so it will be important to allow for wider sharing and discussion in a virtual format. Common systems will help facilitate this.
7. Mining the data
One of the risks of having lawyers in several locations is that those centres become silos, responding to the needs of local management but without a wider perspective. Working across different sites emphasises the importance of having good data and management information about where the demand for legal services arises and is strongest and what are the trends and emerging themes that may impact where legal resources are focussed - both in terms of lawyers on the ground and the balance of work generally.
8. Training and development
Having a group wide training programme helps develop common standards and allows for more collaborative working and the movement of lawyers across different parts of the organisation. For multi-jurisdictional teams, there is also the opportunity to cross-train on local law and regulation.
9. External law firms and providers
There is always the risk that legal procurement can become too splintered and inefficient as local priorities trump wider considerations. Consequently, it helps to adopt common procurement principles and standards including in relation to service, quality and price. As well as ensuring high standards, this will also help in tracking and interrogating legal spend across different offices and jurisdictions.
10. Careers and culture
One of the advantages of a geographically diverse organisation is that it provides opportunities beyond one central team. This opens up the possibility of not only working in different areas of the organisation but also of working in different locations and cultures. This should provide increased career opportunities for lawyers to develop their skills and career prospects within the organisation. Culture is also about having a common legal culture that stands for certain standards and principles across boundaries and helps build a strong team identity.
How to structure the legal team is a key decision for any GC and senior legal managers. Greater use of technology tools to support and enhance in-house practice may increase the push toward some de-centralisation of the legal team as the benefits of working ever more closely with clients are taken up by management and lawyers alike. There are risks, though, in that in-house lawyers are not only there to facilitate the ‘deal’ but to exercise wider legal responsibilities to the organisation as a whole. But the structure of some organisations makes it largely inevitable that its lawyers will be working in a de-centralised model of one kind or another. Here the emphasis will be on the lawyers having a clear sense of their role and purpose and in adopting standards and systems that ensure that they support the organisation in a consistent and collaborative fashion.
Top Ten Tips for Running an Efficient International Legal Department – ACC December 7 2010