Why change anything in a law department when nothing is wrong? Work is plentiful, most of it is interesting, and the other departments genuinely appreciate the contribution of in-house counsel and have no real complaints. So why change a thing?
Innovation in legal services is not invention. It is about introducing something new for a law department, even if it has been done elsewhere. Or it can be about improving what is being done or the way something is being done.
Over the past five years, I have noticed that more law departments have formal, annual business plans in place than in the early 2000s. Some plans are developed from the bottom up after consulting members of the department. However, not enough of these seem clearly aligned with the company’s corporate business plan and operating priorities. All the boxes are ticked, but it is difficult to see from the plans how the law department expects to leverage its knowledge of the company and its skills to add value in the company. There is lots of activity, but the strategic impact of the plan is indirect at best.
By definition, a key performance indicator (KPI) is designed to focus resources on priorities that make a difference to the company and to employees that rely on the law department. The earliest editions of performance plans for law departments always contained activities to improve service levels and overall satisfaction from other departments. This is pretty much the same basic approach to professional work that one expects from a law firm.
The next generation of business plans for law departments saw the introduction of KPIs tied to corporate targets. These were more sophisticated in that they included contributions to specific corporate projects, becoming more productive in service delivery, controlling the cost of external counsel, and developing the capabilities of senior members of the law department. Every one of these activities has an innovation component built into it. It is embedded and assumed in the initiatives or actions supporting standard KPIs, such as efficiency, cost-reduction, technology and knowledge transfer.
Yet, in recent months I have come to the conclusion that innovation per se should be identified as a stand-alone, separate performance indicator along with the usual “innovative” activity supporting other KPIs. This is not because law departments need a longer list of things to do or to measure. Instead, a KPI for innovation requires that the leadership and members of the law department actually discuss innovation and then invest the resources in initiatives that make a strategic difference to the company.
There are several categories that should be priorities for innovation in a progressive law department. These include shifting more of the law department’s resources from daily operational support of business units to developmental and corporate projects that the company identifies as strategic priorities. In addition, changes are needed to ensure greater self-sufficiency for business units for some legal services through a combination of training, streamlined procedures and systems, templates and a more limited role in contract reviews by the law department. The available capacity of the law department can and should then be increased by 25 per cent.
Three other areas could benefit as targets for innovation. They include abandoning hourly billed legal work in favour of performance-based fees with external counsel; making sure that lawyers and the other members of the law department have challenging work most of the time; and raising the proficiency of the department’s lawyers in key skills such as leadership, business negotiations and project management.
Innovation has several beneficial side effects. It demands creativity; it depends on discipline to execute the initiatives; and it is transformative. Moreover, innovation is interesting — far more interesting than working faster or longer hours, or negotiating greater discounts from law firms.
For the most part, the best innovations for a law department are externally focused. They are dedicated to corporate projects and to the priorities of business units rather than the internal workings of the law department. Success with innovation should answer the question, “What difference do the lawyers make?”
There are now two Canadian awards available for law departments that innovate. Service and adaptability can be replaced by innovative contributions on multiple fronts as the hallmark of law departments determined to add value. May the best innovators win.
Innovation in legal services is not invention. It is about introducing something new for a law department, even if it has been done elsewhere. Or it can be about improving what is being done or the way something is being done.
Over the past five years, I have noticed that more law departments have formal, annual business plans in place than in the early 2000s. Some plans are developed from the bottom up after consulting members of the department. However, not enough of these seem clearly aligned with the company’s corporate business plan and operating priorities. All the boxes are ticked, but it is difficult to see from the plans how the law department expects to leverage its knowledge of the company and its skills to add value in the company. There is lots of activity, but the strategic impact of the plan is indirect at best.
By definition, a key performance indicator (KPI) is designed to focus resources on priorities that make a difference to the company and to employees that rely on the law department. The earliest editions of performance plans for law departments always contained activities to improve service levels and overall satisfaction from other departments. This is pretty much the same basic approach to professional work that one expects from a law firm.
The next generation of business plans for law departments saw the introduction of KPIs tied to corporate targets. These were more sophisticated in that they included contributions to specific corporate projects, becoming more productive in service delivery, controlling the cost of external counsel, and developing the capabilities of senior members of the law department. Every one of these activities has an innovation component built into it. It is embedded and assumed in the initiatives or actions supporting standard KPIs, such as efficiency, cost-reduction, technology and knowledge transfer.
Yet, in recent months I have come to the conclusion that innovation per se should be identified as a stand-alone, separate performance indicator along with the usual “innovative” activity supporting other KPIs. This is not because law departments need a longer list of things to do or to measure. Instead, a KPI for innovation requires that the leadership and members of the law department actually discuss innovation and then invest the resources in initiatives that make a strategic difference to the company.
There are several categories that should be priorities for innovation in a progressive law department. These include shifting more of the law department’s resources from daily operational support of business units to developmental and corporate projects that the company identifies as strategic priorities. In addition, changes are needed to ensure greater self-sufficiency for business units for some legal services through a combination of training, streamlined procedures and systems, templates and a more limited role in contract reviews by the law department. The available capacity of the law department can and should then be increased by 25 per cent.
Three other areas could benefit as targets for innovation. They include abandoning hourly billed legal work in favour of performance-based fees with external counsel; making sure that lawyers and the other members of the law department have challenging work most of the time; and raising the proficiency of the department’s lawyers in key skills such as leadership, business negotiations and project management.
Innovation has several beneficial side effects. It demands creativity; it depends on discipline to execute the initiatives; and it is transformative. Moreover, innovation is interesting — far more interesting than working faster or longer hours, or negotiating greater discounts from law firms.
For the most part, the best innovations for a law department are externally focused. They are dedicated to corporate projects and to the priorities of business units rather than the internal workings of the law department. Success with innovation should answer the question, “What difference do the lawyers make?”
There are now two Canadian awards available for law departments that innovate. Service and adaptability can be replaced by innovative contributions on multiple fronts as the hallmark of law departments determined to add value. May the best innovators win.
