Increasingly, corporate and government law departments are
fully compliant and well managed units within their organizations. Gone
are the days when a law department was little more than a captive law
firms or a small collection of solo, in-house practitioners. General
counsel today are leading comprehensive reviews of their departments,
sometimes followed by an extreme makeover. Much like an executive
medical, this type of review is a process that should be scheduled every
five years.
Every law department should start with an “operating philosophy” —
something that anchors significant changes, ensures alignment with
corporate priorities, and manages the expectations of both internal
clients and lawyers within the department. Consider the following
objectives in the game plan: making clients more self-sufficient for
day-to-day operational support; minimizing the use of lawyers as
generalists; ensuring that lawyers are used to the full potential of
their experience every day of the week; reducing total legal spend by 10
per cent per year; and rigorously applying at least four key
performance indicators to focus effort and gauge progress.
For the most part, law departments provide 80 per cent daily operational
support and only 20 per cent strategic and project support. The demand
for service is relentless and growing. But trying to structure a law
department to respond to all requests that clients put to it is not a
sustainable business model; a law department is not a law firm.
Progressive departments are explicit about who can call legal, for what
reasons, and when calls are recommended. Some go further and provide
details about which documents and preparations are expected from their
client.
Another aspect of managing workflow involves employing turnaround
standards as a way to manage client expectations and to minimize
interruptions. Two business days turnaround is typical for
straightforward work or to provide a detailed estimate for phases of
more complex work.
Practice management initiatives can be customized for each lawyer and
paralegal. Some inside counsel spend 15 per cent or more of their work
time on administrative matters or in meetings that are less than
productive. That is nearly twice as much as should be required from
counsel with no supervisory or management responsibilities. For
administration and professional development activities, 125 hours per
year are usually enough. Turnaround times can be further improved when
lawyers have advanced proficiency with documentation management as well
as with spreadsheet and communication technologies. It takes time to
delegate and correct. Most clients of the law department prefer speed to
perfection. Technology proficiency is no longer optional.
There are four components to a basic “right-sizing” of a law department.
The first one is the most difficult. The majority of law departments
have no juniors — that is to say lawyers with less than five years of
experience. Fewer still have full-time paralegals not serving as legal
assistants 30 per cent of the time. And all too often, inside counsel
personally do 90 per cent of the work on any project they are given.
It becomes an exercise of putting square pegs in round holes to match
the detailed demand forecast with the experience levels and specialties
of the department’s resources. The result is often a collection of
commercial generalists working alone with clients and delegating about
10 per cent of tasks on files that are not challenging three days out of
five.
Part of the solution is to shed routine work, make clients more
self-sufficient with technology, training and answers to FAQs. The
demographics of the department will always be a challenge, especially
for departments with fewer than 10 lawyers. As a strategy, attrition is
too little, too late to achieve alignment of lawyer experience with
complex work. Better to take on complex work and projects than to assign
them to law firms. Merely responding to daily requests for service
erodes the law department’s value proposition.
Performance needs to be driven. Key performance indicators (KPIs)
provide the orthodontics that can make the department look better in two
years. But they have to be carefully selected and then managed. A law
department business plan should contain measures and targets that align
with corporate priorities. Four performance drivers help to do this:
service standards, especially for turnaround times; results, as
evaluated by clients on files of medium or greater complexity; cost
reduction and management of both internal and external counsel; and
innovation for both process and content.
The progressive law department will conduct a zero-based review every
five years. The progressive GC introduces the changes in a proactive
fashion.
Richard Stock, M.A., FCIS, CMC is a partner with Catalyst Consulting. Richard can be contacted at (416) 367-4447 or at [email protected].
