20 Per Cent More Capacity?
Author: Richard Stock - Lexpert (October 2014 at p. 90)
Wouldn't we all love to have 20 per cent more time to do the work that really matters? There is a way
THERE ARE THREE steps general counsel can take to find out how best to generate 20 per cent more capacity from existing resources. Doing so, however, is like opening a Pandora’s Box, because such an initiative requires fundamental changes in order to allocate more resources to strategic matters, save on external legal spend by in-sourcing complex work referred to law firms, and provide a robust professional challenge for members of the legal department.
The first step is to have each lawyer and paralegal in the legal department complete a work distribution spreadsheet showing how time is allocated by business unit and type of law. The spreadsheet must also include a section for practice management and administrative time. The general counsel can then see how each lawyer's time - say 50 hours per week or 2,300 hours per year - is deployed and whether this makes sense given projected demand. There are often a few surprises when looking at usage patterns for legal resources.
The second step is to measure the extent to which the legal department is "dumbing down." Members of the department are asked to estimate the number of matters they handle in three categories: (1) those which are completed in less than 5 hours; (2) those that require between six and 25 hours; and (3) those requiring more than 25 hours to complete. They are also asked to estimate the amount of time per year for each of the three categories. Once there is a clear definition of a "matter," it is a straightforward undertaking for lawyers to do this without timekeeping systems by taking a careful look at email traffic for one month.
The findings are usually very different than what general counsel expect or hope to see. Typically, legal departments deploy up to 70 per cent of their resources on routine work requiring less than 25 hours. For the most part, this tends to include operational support for business units rather than for strategic projects and initiatives called for by the company's business plan. There is an endless appetite from business units for routine, last-minute advice and document review with legal departments only too happy to oblige. And so we too often find senior corporate counsel - lawyers who might be partners in a law firm setting - doing work that a third-year lawyer can handle capably.
The third step is to trim the number of individuals inside the company who can call on the legal department. Up to 35 per cent of “users” require less than 30 minutes of support per week. While this is not a large proportion of the department’s time, it is often concentrated with a few lawyers managing an electronic turnstile practice. Business units appreciate the support either because procedure obliges them to run something by legal or because they are out of time and decide to refer the matter to legal at the last minute. Explicit protocols with business units will clarify who can call legal and what supporting documents are needed. Legal departments rarely have written protocols in place for all of this. By providing business units with standard forms and procedures and some basic training, a legal department can reduce its list of “authorized clients” by 25 to 30 per cent.
There is no doubt that acting on the findings from this three-step program to generate capacity will be disruptive. Moving resources from one business unit to another, reducing the proportion of routine work by 20 per cent in favour of more complex work, and trimming the number of legal department users affects internal relationships. Business units are then required to be more self-sufficient as long as legal and business risks warrant it. Inside counsel are learning to say no to certain requests and to commit to delivery dates and standards for the remainder.
Is the pain worth the gain for the legal department? Compared to five years ago, there is much greater demand for the legal department to demonstrate measurable value. This goes beyond proving that inside counsel are half the price of external counsel. It means that the GC has to clear the underbrush that prevents the legal department from spending enough time on strategic business priorities. The department must improve turnaround times, reduce external spend by in-sourcing work, and generate meaningful professional challenges for the members of the legal department.
In recent years, many legal departments have begun to leverage their resources to greater effect. General counsel can begin by generating 20 per cent more capacity from existing resources.