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  Plan to Plan

Author: Richard Stock - Lexpert (February 2013 at p. 66)

I AM QUITE sure that 95 per cent of companies and government agencies develop plans and priorities each year. Most have statements of goals and strategies covering three to five years. It follows that these organizations track progress and performance against their plans.

I have read hundreds of corporate, strategic and business plans over the years. In many cases, their quality is very good. My interviews with the heads of business units suggest that business plans are an effective management tool at both the corporate and business-unit levels. So why do legal departments fare poorly when it comes to applying the same methodologies and management practices to their own planning? My firm recently surveyed more than 50 legal departments in four provinces on this issue. Here is what we found.

When asked whether their legal departments produce a written business plan each year, 56 per cent said they had no written plan and 40 per cent said they did (4 per cent did not know).

The statistics shed no light on whether legal departments do good work or whether they are appreciated by those who use their services. But they speak volumes about whether the department has a significant strategic impact in the organization each year. Why? Because legal departments that fail to plan are reactive, and can rarely make the time to change their focus.

The second question asked whether legal departments had a formal process for obtaining business-unit input in preparing a plan for legal-services delivery, or in anticipating their requirements. Nearly two-thirds, 64 per cent, sought no formal input, while only 19 per cent reported that they did rely on some formal process for getting input. Another 17 per cent said they did not know whether one was in place because they were not responsible for the management of the legal department.

I know that chief legal officers and general counsel are capable of preparing formal plans. I know they speak with business units every day — and yet they rarely learn more about demand for legal services. This relationship with business units closely resembles a law firm model that is professional and able to react capably when called upon. But this does not let a legal department achieve its potential.

“Is your legal department able to forecast the number and type of matters each year?” The answer to this third question is not surprising. We wanted to see if the informal approach to planning produced the same results as that achieved with a formal business plan. Some 76 per cent were unable to forecast demand at this level of detail, while only 20 per cent were. Four per cent did not know. Forecasting demand by type, volume, number of matters and complexity level does not require a matter-management system or timekeeping.

I have also tested the capacity of legal departments to estimate demand for services. Discussions with 10 different corporate and public-sector legal departments in 2012 revealed a great deal. Lawyers were asked to allocate their time by business unit and by legal specialty so that it totaled 100 per cent for the year. It took 15 to 30 minutes for each lawyer to complete the survey, confirming that they know their practice well enough.

I then requested an estimate of the number of matters/files handled that fell into one of three ranges: less than five hours; six to 25 hours; and more than 25 hours. The lawyer estimated what proportion of the year was represented by each of the three groupings. The resulting “family picture” of the legal department provided the general counsel with a baseline from which they could identify anomalies and adjust usage patterns. It was a short next step to discuss the findings and demand for legal services with business units to then fine-tune usage patterns, as well as to change practice patterns for lawyers and staff of the legal department.

The final question asked whether respondents believed their legal department should be more structured when planning and managing the deployment of resources. Seventy-nine per cent said they should be more structured, 16 per cent said no (perhaps because their plans are sufficiently structured), and 5 per cent did not know.

I believe that the results of this survey are likely to be the same one year from now, if legal departments wait for the company to require them to draft formal plans. But the distribution of answers will be dramatically different in a year if the general counsel decides that a more formal planning process and focused business priorities will be the order of the day for 2013. The precedents and tools are available. Setting a deadline and investing 25 hours will generate a game plan for better results.

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