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  To Plan, or To Improvise

Author: Richard Stock - Lexpert (January 2013 at pg 74)

FEW IN-HOUSE counsel have a detailed and accurate understanding of their legal practices. I interview 250 lawyers each year about their work, how they intend to practise in the next 24 months, and about the business units they support. I am told who represents their main 10 to 15 individual sources of work, and I am given examples of the matters they handle.

This information is enough for me to conclude that the typical workweek for inhouse counsel ranges from 45 to 55 hours, and to observe that few of the lawyers have a backlog of more than three days.

But what tends to be missing are the details. How many matters are there by type, by level of complexity and by "client"? Is the demand pattern expected to change over the next year? What percentage of the practice could be delegated to an experienced legal assistant or to a paralegal, or even to a younger lawyer? How many matters are referred to external counsel? Of what type? And what are the conditions that warrant the referral? Could more of the complex work be in-sourced from law firms?

The general counsel should have the answers to all of these questions for each lawyer in the department. How else is it possible to gauge whether the members of the legal department are "punching below their weight" three days out of five? Or how to generate 20-per-cent capacity in the department with different work intake and allocation protocols?

Over time, department demographics inevitably result in greater misalignment between the experience level of lawyers and the type and complexity of work they are assigned. The best professional service firms, and this includes some law firms, make a point of challenging their associates and junior partners with more complex work and with greater client responsibility early enough to advance career development. Perhaps this is a legacy of the “up or out” system of advancement and of the law firm business model. Ambition and economics are basic and useful performance drivers, even in the legal department. Getting and maintaining this type of basic data about practice profiles and workflow dynamics is step one.

The second step is to set targets for each lawyer that are tied directly to the annual objectives of the legal department. Many lawyers will have performance objectives in place as part of an annual performance evaluation and development plan. But our analysis reveals that individual objectives are seldom correlated with the department’s annual objectives.

The company has business goals and annual performance targets. The lawyers have objectives. Yet nine out of 10 legal departments have no written performance objectives or targets for the department, and this makes it hard to get alignment from lawyer to department to company.

The demand for legal services from corporate legal departments is increasing every year — and so is the sensitivity of primary users to costs and performance. Many legal departments accept that they cannot meet company needs as they currently operate. In my experience, legal department leadership is better when it meets user demands for business solutions, rationalizes cost structures, responds as quickly as possible to corporate changes, deals with managerial weakness, competes with the offerings of law firms, and manages workloads and workflows in the legal department.

Trade literature suggests a five-part recipe for best-in-class legal departments, arguing that they must excel on each dimension. They must have an adaptable strategic purpose, effective leadership and management, powerful client relationships, motivational people processes, and an aligned internal environment with the right resources for the legal department.

A strategic plan for the legal department must be relevant to the corporate plan; it must contain measureable initiatives; and it must ensure that some of these initiatives have high impact. Good legal department plans also include a defined approach to talent management (especially relating to the department), to knowledge transfer (both from law firms to the department and from the department to business units) and to a strong contribution to the bottom line. The general counsel must focus the legal department if it is to make a strategic contribution to the organization.

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