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  Shedding Low-Level Work

Author: Richard Stock - Lexpert October 2011, Vol. 13, No. 1

In the July issue of Inside Counsel, the magazine carried extensive coverage on the in-sourcing phenomenon. According to the report, pressure to keep external fees in check, which became pronounced in 2008, has not abated. At the same time, internal demand for legal services continues to grow. Litigation, regulatory matters, labour and employment, and commercial activity represent somewhat more volume each year, not to mention the transfer of work from hard-pressed business units.

Hiring a new lawyer would be the obvious solution to this capacity issue, but it’s usually not that simple. While large legal departments are often able to add counsel, smaller legal departments are not so lucky. Even when it can be demonstrated that the work can be done for half the cost of external counsel, smaller legal departments – and these represent the majority – struggle to win the business case to add a lawyer. The legal department is often part of the corporate centre and head count restrictions prevail – even if it costs the company more.

To a great extent, the pressure felt by legal departments is a result of business units that are themselves under resource and time constraints. The effect is that business units do not involve the legal department early enough and they come unprepared as consumers of legal services.

At first, it may not be clear where the heightened pressure is coming from. The length of the average work week for in-house counsel, at 45 – 55 hours, has been pretty stable for several years, with the smallest legal departments at the higher end of the scale. Nor is there much of a backlog, with most legal departments reporting two to five days’ worth of work. Surveys also show that deadlines for strategically important work are rarely missed. So where’s all the stress coming from? It’s the operational support work that business units claim lags behind.

There are solutions, though. The scramble and stress that this kind of work presents can be avoided by making workflow more predictable, and to that end, the first step should be to manage the expectations of the business unit. Some legal departments limit the number of individuals from the business unit that can call on the legal department. Intranet sites listing protocols on “when to call your lawyer” make a big difference. So does sitting in on business unit meetings to get a sense of the work on the horizon.

Other legal departments are introducing templates and checklists to permanently return certain work to the user department. They are changing the criteria and financial thresholds for what needs to go to legal. They take the time, often hard to find, to train business units to make decisions that reflect an acceptance of a new level of legal or business risk.

More progressive legal departments will use “process-mapping” to strip unnecessary steps out of recurrent work. Better division of responsibilities, allocation of resources and management of timeframes flush out the waste and produce better workflows. Other legal departments are working with law firms to ensure that both teams are using project-management skills for complex and unique matters – be they regulatory, commercial or litigation.

Legal departments are not getting any younger. Lawyers that have been inside counsel for 10 years or more are looking to sink their teeth into more complex legal work. Yet the regular work still needs to be done. It is not cost-effective for senior members of the department to keep doing the work that a fifth-year lawyer can do capably. Nor does it pay to refer this to a law firm. So, unless a department takes on younger counsel, a large amount of work needs to get managed in a different way. Failing this, the pressure on workflows, workloads and morale invariably escalates.

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