The Director of Legal Operations
Author: Richard Stock - Lexpert, July-August 2017 at pg 66
Why should companies hire their own legal executives? For the significant return they'll receive on investment
OVER THE PAST five years I have had the opportunity to work with dozens of corporate and government law departments in Canada and abroad. Most have at least four features in common.
First, the leadership and lawyers of the department must comply with a broad range of financial, human resource and technological requirements identical to those affecting all other departments in the organization.
Second, as inside counsel become more closely aligned and sometimes embedded with business units, the demand for their advice and legal services increases. The average work week gets longer, with much legal work getting done after 6 p.m. There is never enough time to meet real deadlines. It is the new normal, with no relief on the horizon.
The third feature is pressure to manage relationships with external counsel more effectively and more efficiently. Very few law departments have the experience and the appetite to rely on progressive practices to manage the “supply chain” with law firms.
The fourth feature is a performance imperative. Law departments must have business plans and objectives with measurable targets. Some of these are financial and readily quantifiable, but others are strategic or developmental and can be difficult to frame. Key performance indicators are here to stay, and law departments must add measurable value.
Part of the solution is to bring management expertise to law department operations. In most cases, this means introducing a new management position in the form of a Director of Legal Operations. The job title may vary, but most financial institutions and large municipalities such as Calgary, Edmonton and Ottawa have had such positions in place for more than 15 years. I recently spoke to incumbents and general counsel at Air Canada, Bell Canada, CN, SNC-Lavalin and the Regional Municipality of York about the current state of law department management and the prospects for the future.
Scott Morgan has been Air Canada’s Director of Legal Operations for over two years, bringing with him 20 years of experience in legal leadership positions with two Montréal-based law firms. He supports the general counsel on efficiency projects, tracking departmental objectives, managing professional development programs, the introduction of new technology, and concluding fee arrangements with law firms. Scott anticipates that law departments will be capitalizing much more on emerging technologies to improve service delivery within two years.
There are good resources for the law department management community: the Corporate Legal Operations Consortium, the Association of Corporate Counsel, and the Association of Legal Administrators.
Joy Hutton is Regional Solicitor for the Regional Municipality of York. The department of 26 lawyers and 26 staff has a full-time Manager of Business Operations and Financial Planning. The position has evolved since 2005 from a purely administrative one to include strategic planning for the department and oversight of retainer agreements with external counsel. Julie Grellette brings business and budget planning experience to the role. Planning resource needs as the region grows and securing legal and technical resources are central to the job. The primary components of the job are planning and performance measures, arrangements with external counsel, financial planning, and technology in support of the Region’s court system.
Bell Canada’s Miguel Baz divides his time between legal operations and the role of Assistant Corporate Secretary. His long-standing responsibilities for relationships with external counsel were formalized in 2013. Since then, the emphasis has been placed on harmonizing arrangements and controls for legal fees. Baz predicts that technology will continue to transform legal service delivery for in-house and external counsel alike. However, technology literacy will need to improve for all counsel to keep pace.
CN’s Jonathan Leung is a Financial Analyst in the law department and facilitates the flow of information between the law department and the finance/accounting department. Budget and performance targets are tracked. Leung has invested considerable time over the past 18 months in working out the operational details of reducing the number the number of primary law firms to two.
SNC-Lavalin added a Director of Legal Operations in March 2017. This multinational construction-engineering firm is active in more than 50 countries. The company once retained dozens of law firms and manages a 70–person legal team across 15 countries. The new Director of Legal Operations, Jean-François Denis, has been tasked with helping to transform the legal department into a new “centre of excellence.” His responsibilities include legal support systems and technologies, policies and procedures, training, talent retention, and measuring performance. As was the case with CN, Denis is responsible for managing SNC-Lavalin's reduction of primary law firms to two. He believes that business and legal technologies must drive change in how firms are retained and service delivered across 24 time zones. Innovation, management information and focus are the watch words.
General counsel who are leading departments of 10 or more lawyers should consider the cost-effectiveness of hiring a full-time director of legal operations. The return on investment is significant.