Positioning and Strategy

There are five features in law departments that are considered well managed. These are organizational alignment, the deployment of legal department resources, the management of initiatives and priorities, strategic communications, and a focus on leading practices. All are required to manage beyond the basics.

Five factors which inhibit the execution of strategy are applied to law departments. They are executive leadership that is not mobilized, strategy that is not translated into operational terms, poor alignment with business units, strategy execution that is relegated to being someone else’s job, and poor direction and communication on strategic goals.

Flexible, independent, cost-ineffective operating practices of law departments for selecting law firms are less tenable than they were 10 years ago. Law departments must apply robust criteria when selecting law firms and begin by stabilizing and reducing the number of firms. An estimate of the 3-year demand for each specialty followed by multi-year partnering agreements with primary firms provides a good base. External counsel can be sole-sourced or selected after a competitive process. As always, service, results and pricing must be in balance.

Municipal mergers and population growth have generated more legal work for law firms. They have also created 5 challenges for municipal law departments: broad-based poorly defined roles and responsibilities, unclear accountability to political and administrative masters, a growing demand for commercial skill sets, failure to leverage long-term partnering arrangements with fewer law firms, and failure to use key performance indicators which matter.

Shifting the perception and the focus of a law department can be accelerated with a formal positioning statement or “manifesto” that is endorsed by corporate leadership. The components include a brief mission statement for the law department, a strategic focus aligned with the corporate plan, clear operating principles, and a set of medium-term priorities for the law department. The article includes a sample “manifesto”.

This article sets out a Critical Success Factor and three indicators for planning. Five causes of the failure to implement plans are listed. Bossidy and Charan’s seven insights into the execution of plans and work are practical. A case study details one way to organize and execute a multi-faceted business plan for a law department.

Most law departments do not possess the information or analyze the data that they have to leverage law firm capabilities. The result is a default to retail hourly pricing and the usual discounts for volume.
Too few firms have robust templates for matter plans and budgets. Planning assumptions and a percentage certainty by phase and task are the exception.
When asked, law firms always meet the challenge to produce data about practice patterns, to generate robust matter plans and budgets, and to accelerate the introduction of alternative fee arrangements.

You get what you measure. A key performance indicator (KPI) for “Strategic Impact” challenges the law department to choose its priorities, show more leadership, offer more resources to corporate business priorities, and re-think its critical competencies for senior counsel.

This e-book reprints a portion of our articles from our on-going series of articles in the on-line magazine Legal Business World. This first, short 64-page volume contains 6 articles on law department business plans and strategy and a further 5 articles on workflows and workloads.

The article reviews 6 critical success factors, (CSF) for a successful law department – especially if they must add value to the company. The composite score for most departments is only 5 on 10. Priorities for improvement are proposed.