Corporate Law News

INSIGHT: A GC’s First 90 Days—A Five-Step Health Check of the Law Department

July 9, 2019, 8:01 AM

Taking on the role of an organization’s new general counsel can be daunting: there may be many areas requiring attention and you want to make an immediate impact. While you may feel compelled to jump in and tackle every issue, resist the urge to do so.

Prioritize the urgent requests and take the time to adopt the physician’s approach: check your department’s vital signs. After you have gained a comprehensive understanding of the department’s overall health, you can optimally develop a strategy to prioritize and address opportunities.

Here are five steps new GCs should follow to take the pulse of their legal department.

1. Develop a Strategic Plan That Aligns With Your Company’s Overall Strategy

Law departments are most successful when they are aligned with the broader organization’s strategy. Invest time engaging with leadership to deeply understand the organization’s overall direction and how the legal function can best align to support. Ask about the law department’s historical role and performance, as well as anticipated future business needs.

With an understanding of how the law department should align with the overall organizational priorities, you can develop a department strategic plan and service delivery model with specific, actionable steps to effectively meet the changing needs of the business.

2. Compare Your Department’s Performance to Industry Benchmarks

Benchmarking is an effective way to take a pulse of your law department’s overall health and identify areas that may require further “diagnosis.” Study how your department stacks up against its industry peers, using tools such as the annual HBR Law Department Survey to compare your company’s ratio of legal spend to revenue, distribution of spend, work allocation measures and more.

Are there areas where your department is an outlier? If so, investigate the underlying reasons. Identifying the drivers behind the numbers may reveal areas that require a deeper dive and present opportunities for improvement. (Of course, you may also conclude that there are legitimate reasons for the variance and there is nothing you need to change.)

Armed with this information, you can make data-driven decisions to identify and prioritize areas for further assessment and improvement to include in your department’s strategic plan.

3. Evaluate Your Resources to Ensure They Are Handling the Right Work

It is critical to ensure that the right resources are doing the right work in the most cost-effective, efficient manner. Within the organization, this means empowering your business clients to perform work that is not truly legal in nature (e.g., with self-service options and the requisite training) and effectively using your department resources – assigning your most skilled resources to the most complex, highest-risk work and delegating routine, lower-risk tasks to appropriate staff.

Externally, consider whether you have allocated work appropriately to outside counsel and alternative legal service providers, again sending the highest-value work to the most specialized, experienced firms, commodity-level work to firms with lower rates or volume pricing arrangements, and tedious, repetitive work to lower-cost external resources, such as e-discovery providers.

If your department does not have a convergence program, also look for opportunities to consolidate work in fewer firms. Your preferred firms will become intimately familiar with your department’s goals and methods and be able to deliver quality work more efficiently.

4. Partner With Outside Counsel to Gain Better Value

Review any available metrics on outside law firm performance. (If you do not have any metrics, we suggest adding outside counsel evaluation to you plan.) These metrics not only help your outside counsel align with your goals and objectives, they also open communication channels to ensure counsel is bringing the most possible value.

Metrics discussions can evolve into ongoing dialogues with outside counsel, helping you to partner with them to seek creative, “win-win” opportunities. You will ultimately strengthen the relationship and achieve better results and greater value for both.

5. Identify How Technology Can Enhance Efficiency and Drive Performance

Your legal team is probably under constant pressure to do more with less. But even with a lean budget, you can bring in new tools and technology to streamline work, improve efficiency, and drive down costs, enabling you to handle the increased demand.

For example, legal spend analytics improve decision-making, identifying opportunities where tools can help you achieve these goals and supporting decisions about headcount, budgeting and outside counsel. Additionally, solutions such as workflow management and contract management can eliminate manual processes and trim costs. For instance, an automated, self-service contract solution reduces cycle time, expanding your team’s capacity without requiring additional headcount.

Follow-Up Recommended

By conducting this “health check” in your first 90 days, you can identify opportunities that will help the department more effectively meet its short-term and long-term goals.

Of course, like a physician, we also recommend follow-up exams—periodic re-assessments to re-evaluate your department’s performance and progress. Participating in well-established annual benchmarking surveys is one way to make sure you do this on a regular basis.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Lauren Chung is managing director at HBR Consulting where leads the Strategy + Operations practice within the Advisory business. She has over 20 years of management consulting experience and works with general counsel and law department leadership on strategic, process and operational improvement initiatives.

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