March 21, 2024

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For general counsels – whether new to the role or not – there is always pressure to ‘bend the legal curve’, that is, to reduce legal costs while helping increase company revenue. Doing so is far easier said than done, and our law department customers often first come to us asking for help converting their organisation from a cost centre to a value contributor. Our solution is six actions that optimise the law department and articulate the value the department brings to the business. In this article, we discuss the first two actions; Parts II and III cover the remaining four. 

Action One: Learn What Your Business Partners Want and Need

Previously, the role of a legal department was that of a ‘lawyer’. Now, in-house counsel serve as ‘solutioners’ and business advisors. Success requires knowing what your clients – the rest of the business – seek to accomplish and understanding the company’s overall strategy, risk tolerance, and near- and longer-term business objectives and goals.  It also requires legal teams to educate their non-law-department colleagues about legal challenges and issues and then facilitate healthy discussion around finding an appropriate ‘solution’ for a given business problem. This type of collaboration provides the legal team with a seat at the table and enables them to provide proactive services.  

The Value of Feedback

A key step is gathering feedback (through anonymous surveys or interviews) on your department. This provides insights on what is (and isn’t) working, opportunities for better collaboration, and ways to improve your effectiveness in delivering legal services. To obtain these benefits, you must methodically solicit, gather, and analyse feedback from your business colleagues. We and our colleagues frequently assist law departments with this work and typically take a two-pronged approach: a business partner engagement survey complemented by interviews of key stakeholders. The survey’s design solicits information on three main topics: overall business and risk strategy, business partner needs, and those partners’ perception of law department performance. 

The surveys use multiple choice, open text, and Likert scale questions to obtain information concerning (but not limited to!) topics such as: 

• The business partner’s understanding of the law department’s roles and responsibilities 
• Whether the law department understands and supports the business’s goals and strategy 
• Whether the law department’s risk tolerance is aligned with that of the business 
• The most important service delivery characteristics 
• What the law department should keep, start, or stop doing. 

Next comes analysing the survey results to develop a list of actionable initiatives and then prioritise them. A leading consideration is an initiative’s potential to deliver ‘quick wins’ – which reflects other vital considerations, including the time and resources needed for implementation and the impact and severity of gaps the initiative addresses. 

This approach gives the law department actionable items to: 

• Refine department strategy and establish a long-term (e.g., 3-year plan) departmental plan 
• Improve execution (e.g., better resource planning, better-defined service delivery characteristics) 

• Build better partnership relationships with business partners (through, e.g., systematically gaining a better understanding of business and legal issues, securing a ‘seat at the table’, frequent upfront conversations, etc.) 
• Demonstrate the department’s value add (using performance metrics that matter). 

Doing the work to learn what your business colleagues want and need is time well spent – it builds relationships with your business partners. It also encourages them to be forthcoming with their expectations and feedback so that the law department understands and serves their needs on an ongoing basis, even as those needs evolve. 

Action Two: Find Internal Efficiencies to Serve Your Business Partners

In tandem with understanding the business partners’ needs is defining and communicating the remit of the law department. There is often a significant gap between what the business thinks legal should do and what sort of legal work ‘moves the needle’ for the business. Once you and your colleagues have clarity about the department’s value-adding ‘jobs to be done’, you can begin looking for opportunities for greater efficiencies. 

The Importance of Work (Re-) Allocation

Time and again, we and our colleagues find that law departments have tremendous opportunities to unlock efficiencies by refining how work is allocated and accomplished. This requires a best-practice driven, methodical approach (using a core-context framework) to gain a foundational understanding of the internal workload and resource allocation. The goal is to make sure the right resources are doing the right work in the right manner at the right time: 

• Right resources:  Internal resource skills and expertise matched with the type of work/task  
• Right work:  Clearly-defined and understood remit for the legal department augmented by empowering the business to self-serve 
• Right manner: Utilisation of the appropriate processes and technology to drive efficiencies across the lifecycle of work 
• Right time: Clarity of business priorities and alignment to drive timely delivery of work 

Applying this framework to the internal workload ensures the proper approach to each category of work: 

• Core mission-critical: ‘in-tasked’ and handled as a priority, 
• Context mission-critical work: ‘out-tasked’ (i.e., disaggregated and handled by different resources),  
• Core non-mission-critical work: streamlined, automated (through processes or enabling technology), and made self-serve, and  
• Context-non-mission-critical work: outsourced to an appropriate provider. 

Two Actions Down, Four More To Go

Actions One and Two are crucial, but the story doesn’t end there. In Parts II and III, we will delve into the remaining four crucial actions that will help optimise your law department and articulate the business and strategic value it delivers: spend analysis, benchmarking, harnessing technology, and reporting using the right metrics. Stay tuned!