Leading small and medium legal teams

Practical Law hosted the second annual Leading small and medium legal teams event on 15 October 2015. This article highlights the key topics of discussion, which included  demonstrating your team's value to the business, making the most of external providers, and managing and leading the legal department.

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Contents

Practical Law hosted the second Leading small and medium legal teams event on 15 October 2015. The event was attended by in-house lawyers from companies across a wide range of business sectors and sizes. This article highlights the key topics of discussion, which included demonstrating your team's value to the business, making the most of external providers, and managing and leading the legal department.

 

Defining the role and function of the legal team

There is a big difference between the role and the function of a General Counsel (GC). To perform the function well, you need the right technical expertise. To perform the role well, you need the right behaviours. GCs in small and medium-sized enterprises (SMEs) often have the opportunity to be more influential than GCs of larger organisations. Developing appropriate behaviours should therefore be as important as keeping up with your technical skills to build up the essential relationships you require to maintain your influence.

How many different hats can your wear?

As GC of an SME, there are often other hats that you can wear as a natural extension of your job. These include:

  • Compliance.

  • Company Secretary (often a good fit that gets you on the board without being a director).

  • Human resources (HR).

  • Risk.

  • Investor relations.

  • Public relations (PR).

These roles may come your way because there is no obvious home for them or because everyone else has taken a step back and left you with it. However, as lawyers by training (if not by nature and personality) are predisposed to be cautious and risk averse, not every hat will be a comfortable fit.

Beware of diluting the GC brand by taking on too many additional roles. Remember that you are paid, reviewed and assessed on being a lawyer. Nevertheless, taking on some ancillary roles can be a positive experience. Lawyers have a particular style of training that focuses on understanding and analysing issues through a limited lens. Different roles provide an opportunity to bring those skills to bear on other parts of the business.

Look out for potential conflicts of interest

It is important to stop and consider whether the additional functions are compatible and do not conflict with your main job. For example:

  • As GC, you report to the business but, as head of compliance, you should report to the regulators.

  • If the GC assumes the role of trustee of the company’s pension funds, the Chairman of the trustees makes decisions but the business pays the bills.

Remember which hat you are wearing when giving advice and keep information for the different roles separate. For example, a communication from the Head of HR will not have the same protection as a communication from an in-house lawyer.

Building influence in the business

Historically, a lawyer's influence came from their job title. Increasingly, a GC's respect and influence are derived from their relationships with other business executives. While every lawyer strives to be independent, this is not always easy for a GC of an SME, whose success can depend on how well they are aligned with the CEO of the business.

Although you need to be aware of politics, avoid becoming a political player. If, in every tricky situation, you can clearly show that you are acting in the best interest of the company, you will earn the respect of your peers and build your influence in the company.

 

Managing key internal relationships and expectations

Managing internal relationships

A lawyer's training does not focus on soft skills, such as managing internal relationships. However, as a GC you need to understand what you are trying to get from the relationships. For example, you will have a different relationship with your junior colleagues than with your senior executives.

The relationships you manage are often not just one-to-one. For example, you need to build a relationship with your board as a whole. This can mean building relationships with people within the business that you do not like or managing conflicts between senior executives (for example, two company founders who may have very different risk appetites).

Managing the business' expectations

The legal department's aim should be to work with the business on the highest risk and biggest value issues. Create a process that defines what the legal department does and what it does not do. Scoping this work is very important and, although it is a time-consuming exercise, the effort is well worth it in the long-term. Publish the document on the intranet and refer the business to this document to make it clear why you are pushing back on a particular request.

Stephanie Dominy (General Counsel, GTS-GTD Kuoni Group) has kindly shared the document ( www.practicallaw.com/8-620-9914) that she has used to manage her business' expectations.

 

Using technology creatively

Consider what technology you require now and what technology you think you will need in the future.

Re-purpose existing technology

Make the most of the technology you have at your disposal and consider whether it is being used to its full capacity. Look across the whole of the business to see whether existing technology used by other business units could be re-purposed for the legal department. For example:

  • You can use internal communications tools, such as Yammer or Chatter (a messaging service that is part of Salesforce), to raise the legal department's profile. Flagging up important regulatory changes through these channels can also help spread the message across the company.

  • You can adapt platforms employed by other part of the business, such as JIRA (an issue tracking product), to help the legal department keep track of its work.

Use external providers and free technology

If you have no budget and no help from your IT department, look outside your organisation for assistance. Leverage your external providers and the technology that they have at their disposal. The external providers market is competitive and some new entrants (for example, Riverview Law) are keen to share their technology. Also make the most of available free technology such as Google docs and Skype (a good way of keeping in touch with remote teams).

Purchasing new technology

If you are considering purchasing new technology, ensure that other parts of the business (such as Finance, Procurement and IT) understand why the technology is required and, where possible, how it can be used to help them. Do plenty of research before beginning the procurement process. For example, attend legal IT shows and find out what technology other similar-sized legal departments use.

It may be possible to work with a technology provider by offering to act as a guinea pig on a beta site that they are developing. This gives you the opportunity to influence the way the product is designed and built. For example, one legal department worked with a software company that was developing a path to procurement system. That system is now used throughout the company and has revolutionised the way that the procurement process operates in that business.

 

Making the most of external providers

Ideally, an external provider should be an extension of your in-house team. Their aim should be to make the in-house team and the GC look good. The business will be unaware if, or when, an external provider is involved (they are simply interested in getting the right answer) and, therefore, the GC's reputation is on the line each time a decision is made to get, and rely on, external advice.

Suppliers or partners

There is a vast difference between an external provider who is simply regarded as a supplier and one who is regarded as a partner. A partnership implies that both parties are working towards a shared goal. Use this model when engaging external providers. Although this approach requires time and effort from both parties, it is worth the investment. Identifying providers that have a similar culture and personality to that of your department also helps you to develop long-term relationships with your providers.

How important am I to you?

Although a small legal department may not always provide its external law firm with the highest revenues, it may give them the opportunity to work with a company operating in a new and fast moving industry (for example, a cloud based technology company). Most law firms are looking to build a diverse client portfolio and are keen to gain access to entrepreneurs in different industry sectors. They also know that GCs move from company to company as part of their career progression strategy and are therefore interested in developing long-term relationships with them.

Getting to know your business

To really add value, external providers need to get to know your business well. Although secondments are challenging and expensive for law firms to provide, they can give useful opportunities for the secondees to really understand a client's business. Firms should view them as an opportunity to develop the relationship with the business and, where appropriate, provide senior rather than junior lawyers to make it worthwhile for both parties. Reverse secondments (for example, one day a week) can also provide helpful opportunities for knowledge transfers and relationship building.

What does the future hold?

The GC's relationship with the corporate world is evolving (80% of work GCs are asked to get involved with is non-legal work) and their relationship with their external providers should change too. Law firms need to become genuine commercial advisers to the GC. Although new models are breaking through (for example, Lawyers on Demand) there is still a need for law firms to provide high-margin, sophisticated work. Nevertheless, a divide remains between in-house and private practice that must be bridged. The legal profession as a whole needs to be conscious that the Big Four accountancy firms regard risk (including legal risk) as their territory.

 

Managing and leading the legal department

Setting a clear departmental strategy

A GC is unlikely to be involved in much black letter law. The team must deliver the output, not the GC. Your role is to advise the board. Your first task should therefore be to define your team's role and purpose. Invest time in talking to the business to ensure your department's strategy and goals, together with its values and behaviours, are aligned with the rest of the business.

Look ahead and try to identify what is likely to be coming down the track in the next two or three years. Your plans for the future must be flexible to keep up with often rapid changes to your company's strategy, particularly if your company operates in a fast-moving industry.

Effectively resourcing the department's work

Make sure the business understands what the legal department does and does not do. For example, if the legal team is required to take on "urgent" work, the business may need to pay a premium for it. Create boundaries and learn how to say "no", gently. Again, try to plan ahead rather than just reacting to problems that arise. Evaluate the tasks that your team is involved in and consider whether the work should be:

  • Kept in-house.

  • Outsourced (for example, outsourcing all litigation because you do not have the necessary specialisation).

  • Insourced (for example, hiring a five-year qualified lawyer who can handle 90% of technical IP and IT work).

Categorise non-legal work and decide whether you should be doing it all.

Empowering the business to make decisions

Consider pushing out low-risk activities from the legal department to the business. For example:

  • Merchandising contracts to the licensing team.

  • Marketing promotions to the retail team.

Although this can take both time and effort, giving the business ownership and responsibility for an activity can be worthwhile. The business may start to provide solutions to problems themselves, rather than always reverting to legal. Remember to highlight the consequences for the business if they fail to take responsibility. For example, by making the marketing team deal with a complaint from the Advertising Standards Authority.

Before pushing out any functions from the legal department, make sure the business has the necessary tools and training to perform the tasks. The legal team can assist by producing the content for webinars to help train the business. A quiz at the end of the webinar is an effective method of measuring whether the information has been taken on-board.

Keeping your team motivated

In a small team, there can be no passengers. Make sure you fully understand what your team is working on and ensure they understand what you are doing (unless it is confidential). Informal, two or three minute stand-up meetings can provide a valuable insight, especially if you supplement them with longer one-to-ones each month.

Providing motivation in a team with a flat structure, with no obvious career path, can be difficult, especially if all your team are generalists. Empower your lawyers by allowing them to make decisions and encourage them to collaborate with their colleagues in the legal department, together with colleagues across the business.

Enable your team to get out into the business. The time and cost implications will be worth it in the long-term. Understanding the business' end-to end processes will help your lawyers understand their role in a wider context and enhance their ability to do their job. Although embedding lawyers in the business can be an option, ensure that their rewards are not connected with the success of the business unit they are embedded with to avoid them "going native".

Managing and leading a department can be challenging when the team are not all in the same location, especially if they work across different geographies and time-zones. Technology, such as Skype and Whats App, can help you keep in touch.

 

Demonstrating your team's value to the business

Businesses like to say that their decisions are based on data. Therefore, what data can you as the GC provide the business with to demonstrate your department's value?

Focus on data that the business is interested in

A recent law firm survey showed that 40% of GCs interviewed thought they were doing a good job but only 14% of their CEOs agreed with them. Therefore, make sure you ask the business what data it wants before starting to measure your department's performance. It is not worth focusing on metrics that the business is simply not interested in.

Consider whether your business has hired you to be a functionary, a corporate policeman, a transaction junkie or counsel. Are you clear about the mission, the strategies and objectives of the company, and can you clearly articulate the part that you as GC have to play? It is important to keep requesting feedback from the company to ensure that you are keeping pace with business objectives as they evolve.

Use value-add metrics

Data can include:

  • Ratio of lawyers to employees (this helps with conversations about resourcing).

  • Spend v budget.

  • Total legal spend as a percentage of revenue.

  • Litigation exposure.

  • Time recording.

  • Turnaround times.

  • Employee engagement and retention.

  • Customer satisfaction.

Publicise your success stories

Do not hide away. Clearly communicate and publicise your success stories back to the business to ensure that you generate the maximum amount of goodwill for you and your team (for example, if you have been successful in overturning fines or defeating local regulatory authorities). Use emails, newsletters and internal communications, such as Yammer. Building up goodwill within the business is vital. It doesn't matter how impressive the metrics are if your colleagues do not like you. Make sure people see you as a business ambassador and not "just a lawyer".

Judicious use of surveys can help

Conducting regular, formal and informal surveys can help you discover whether what you spend time on is what the business thinks you should spend time on. Keep the surveys short and remember to send them to departments that need and use the legal department as you are more likely to get useful feedback from them.

 

Horizon scanning: keeping ahead of the curve

The ECJ's recent finding that the EU/US safe harbor decision for the transfer of personal data from the EU to the US is invalid demonstrates that it can take only one court judgment to throw a business into disarray (see Legal update, ECJ rules that the EU-US safe harbor arrangement is invalid ( www.practicallaw.com/5-619-2986) ). Fortunately, in-house lawyers have the opportunity to be slightly ahead of the game when it comes to horizon scanning.

Really understand the business and its strategy

Focus on understanding your business and its strategy, so that you know what laws and developments to look out for in the next two or three years. Identify the parts of your business that are particularly fast-moving and the areas of law that are fast-moving that may have an impact on your business. For example, if your organisation is contemplating operating in an emerging market, you should already be thinking about which law firms you may want to work with in that jurisdiction.

Keep an eye on geopolitical events. For example, will your business be impacted by:

  • Regional devolution.

  • EU referendum.

  • The ongoing EU migrant situation.

Be aware of your own blind-spots in helping execute the business' strategies. For example, do you need a better understanding of finance or operations? Collaborate with the CEO and CFO, and attend lots of meetings (for example, operational committees and remuneration committees).

Keeping up-to-date

Establish systems to help you horizon-scan. Know-how services, from providers such as Practical Law, and law firm databases that are provided free to clients, can all assist. Also, keep pace with technological solutions and factor in whether these can assist you.

Develop your networks

Build and invest in your wider network of like-minded GCs and in-house lawyers so that you are tuned into industry and other developments that may affect your business. Forums and trade associations (for example, ACC and the IT Lawyers Forum) can be extremely useful sources of information and contacts.

 
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