LEGAL
Each year, I try to make time for some kind of end of year/beginning of year intro- and retro-spection: taking a break from the "urgent" to think about some of the bigger strategic issues that are important. I thought I'd share what is currently on my list of "big thoughts" for law department leadership to consider to spark some good "think-time" for you, too.
A lot of law departments are spending significant time these days re-engineering the "how" of their internal operations, and likewise instructing valued firms to focus more attention on "how" they provide service and do business. This focus on "the how" is a re-direction of the energy lawyers traditionally put on "the what" of their service model: touting their specialty credentials and cultivating impressive and successful legal pedigrees. Of course, a lawyer's experience and judgment, her substantive focus, and her commitment to top quality service is very important. However, given that there's a glut of experienced and talented lawyers and tremendous firms on the market to choose from in every jurisdiction in the world, the substantive skills of devoted and hard working lawyers – though necessary table stakes – are hardly distinguishable qualities.
And so "think-time" topic #1 is:
Why in the world would a law department set as its internal goal, as I've heard a number of top-line GCs state in the last year, that they wish to model their department as the very best "in-house law firm" in the world? Law departments retain law firms for very good reasons – mostly related to specialized legal expertise or the need to outsource certain kinds of work departments don't want to or simply can't do.
Indeed, most general counsel have an ongoing list of all the things they wish their firms would do differently or better: most of those things relate to "how" the firm does its work and serves their clients and not whether they know employment law or can advise on a complex transaction. It's presumed that any firm they select will have that "quality" covered. So it shouldn't be the focus of in-house lawyers to build a better law firm inside the company; it should be the focus of in-house leaders to build a better legal department that's partnering with the business to advance their strategic goals. Then they can find and retain the better law firms who do the work that the in-house team doesn't want to provide or shouldn't stretch to insource.
Being in-house means you want to excel at doing what law firms don't do well – not that you seek to replicate the services they can provide or any of their many dysfunctional and perverse practices. Law departments should be models of efficiency, and champions of lean and result-oriented initiatives. They should be focused on delivering preventive and progressive counsel and solutions, rather than the remedial services, and on the highest-value work, rather than for fungible tasks.
If anyone should be modeling off the other, it's law firms that should be modeling off the service focus and business savvy of leading in-house departments. If in-house lawyers are most highly valued when they act like fully-integrated members of the company's business teams, then it should be the farthest thing from their minds to want to act like third party purveyors of legal expertise. Focus 2015 on what your law department does differently and better than your firms, not on emulating those who succeed by generating legal work (rather than eliminating it).
While we're on the subject of assessing the value of in-house and outside counsel, when are lawyers going to get over their fear of being evaluated and compensated based on performance and results, rather than on the traditional law firm method of hard work and tons of accumulated hours? Yes, we all want loyal and hard-working lawyers on our team, but performance must be assessed by standards that are focused on improved value, adopting best practices, or delivering defined client results, rather than high levels of activity generated by the lawyer.
And so "think-time" topic #2 is:
What will you do to assure that your lawyers – both inside and outside counsel – know that their performance and thus, their compensation and advancement, is based on something other than "I'm really smart and I've worked really hard"? How will you define the results you want them to achieve and then measure their success in accomplishing those goals?
And further (and I know this is incendiary for some): How can you influence a new paradigm for compensation of your outside counsel, one that is not based on the traditional metrics like hours worked, billed, and realized? How can you, in your role as client, help re-engineer the comp process in your leading law firms so that lawyers who provide work for you on a "value basis" (in terms of fees, staffing, knowledge practices, deployment of technologies, improved collaboration and communication practices, etc.) are rewarded within the firm's compensation structure, rather than punished, when they succeed for you? (No matter what most firms say, they still define success and advancement and compensation based on metrics related to hours worked, billed, and realized, and not on an objective assessment of whether the client loved the result or the lawyers' practice improved the firm's ability to lower costs or improve efficiency.)
If in-house leaders don't re-think and re-purpose their standards of evaluation and compensation, they are effectively asking top lawyers to swim like salmon, upstream and against the current, only to lay their eggs and die. Essentially those lawyers do the work they've been asked to do, only to find that they're not paid commensurate with the value they drove or the relationships they advanced, while those who ignored the "value" instructions and put in more of the traditional hours are more highly compensated and rewarded. Don't set your lawyers up to fail by asking for efficiency and value in a workplace that is ruled by the metric that many of us get paid to meet: hours, and lots of them. You can't just say that you want greater value; you have to pay people who perform to your articulated standards of value, and not reward those who don't.
And finally, because it's time to get back to work, the most significant self-assessment I'd ask of you and your teams in the coming months is to honestly assess whether you simply listen to and like all these interesting new ideas for improving the way we work and deliver service, or whether you're actually committed to changing the way you work. It's like that old canard about who's really all-in at breakfast time: the chicken who lays the egg for your omelet supports breakfast, but the pig who supplies the bacon is completely committed to the meal.
And so "think-time" topic #3 is:
What are the one or two or three things you can and will choose to do differently this year? And how will you get them done?
It is easy to be overwhelmed by the variety, the novel nature, and the extravagant promises made by all the emerging products and service providers on the legal market, and all the new best practices and new skill sets that many of us – myself included! – like to showcase in order to demonstrate how to improve your department and its work. But it's the implementation, and not just the array of products and services available to you, that's critical. Without a commitment to actually change your behavior and start doing things differently, you're simply left to admire the passing parade of ideas that bombard us all in our daily practices. I'm totally for new ideas and new products and new service providers: but they offer no value if they aren't accompanied by the legal team's will to implement them.
Your legal department and internal customers deserve better than simply more of what we've been doing for the past 50+ years. So think about a few of your top priorities, and target them for change and improvement. Then focus on getting just those few things done: calendar them, assign responsibility, provide a budget or the necessary time/resources, and establish metrics for success. Since first successes usually breed further successes, your team's confidence and sense of accomplishment and momentum will grow as they complete their first few initiatives and find that they're rewarded for doing so with advancement, recognition for saving time and money, and the prevention of costly failures. Such is the definition of job satisfaction.
Of course, I'd never ask you to "be the bacon;" but I do encourage you – as you sit and contemplate some of the learnings of 2014 and your thoughts for 2015 – to make a commitment to do a few things differently at your desk this year and then measure how much mindfully re-examining your longstanding behaviors and changing your practices can improve your results.
Susan Hackett is the CEO of Legal Executive Leadership, LLC, a law practice management consulting firm she founded in 2011 after serving as the Senior Vice President and General Counsel of the Association of Corporate Counsel (ACC) for more than two decades. As an insider working with thousands of top corporate practice leaders, Susan has an amazing breadth of experience with the inner workings of in-house practice and the implementation of value-based legal models, as well as an international reputation for innovation, excellence, and success. Comments welcome to hackett@lawexecs.com.
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