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Unleash the Strategic Potential of Your Legal Department
July 25, 2024
July 25, 2024
Written by Michelle Culligan, this article was originally published in the Minnesota Chapter of the Association of Corporate Counsel members LinkedIn group.
Legal departments are often seen as a necessary but costly part of doing business. However, this perception is changing as legal teams showcase their strategic value and critical contributions to business success. Transforming the legal department from a cost center to a proactive business unit requires a strategic approach, effective communication, and clear proof of value.
At the ACC Minnesota 13th Annual In-House Counsel Conference in Minneapolis in June, I moderated a panel that delved into strategies for elevating the role of legal departments within the organization. The panel featured:
Here are key takeaways from our discussion, offering tips to help your legal team demonstrate its value. Whether you’re preparing for budget season or looking to elevate your department’s status, these practical tips and examples will help you communicate the undeniable value of your legal team.
Where To Start?
Begin with a broad assessment of your department’s current state. The panelists shared various methods, from online repositories to simple spreadsheets, to track and record incoming legal requests. Key data points to monitor include:
This data provides a clear picture of the demands on the legal department, and extent of outside resources utilized, so you can identify opportunities for strategic improvements. It can also serve as a baseline to measure progress over time.
Optimizing Legal Department Efficiency
In-house counsel must be more than just technically proficient lawyers; they need to understand the business’s strategy. Improving productivity and efficiency not only benefits the organization but also enhances attorney well-being. By streamlining processes, legal departments can boost morale, improve overall performance, and positively impact the company’s bottom line.
Here are some strategies shared by the panelists on how to achieve this:
Nurturing existing or new partnerships can lead to better economies of scale and more favorable pricing. Sarah Fercho shared, “When we can be smarter and more strategic with our dollars, it benefits our team and our company.” Her organization critically evaluated their outside legal resources, developed panels of approved vendors, and provides quarterly business reviews with each to align expectations and objectives. Regular review tools like scorecards and dashboards allow for continuous improvement and alignment with strategic goals.
Flexible legal talent can be a valuable resource, allowing you to bring in highly experienced attorneys on a flexible basis for strategic needs. Panelists shared examples of leveraging flexible talent, such as finding high-quality talent in niche practice areas or remote geographies with favorable cost profiles.
Another example offered was how bringing in interim attorneys allowed the department to execute career moves and advancements for its full-time employees without the risk of losing momentum on existing projects. Hiring interim attorneys helped to ease that transition period and offer outside-in thinking and best practices that helped to keep the business moving forward.
Demonstrating Value Beyond Cost Savings
The legal department’s value extends beyond cost-cutting. Here are tips from the panel to communicate strategic value effectively:
Legal professionals should think strategically for the business, and not just from a legal perspective. Find opportunities for your team to sit in on business meetings and contribute advice, feedback, or suggestions.
Gretta Hanson explained how her team is thinking cross-functionally: “The value add we bring [to the organization] as in-house counsel is that we really know the business, industry, and what our client is working on,” she said. “Lawyers are problem solvers, so being part of business conversations where they can offer solutions to business challenges demonstrates value.”
For internal clients, resolution time and service quality can be as valuable as cost savings. Streamlining processes and investing in your team to deliver efficient, high-quality results demonstrates strategic value.
The example given during the presentation was bringing in an interim attorney to handle work for a specific client. Dedicating a flexible attorney to this work streamlined a process that had known issues, resulting in more efficient outcomes. Though it required investment from the organization, the result demonstrated improved client satisfaction, and the efficiencies gained created added value on an ongoing basis.
Helping the company avoid risk is a significant value contribution that is at the core of the legal team. Offering creative solutions for minimizing risk while still providing the best legal resources for the situation elevates your team’s value. Ross Booher shared an example of a Latitude client that avoided a tough situation because their legal team successfully navigated the risks, demonstrating clear value. Daniel Santos added, “Sometimes the stakes are so high, you [as a leader] need to recognize when it’s the right time to argue for the best team” even if it means a higher initial investment.
Communicating the Value to the C-Suite
To highlight the legal team’s value and dispel the perception of legal as a cost-center, focus on opportunities for efficiency, strategic contributions, and quantify the value of significant risks avoided. Here are tips from the panelists to communicate this effectively to executive leadership:
Encourage your team to share updates on their contributions and successes. As a leader, spotlight strong examples of cross-functional thinking and collaboration. This proactive communication helps shift the perception of the legal department from a cost center to a vital part of the company’s success.
Use business intelligence and emotional intelligence to request the right resources at the right time. Distribute work thoughtfully and monitor the impact and results to better prove the need for additional resources. Highlighting past successes and strategic growth plans improves your chances of securing resources.
If you’re entering budget season with requests for additional resources, compile concrete data demonstrating the legal department’s strategic contributions, such as cost savings, risk avoidance, and strategic and/or cross-functional advice. Benchmarking helps highlight improvements and efficiencies gained over time, proving the legal team’s role in achieving organizational goals.
From Cost Center to Strategic Business Unit
The perception of the legal department as a cost center is evolving. The practical tips and examples from the panelists provide a roadmap for legal teams looking to demonstrate their value and secure the resources to thrive as a strategic business unit.
By adopting a proactive and strategic approach, supported by strong communication and tangible examples of success, legal departments can elevate the department within the organization.
Whether you're an attorney or legal ops executive looking for legal talent to assist your team or you’re a legal professional looking for a substantive yet flexible role, let us find a solution to meet your needs.