How to manage an effective in-house legal team
Maintaining a well functioning in-house legal team has become increasingly difficult since the global financial crisis, with a rise in regulatory pressures and departments forced to do more with fewer resources than ever before.
Like many other corporate governance professionals, in-house lawyers are also expected to now play a more central role in businesses. Previously, most legal teams performed a support service that reacted to potential risks within the organisation, but companies have begun placing more strategic importance on these positions.
The result is that lawyers report directly to the CEO more often and are included on senior executive boards with higher frequency. There has also been a shift in focus, with legal teams working towards creating value for the company rather than simply minimising losses.
Our statistics show that 64 per cent of lawyers feel their skills are becoming more valuable, while just nine per cent felt the opposite. This indicates that professionals are aware of the growing impact they can have on organisations provided they are given the right support and environment in which to work.
So what are the best-practice methods for setting up and managing a more effective in-house legal team? Let’s explore some of the ways that businesses are optimising the output from their lawyers.
Develop a strategy and business plan
Writing for the Law Society Gazette, legal director of Shell Donny Ching highlighted the importance of having a concrete strategy and business plan within legal departments.
He noted that while in-house legal may have a budget and a vision statement, it’s not as common for them to have a separate business plan that aligns with the overarching strategy of the company.
“Together, the strategy and business plan provide the granularity required for the legal leadership to plan and prioritise in terms of budget, manpower, footprint, competencies and experience over a period of years, not months,” he explained.
Find the right structure for the business
Legal professionals can operate as part of a centralised unit or spread across different teams. For example, an employment lawyer could work alongside fellow lawyers or be embedded within the HR department.
According to a DLA Piper whitepaper, both options have their advantages and disadvantages and the ideal structure will depend on a particular organisation’s needs. Centralised models tend to have lawyers specialising in one area and providing expert advice, while decentralised approaches mean professionals are more generalised but have greater commercial visibility.
Companies can also opt for a mix of the two, with legal teams embedded within departments in addition to a centralised function under the general counsel’s control.
Set targets and measure performance
Organisations must track the performance of their in-house legal departments and ensure they are meeting the key performance indicators set out in the strategy and business plan.
LexisNexis suggested conducting frequent client surveys to gauge the efficiency, quality of advice, commerciality and communication of lawyers. Businesses should also quantify the risks avoided, which can be achieved by comparing the number of fines and penalties received against industry competitors.
Documenting the business expectations for in-house legal is crucial, and companies should also create regular reports that monitor progress and deliver results in a way that is easily communicated to the board.
Globalisation trends and the fast pace of technology evolution mean the business environment is constantly shifting, which requires organisations – and their lawyers – to meet new demands quickly.
“The competitive pressures facing your companies require them to stay ahead of the curve. They also need their in-house legal teams to have kept pace and be there as well,” said Mr Ching.
“As knowledgeable and integrated business lawyers, we can adopt and adapt many of the business practices and tools and apply them in our teams.”
Build a strong team
Organisations require experienced lawyers with broad skillsets to ensure their in-house legal departments are prepared for today’s complex and changing commercial landscape.
Fortunately, our research indicates that the average in-house lawyer now has 11.3 years experience, up from 10.6 years in 2015. Financial services professionals are even more qualified, averaging 12.4 years under their belts.
Finding and recruiting the best people for the job can be challenging, particularly as fewer lawyers are changing companies in 2016. Our figures revealed that 26 per cent of in-house legal professionals have switched roles this year, down from 31 per cent last year.
Nevertheless, with the right approach and strategic management, businesses can optimise the performance of their in-house legal departments and turn them from a reactive into a proactive force.
Our Market Reports combine our review of the prevailing conditions in the in-house legal recruitment market together with the results of our latest employer survey.
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