Lexpert magazine features articles and columns on developments in legal practice management, deals and lawsuits of interest in Canada, the law and business issues of interest to legal professionals and businesses that purchase legal services.
Issue link: https://digital.carswellmedia.com/i/716472
66 LEXPERT MAGAZINE | SEPTEMBER 2016 BY RICHARD STOCK | COLUMNS | Richard Stock, M.A., FCIS, CMC, is a partner with Catalyst Consulting. The firm has consulted to more than 250 law departments over 20 years. Reach him at (416) 367-4447 or at rstock@catalystlegal.com. Momentum for Innovation THE ASSOCIATION OF Corporate Counsel released an update of its "Lead- ing Practices Profiles" in April entitled e Role of General Counsel in Canada. GCs should read the profiles for ideas from law departments that are delivering greater value to their organizations. Efforts to improve efficiency and effec- tiveness are described in the report across four categories: law department structures; professional development; technology; and the selection and management of ex- ternal counsel. A few of the initiatives are leading practices, but most are sensible efforts to improve the ef- fectiveness of legal resources. e participating organizations were CIBC, Ivanhoe Cambridge, the International Air Transport Asso- ciation, Manulife, TransCanada and WorkSafe BC. Interestingly, almost all have significant interna- tional business and legal activity. As part of a preamble, the ACC report sets out eight leading practices: convening the department regularly for collaboration; scheduled communications with geographically dispersed members of the department; professional development; alignment of resources with business units; technology for service delivery; perfor- mance review mechanisms for inside and external counsel; alternative fee arrange- ments; and consistency in compliance ac- tivities. All but the last three can be applied to any department in a company. Two sets of findings are noteworthy from the Canadian profiles. e first re- lates to law department structures. CIBC's law department teams are organized around three strategic business initiatives, plus a litigation and compliance team. Ivanhoé Cambridge has set up three teams: one for each primary business unit. IATA designates six lawyers as divisional counsel and five as regional counsel as part of a plan to assure expertise and global coverage on three continents. Manulife's 180 lawyers and its legal structures are deliberately de- centralized globally, with most embedded in one of three geographical divisions or in the investment division. TransCanada recently moved away from a functional model of legal-services deliv- ery to one where most of its 76 lawyers are embedded with business units, while still reporting through to the law department. WorkSafe BC structures its legal team along specialty lines: corporate/commer- cial, litigation and regulatory. It does appear that self-contained, and somewhat independent, legal teams can be aligned and embedded with discrete busi- ness units once the department and the company reach a certain size. In our experi- ence, this is more oen the case when there is a significant amount of transactional work and less oen the case when most of the work is litigation or corporate support work for HR, IT and finance. e pendu- lum of trade-offs between efficiency and ef- fectiveness in structures swings back every five to seven years. e key is to remember that strategy determines structure. In the meantime, intra-departmental communi- cations and technology help prevent silos and keep the focus on performance. e second finding to emerge from the profiles is in response to the question asked of the GCs about the benefits of their un- dertakings. CIBC believes that they now have the right balance of efficiency and ef- fectiveness. eir services are regarded as reliable and there is positive support from senior management. Ivanhoé Cambridge maintains that their lawyers are more business-like in that they can better secure transactions and meet deadlines. IATA's team has reduced business unit demand for routine services and made more time for educating business professionals on complex issues. TransCanada's town hall meetings help connect and coordinate geographically dispersed team members. Lawyers rely on an advanced project man- agement approach to handle com- plex legal work more effectively. General counsel, however, should keep three factors in mind when they make these types of changes. First, the demand for legal ser- vices should be forecasted for each primary business unit for a minimum of two years. Second, inside counsel functioning as solo practitioners should be replaced by two- person teams to improve coverage and turnaround times. ird, key performance indicators and other metrics are essential to drive priorities and behaviours. ey should target measurable results for effec- tiveness and efficiency. To sum up, sustaining momentum for innovation in legal services depends on the right blend of demand forecasts, progres- sive operating protocols for business units, the reporting structures of legal teams, and key performance indicators. A recent report outlines how major corporations are spurring innovation within their law departments LAW DEPARTMENTS "THE PENDULUM of trade-offs between efficiency and effectiveness in structures swings back every five to seven years. The key is to remember that strategy determines structure."