When we were recently facilitating a session around how to increase the impact of the legal department in a corporate environment or in institutions we quickly arrived at the importance of adding value. Most legal counsels and their teams are challenged by the notion of value add in their daily interactions in their firm. Indeed if we look at what insight available surveys provide as to the expectations from CEO/ general managers on their legal department, then increasingly these make reference of the need to provide added value, being innovative, commercial and costefficient. Furthermore such surveys confirm that good technical skills are considered a given. Let’s focus on value add.
Value add is a term that is quickly proposed but not one that uniquely defines what this means to you in your firm.
When talking to legal counsel they give very varied descriptions of what they and their team stand for: some just feel they are fire fighters running from one fire to the other, others feel they are expected to be always ready to provide service but are not regarded as a true member of the management. Some do confirm they are regarded upon as a legal and risk expert and finally a few feel they are trusted business advisor for their company. Adding value is quite different in each of these situations. That is further complicated by the different environments in which the company may operate : is it in a highly regulated business, or are big deals making out the clout of the business and so on. Regardless of this all firms and organisations are increasingly confronted with challenges in privacy, security and liability and surely the legal department has a key role to play in there allowing an improved impact on the business. So how can you truly improve the value add of your legal department? You can achieve this by helping the business to understand your value add.
Except in those particular circumstances where for example the companies IP rights are actively exploited as an economic value there is a challenge at hand to define the value add. Our experience is that you create added value by engaging with the business to build more insight in the value of their deals or capturing what importance an individual adheres to a particular transaction, participating in management meetings and engaging informally with key decision makers, providing relevant training and asking feedback from your internal clients but also from your outside legal counsel and engage the latter in getting more added value from them directed towards the business. Finally make sure you measure on what is relevant so at least cost versus budget.
Why should you measure? After all as an in house counsel you work primarily with managers and you can’t ignore the importance of measuring in a corporate environment. So as a manager of your department you should have a minimum of internal KPI’s( key performance indicators) where measurement of the outside legal spend is a minimum but also non financial indicators may be relevant such as absence or avoidance of litigations and measuring progress versus objectives. The other area where the legal department can increase it’s impact through measurement is by defining and following up on some key risk indicators (KRI’s) such as legal department attrition or average years of experience in the team, as well as geographic risks. Once you define what you wish to measure you should ensure regular reporting on it and making it part of the management agenda.
These were just a few thoughts on how a focus on value add can improve your impact. We will focus on other ways to improve your impact in our next articles, in the mean time do not hesitate to contact us to further share views and experiences.