A true plan for the legal department

The world of strategic planning can often seem confusing and overpopulated with buzzwords and acronyms such as SWOT or SMART. For an in-house legal department though, a well-crafted set of goals that are measurable can both contribute to a company meeting its overall goals and also highlight the value of the legal services that are being provided.

As a result, legal departments are increasingly drafting their own strategic plans, distinct, yet complementary to the corporations they serve. The plans themselves are more formal and broader than dealing only with budgetary issues and cost control.

Ultimately, a strategic plan for a legal department is “all about a basket of choices,” says Jonathan Cullen, vice president legal affairs and general counsel at Pfizer Canada Inc. “What positions your department for a long-term advantage? A vision is good, but it is not enough, it is not a map,” says Cullen.

The challenge, of course, is crafting a map with enough specific details that will enable the legal team to understand its own goals and to then be able to measure its progress for the benefit of the corporation.

The first thing to remember in coming up with a strategic plan for the legal department is to try to avoid jargon, says Cullen. “Everything sounds more important if you slap the word “strategic” on it. But the plan should use basic language. You should be able to get it, even if you have just been hired,” he suggests.

A detailed yet clearly written plan will also make it easier for the legal team to carry out its objectives, says Sterling Miller, former general counsel at Sabre and Travelocity.com in the United States. “The executive team will know what you are doing and so will your department. You have to make sure everyone is buying in. Otherwise, all you have is a piece of paper,” says Miller, senior counsel at Hilgers Graben PLLC in Dallas, who also writes a regular blog for the in-house counsel sector.

Drafting a plan for the legal department can be a challenge, says Miller, because it also has to be flexible in the event the goals of the company change. According to Miller, a strategic plan can be divided into three main baskets. “Develop cost certainty and efficiency in your day-to-day operations. What is my client’s satisfaction and how will I measure that? Then there is succession planning and talent development. This area often gets overlooked. How can I develop talent, internally and with external counsel?” says Miller.

Richard Stock, a Toronto-based consultant who advises legal departments on business practices, says any plan must deal with more than just costs. “Otherwise, it is just a budget plan,” says Stock, founding partner of Catalyst Consulting. “There has to be an alignment of legal services with the strategic business plan of the company,” he explains. “This is a business process which has been late in coming to legal,” notes Stock. He also cautions against any plan appearing too “legal-centric,” which would reduce the odds of it being effective. “It has to pass the SMART [specific, measurable, achievable, relevant, time-bound] test,” he says.

At Pfizer Canada, the challenge in formulating a strategic plan is that “it means doing something different.
That increases risk,” Cullen says. While legal departments are usually asked for advice on ways to reduce uncertainty, often after the fact, risk is not always a negative concept, he explains. “Legal advice can encourage thoughtful risk that may result in a competitive advantage. Are you getting reward from the risk?” he asks.

Any strategic plan must also show an understanding of the company’s overall mission and goals, states Cullen. “You need a strategy to support,” he states. To do this, one of the tasks of the general counsel is to assess the “business acumen” of the lawyers in your department, he says. A lot of business “self-education” is often required of lawyers internally, beyond that of legal expertise, so they can better understand the objectives of the company, says Cullen, who received the “up and comer” award this year from the Canadian Corporate Counsel Association.

To assist in reaching these goals requires a good relationship between the general counsel and senior executives, says Miller. “You have to be at the table,” he says. “Then you can look at where the company wants to be and what you can do to help,” he adds.

According to Stock, a strategic plan can help a legal department become less reactive and develop a sharper focus. “It increases the odds that things are going to get done and it lets people outside the legal department know as well,” he states.

The duration of the plan may depend on the company’s own strategy, but Cullen says he believes it is worthwhile to set a specific timeline, yet with flexibility. “You have to see it as a ‘living’ plan. We adjust.
Still, it has a real objective that we can strive for. What is the destination you want your team to reach?”

Drafting or formulating a strategic plan for the legal department is the responsibility of much more than one person, stresses Miller. “It is not just the GC’s job. It is everyone’s job. How do I get my team energized and involved in the process” is a question the general counsel should be asking, Miller says.
Part of the plan should include specific goals for other members of the department. “What opportunities am I going to provide for younger or mid-tier lawyers,” says Miller.

Getting feedback from your colleagues is essential, agrees Cullen, who oversees a team of five lawyers and one paralegal at Pfizer Canada. “You have to put your pride at the door. Unless they have significant engagement in the process, your team will see this simply as more work,” he states. As well, general counsel and their colleagues should be willing to look outside the legal world for ideas on drafting and implementing a strategic plan, he suggests. “Don’t be afraid to read things that are not directed at lawyers,” says Cullen.

Perhaps the great challenge for in-house counsel when it comes to a strategic plan is finding ways to measure legal services beyond that of the financial bottom line. The advantage of being able to do so not only benefits the company but the worth of the legal department internally, notes Miller. The legal department does not want to be seen as “just a cost centre,” he writes in a recent blog posting on how to market in-house lawyers to the executives.

Setting “hard measurable” goals can be difficult for legal departments, says Miller. Except for the budget, “everything can be kind of fuzzy” when trying to quantify the value of legal services, he concedes.

It is a view that is echoed by Cullen. “How do I measure good legal advice? It is hard,” he says. However, without some metrics, a strategic plan is not very useful for a legal department, everyone agrees.

One of the key aspects of any plan is the feedback the legal department receives from the company and the type of survey questions that are included, says Stock. “At the end of the year, if you have a survey asking what kind of difference the legal department made, they have to be able to answer you,” he explains. A survey that asks if there is general satisfaction with the work of the legal department is not sufficient, says the legal firm consultant.

When he was practicing as general counsel, the client satisfaction surveys included “hard numbers” in a number of areas, Miller says. “We set up key performance indicators that we tried to measure and we had a goal of increasing satisfaction with the legal department by 10 per cent, year over year,” he recounts.
By doing this, a legal department can get a better sense of its value and also assist in asking the right questions if the numbers have dropped.

While there is an intangible aspect to the value of legal services, Cullen concurs that hard numbers are needed to measure performance as well as what he refers to as a “frank assessment” from senior executives. “You need honest feedback,” he says.

Just as important, he says, is that once a plan is created and put into action, it does not get ignored.
“Real life can hit you and you forget about it. A plan exists, but with no execution. You have to go back to it regularly,” says Cullen.