Managing Change Within the Legal Department – the Inhouse Perspective

Background

The organisations inhouse teams serve are regularly required to transform themselves. If they fail to do so they do not excel, or in some cases, they fail to survive. As a result the nature of inhouse practices which support these companies has also transformed over the last twenty years. Drivers for inhouse change include globalisation of commerce and corresponding geographical expansion, cost sensitivities, and increasing regulatory requirements. In many cases, unlike the business units they serve, inhouse legal departments have adapted in an ad hoc manner by accommodating evolving business needs, rather than as a result of careful consideration, assessment and strategic choice.

The Challenge

In speaking with fellow inhouse counsel about the challenges they face, what seems to be a recurring perception is “not having enough time” – not having enough time to do anything other than fight fires, not having enough time to engage in strategic thinking, etc. In other words, not having enough time to manage the business of law. Consider whether an internal legal department is really any different than other business divisions. Is it reasonable to suggest that legal teams have larger workloads to balance than high performance business teams? I suggest not, and that the issue really is that inhouse teams in large part fail to give strategic planning the same dedicated time, treated as a priority, as do our business colleagues. Inhouse teams need to alter this perception. It is for this reason that I believe the real underlying challenge is helping inhouse legal teams embrace change.

The Approach: Change Management within a Legal Department

In order to systemically change a legal team’s mindset, I believe that the entire team needs to feel engaged, needs to be involved in the identification of the issues, and collectively agree on the benefits that can be realised through change. It is only in this manner that Legal Department leaders can obtain true buy-in from their teams, and to have each member take an ownership interest in helping the team evolve. Additionally, the overall direction of the department will benefit in having a diverse set of experiences and perspectives funnel into the strategic thinking process.

To start, it may be that inhouse legal teams need to ask themselves “What is the long term strategic direction of my business team, what are the obstacles they are likely going to face, and how does our legal department proactively position ourselves so as to best serve the business by turning breakdowns into breakthroughs”? It is only by purposely asking and reflecting on these questions that inhouse teams can best anticipate the business’ needs, and be able to optimally contribute to the success of the organisation by making clear strategic choices about the department itself.

Three main areas need to be considered:

1. Treating the legal department as a business;
2. Managing the mindset; and
3. Implementation and monitoring.

Treating the legal department as a business

Carve out dedicated strategic planning time. As stated in my column “Three Things Keeping Alternative Legal Services Arrangements from Reaching Critical Mass, the practice of law is a business, whether it be running a law firm or running an inhouse legal department. Every successful and well run business that I know makes dedicated time to plan, analyse and execute business strategies. Well run legal departments should do so as well, yet few are run with the same level of vigour as a standalone company or even as an operating division. This is interesting when considering that some legal department budgets are larger than many small and mid-sized companies. Take time as a team to step back from the day to day fires, and carve out time to think about the “big picture” and to figure out how your team needs to evolve in order to be ready to fully support your business partners in their growth plans.

Stretch Your Team. The most successful companies have obtained and retained that status not because they have continued to do the same thing repetitively, but because they have had the courage to try new things, and enabled their teams to reach out and seize opportunities. Legal Department leaders need to make sure their teams have the freedom to think big, and be transformative. Changing the way we do things takes dedication – it requires commitment, time and a willingness to work through sometimes difficult transitions. We need to be comfortable being uncomfortable. Bruce Henderson of the Boston Consulting Group defined strategy as: “a deliberate search for a plan of action that will develop a business’ competitive advantage, and compound it.” Figure out what your legal department’s competitive advantage is, and then focus on how to compound it. In other words, where is it your team delivers the most value to its organisation, and how do you leverage that?

Manage the mindset

Know your team. One size does not fit all. The approach that needs to be taken with a large team comprised of long term company veterans will be different than with a small team of lawyers who have just joined. Legal Department leaders will need to be mindful of challenges that may be faced during periods of change. We have all advised our business colleagues during times of transition, and experienced the psychological difficulties that must be managed during times of change. Legal teams are no different.

Do not underestimate adversity to change. It is human nature to do things that feel comfortable. Change is uncomfortable, and can be difficult to manage. Be systemic in your approach, just as the business colleagues you have counselled in the past have done during periods of change within the organisation. Legal Department leaders must realise, and be prepared to commit, sufficient resources to facilitate change, whether this is time, external support, headcount or even just group focus. If this is not done, there is a risk the team will revert to the normal day to day activities it is familiar with.

Implement and Monitor

Accountability. It is important during periods of change that clear accountability, deliverables and timelines are assigned and tracked in writing. The team should be clear on who is responsible for leading certain initiatives, and there needs to be clearly defined deliverable dates. Otherwise, there is a risk of stagnation.

Continuous Improvement. Evolution of a team is not static; it must be continuous. This is the only way to ensure that a legal team is optimally serving its organisation, and that it remains positioned to do so in the mid and long term. Legal Department leaders will need to implement and then continue to monitor new processes/approaches/models that get implemented. Some will be wildly successful; others will fail. If you do not encounter new ideas that do not work, it probably means your team has not pushed itself hard enough.

Concluding Remarks

Legal departments are consistently stretched for resources, including budget, headcount and time. However, Legal Department leaders should not allow this to be an excuse for failing to engage in vigorous strategic planning for their legal department. Evolution of the legal team is necessary to best serve the organisation, and this will require a certain amount of change. Taking a disciplined approach to:

1. Treating the legal department as a business;
2. Managing the Mindset; and
3. Implementation and Monitoring

will best ensure your team is equipped to manage change within the legal department. This will help enable your team to unlock and capitalize on its potential and be able to proactively and flexibly align itself to support the business.

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The thoughts, ideas and views expressed in this article are that of the author alone, and do not represent those of his employer. This article was written in the spirit of contributing to the advancement of Corporate Counsel and the organisations they serve.