By: Lloyd M. Johnson Jr.
General counsel have been called many things, but visionary has rarely been one of them. Though most GCs have, over the past 40 years, made the journey from administrator to counselor to gatekeeper to strategic advisor, that’s generally as far as they’ve gone. The highway that most general counsel – and their legal departments – still travel remains pitched toward the same horizon it’s been pitched toward for decades. The scenery along the road has changed little. And it’s possible that the horizon line itself is nothing but a cliff.
What’s become increasingly evident is the need for off-ramps from that highway and, in fact, a brand new destination: a legal department headed by a general counsel who, by dint of truly transformative change, has established herself or himself as not just the traveler but the mapmaker, the one establishing the directions in which the company will move and adapting the map as the company encounters roadblocks, detours and changes in terrain.
This column is the first in a series that will explore that evolution, digging deep into what general counsel need to understand – and master – to become mapmakers, exploring the factors that underscore a visionary approach to leading both the legal department and the company, and dissecting some of the most evolved legal departments to discover the transformational steps they’ve taken – and why. We’ll see how their growing understanding of the businesses and industries in which they work, as well as the comprehensive command of financial issues, analytics, technology, talent development and organizational design, is allowing general counsel to demonstrate the necessary leadership and commitment and, as a result, gain support and resources from the rest of the C-suite team.
Between 1997 and 2016, I spent well over a hundred hours a year talking with general counsel about what they should be thinking – and doing – to better serve their clients. As publisher of Corporate Counseland InsideCounsel, the founder of two nonprofits, and the organizer of more than 30 invitation-only thought leadership gatherings for general counsel, I’ve been steeped in discussions of growth, succession and influence, exploring the challenges that in-house counsel face as they seek to guide their companies in an increasingly complicated business world.
This column is an outgrowth of those conversations, incorporating both thoughts shared and lessons learned over the years. In preparing for this first column, I spent some time talking with Nancy Jessen, senior vice president, legal business solutions, at UnitedLex, about a framework she’s developed after years of consulting not only with legal departments but also with associations, such as the Association of Corporate Counsel. Following the highway metaphor, Jessen sees seven off-ramps that can lead in-house counsel from their traditional routes to destinations where they will find themselves not just the drivers but the mapmakers. The trick is getting off the well-worn highway and taking a new route; the intent of this column is to help you do that.
The 7 Ways to Change Course
Operational support: “The law department used to be just a place where people turned when problems arose,” says Jessen. “Giving legal advice. Period. But being a true enabling function of the company is so much more than legal guidance.” What that means, she says, is turning the law department “from an operational function to a collective whole” that thinks about strategy, technology, process and other disciplines that need to be in place and also enables the leadership team – not just the lawyers – to make sure that the legal guidance is aligned with what the company is trying to achieve in the most efficient way possible.
Metrics and measurement: “While metrics have been used for a long time,” Jessen notes, “the legal industry’s approach has been mostly cost driven: percentage of spend against revenue, against the number of employees, against the number of attorneys.” What’s been missing is a focus on value. Useful metrics, she explains, would allow the general counsel of business units and functional areas to “demonstrate what we are doing to accelerate the business, increase revenue and learn from our mistakes.”
Outside counsel management: While this topic has long engendered debate, Jessen says that, in general, “people don’t get beyond the surface.” It’s not just cost savings, she notes, but “it’s understanding your entire portfolio of legal work: What is strategic, high risk, complex? Where do you want your internal team to be spending time, and where do you want outside counsel – or another external vendor – to complement that.” Critical, she suggests, is educating in-house lawyers on other disciplines, such as financial management, so rather than getting “starry-eyed about the big sexy work,” they’re keeping the big picture in focus at all times.
Spend analytics: If, in the course of managing outside counsel, a legal department has a full understanding of its legal portfolio, its spending patterns and its underlying costs, then it’s better able to negotiate with outside firms, especially when it comes to commodity work where, Jessen says, “costs should go down year over year.” With comprehensive spend analytics, which involve team members in other disciplines, law departments can “turn the table on who is in charge of the pricing.”
Technology: Companies are often dazzled by a shiny new item. However, Jessen notes, many companies have found themselves dissatisfied with the document management, matter management, e-billing and other systems in which they have invested heavily. The key, she says, is moving beyond simply tracking usage to more closely evaluating what needs to be automated. How, for example, can you automate the low-value tasks? “Enabling clients, eliminating work, helping lawyers do their jobs – that’s the next wave of technology,” Jessen says.
Organizational design: It’s time to step away from the politics of who reports to whom and the prestige that comes with that, Jessen says. “It’s less about hierarchy and more about alignment with goals,” she says. “We need holistic and comprehensive solutions instead of silos.” This means bringing in other disciplines and flattening the organization. Career development within the legal department, Jessen notes, should be rooted in “understanding the whole portfolio of legal work and where it fits on the continuum.” If lawyers are kept siloed by area of expertise, she cautions, “they won’t understand how the business hangs together. Making an IP lawyer a litigator, for example, or putting a business lawyer on the corporate team will allow you to develop a leader, not just technical expertise.”
Internal resource management: The most important work that a legal department does, Jessen contends, is being explicit about priorities and using that to determine where the internal resources are focused. “It used to be that the best work went to outside counsel,” she says. “But it should be the opposite. The inside team should understand the business and lead the high-value work. They should translate legal theory and guidance into true strategic advice on moving the company forward.”
While Jessen admits that most of these topics have been discussed before, the key for general counsel looking to move from being a service provider to a strategic advisor to a mapmaker is advancing from incremental to foundational change, from talking about, say, spend to focusing on enablement.
And that’s where we’ll head with this column. In the next installment, we’ll talk with several executive search professionals who place general counsel to see how the GC mind-set has changed over the past 15 years. Then we’ll look at three visionary legal departments, zeroing in on the differences that broader subject matter expertise, more established business and financial acumen, greater commitment to efficiency and effectiveness, and a more companywide understanding of leadership can make.
Later, we’ll look closely at the emerging role of legal operations, and we’ll discuss the sorts of skill sets and approaches that heads of legal ops need and the different roles played by general counsel and chiefs of legal operations in transforming legal departments.
Finally, pulling it all together, and with the backdrop of vision, project leadership, long-term commitment to change, C-suite support and an understanding of law department cultures, we’ll develop our own map for a new highway that general counsel can navigate as they become the mapmakers themselves.