The Great Recession has caused many in-house legal departments to either shrink or, at best, remain the same size. The workload, however, has neither contracted nor remained stable. For many in-house departments, it has increased. Requesting additional resources has not been a realistic option.
The only viable alternative is to redeploy the legal resources in a manner that both reduces costs and motivates the legal team. In any economic climate (but especially before the recovery gets underway), retention of the best members of the legal department should be the goal.
To do so, you must create a challenging environment that keeps the legal team members engaged and involved while maintaining optimal performance and output.
So now is the perfect time for a critical analysis of how your department functions and how it relates to the overall business in which it operates.
Some key questions to ask:
- What kind of services do the in-house attorneys perform now? Are they aligned by business function, by type of legal services or by substantive areas of law? Do you have an accurate gauge of their level of satisfaction with their work? Do you have an accurate gauge of the business people's level of satisfaction with the attorneys' work product?
- Under what types of situations does the company find itself in litigation, either as a plaintiff or a defendant? What are the high-risk areas that lead to litigation as compared to the low-risk ones your company faces? Are there proactive ways in which the legal department can effectively act to minimize the high-risk situations that lend themselves to litigation? This requires a careful analysis of the nature of the company's litigation over the past 24 to 36 months.
- What services do your outside firms perform? This requires a review of legal bills during an 18- to 24-month period. One method of analysis is to categorize bills by business department or function and then by matter or type of matter. Look for trends to see if in-house staff can provide any of these services more effectively in a cost-efficient manner.
- Can routine, low-risk projects be reassigned from senior attorneys to junior attorneys or from attorneys to paralegals with proper supervision? Everyone in the department benefits from handling more challenging work that is suited to their respective abilities.
In constructing your department, attorneys can be linked to certain departments in the company or grouped together by certain types of legal services.
If the attorneys are linked to specific business functions, they will have the opportunity to gain a wide range of legal experience--from contract negotiation and drafting to litigation. Each attorney will theoretically become the legal department's expert in that area of the business to which he or she is assigned. In addition, the clients will benefit from interacting with the same attorneys on all of the issues affecting their function. This builds trust and confidence on both sides.
If the attorneys are organized by type of legal service, one group of lawyers should handle all of the contract negotiation and drafting for the company while another handles all of the company's litigation (and so on), regardless of which business function is involved. Each attorney develops, and thus becomes proficient in, a specific skill set.
Constructing a legal department is a work in progress that requires fine-tuning or even major overhauls from time to time. It is important to seek input from your department. This will add value to the outcome and guarantee that all members of the legal department embrace the goal of providing quality legal services to your client's business in a challenging and motivating environment.