When a legal department operates solely in a reactive mode, the business team can easily minimize its added value. However, when a legal department operates proactively to support the growth of the company with its business partners, its usefulness is readily apparent.
In the current environment of uncertainty and change, in-house counsel struggle with the legal department’s role as that of a “firefighter” functioning in crisis mode only. The legal department can use certain simple tools to shift the paradigm from the reactive to the proactive mode.
One effective technique is derived from social networking principles. Over an appropriate period of time, all attorneys and paralegals should keep track of each exchange they had with business team members. The legal department should first focus on a particular department that might be the most sensitive in terms of risk and exposure.
Each member of the legal staff can use a simple grid chart. On the vertical axis of the grid should be the names of each business team member, and along the horizontal axis should be the type of contact, e.g., face-to-face meeting, telephone call or email. The staff member should keep track of each contact with a business team member by checking the grid in the appropriate box.
Once the time period is over, tabulate the information on the charts for each staff member and for the entire legal department. Each attorney or paralegal should carefully review her own information. She will readily determine the business team members with whom she interacts and the frequency of contact—probably something that she already intuitively knows. More importantly, she will see the gaps where minimal or no contact has been made. The gap may be a particular individual or may be a sub-unit within a department. The attorney or the general counsel, depending on the level of risk associated with the individual’s responsibilities, should engage in a friendly inquiry. This almost always results in better contact between the individual or sub-unit and the legal department.
In reviewing the overall results, the general counsel can make some meaningful observations. Is a disproportionate amount of legal resources being devoted to a portion of the business that does not generate the profit to warrant the level of activity? Is the legal department focusing on those individuals aligned with the strategic aspects of the business? Is the legal staff heavily relying on email exchanges with its clients? Is there a sufficient degree of “face time”?
In a business that requires continuous legal support for compliance matters, establish a system that keeps track of each matter handled by the legal department and then accumulates the data on a monthly basis. By compiling the information on a monthly basis and converting the data into graphs and charts, the legal team can see whether there has been an increase in demand over time and allocate its resources accordingly.
Off-the-shelf expense-tracking software can follow the business sources generating outside legal expenses. The department must categorize fees in each itemized outside counsel invoice by department, division or project. In reviewing monthly results, focus on practice areas with considerable outside counsel fees. If you observe that the company regularly needs the resources of a firm specializing in an area of law where there is already in-house expertise, use that information to shift the responsibilities to the legal staff in order to handle the workload internally and reduce the costs associated with outside firms.
By employing these tools effectively, the corporate legal team will be better able to allocate the resources necessary to reduce the company’s risks and engage those business members with whom it has not had sufficient interaction. The in-house counsel will be much better poised to become a more proactive player in the business.
Thomas Lalla is SVP and GC of Pernod Ricard USA.