The In-House Experience: Working Smarter
This week, Halebury’s Richard Dalby discusses ways in which in-house legal teams can work smarter and create efficiencies.
Like most people in the modern business environment, managers of in-house legal teams are under pressure to deliver services more effectively and efficiently. It is important that they add value to the business and that they are able to demonstrate and quantify how they are doing so. The situation for each team will be unique depending on their resource, their business sector and the character and risk taking profile of the senior management of their business, but these are some of the areas where improvements can often be made.
The requirements of the legal team will not always be readily appreciated by other parts of the same business and IT provision is often accounted for across the company or group as a whole. Anything different or additional for the legal team will have to be justified on a financial basis. It’s part of the responsibility of the management to be able to do this. The recent Looking Glass Report on the future of the legal sector indicates that for in-house teams generally the future will bring an increase in workload but not in resource and suggests technology, both general and legal/industry specific, will be needed to bridge this gap. Among topics for consideration and evaluation are;
- A contracts database for creating and/or storage of documents. There are a number of possibilities available, bespoke and off-the-shelf, which can be tailored to individual business needs but will generally address contract lifecycle management and contract storage and analysis. Used effectively, the former type of system can be used by sales or procurement teams to input key commercial terms and to generate standard and first draft contracts thus allowing the legal team members to use their time more expeditiously on more complex drafting and negotiation. It has been reported that in companies generally some 12-15% of all contracts are lost or unaccounted for. If you also take into account that 60% of corporate litigation is related to contractual disputes document management and safe keeping can be seen to be an area where substantial improvements can be made relatively quickly and easily.*
- Legal teams do not need access to every type of high technology but in most cases they will benefit from efficient and effective video and telephone conferencing facilities, well serviced meeting rooms, efficient and confidential colour printers and appropriately speedy and effective hardware. For example many find access to wide or double computer screens useful to allow efficient comparisons and drafting of documents.
- Access to online template libraries and knowledge databases both internal and external. There are many commercially available resources as well as the vast amount of internally generated information both from within the legal team and the wider business. It’s important to think about what is really useful and necessary to the team and ensure speedy and effective access to that resource.
- IP and property management systems where appropriate such as databases to maintain accurate and searchable records for land, rights, trade marks, patents, licences or other assets of the business.
In every company or business it is vital that there is a reliable keeper of records and in many cases that will be a function of the legal department. More than anyone else the legal team needs to have accurate and accessible systems. Some of the following will generally be useful:
- Up to date legal systems need to be able to find any document easily and quickly. It is also important that files and correspondence are easily locatable by any member of the team and for this to happen every member of the team must used a centralised and agreed upon method of filing. If a member of the team is away from the office, or leaves the business altogether, it is crucial that information is not lost to or hidden from the team and that anyone can pick up and review a file and find an accurate and up to date position at any time. This means an end to localised filing on personal hard drives other than for working drafts and non-business related matters.
- Using short concise agreements, including standards and templates, wherever possible and if the business deals with the same people repeatedly then aim to agree standard terms. Lawyers are notoriously bad at accumulating clauses and drafting with the result that in-house standard forms can be incredibly detailed, lengthy and one-sided. If this is the starting point for every deal, no matter how financially or strategically important, then a business will need an army of lawyers to negotiate the contracts.
- Email systems – there needs to be an agreed system of centralised filing for e-mails. Email correspondence has come to dominate our working lives but it is important to agree on a methodology for their use. For example, agree certain times a day for e-mail answering to prevent them intruding on normal day to day working, have guidelines on when to pick up a phone if an e-mail exchange is not clarifying issues, say after 3 exchanges and ensure training on cultural and international differences in language and style of e-mail correspondence. Finally, email correspondence and all attachments have to be filed centrally in line with the filing system referred to above.
- Maintaining a work in progress system to allow for the proper monitoring of workload and the progress of current matters. It is a vital tool for capturing the totality of the workload undertaken by the department. Use it to report to other parts of the business and for allocating new matters fairly and responsibly.
- Agreed negotiating parameters – where possible agree parameters in commercial and legal terms within which a member of the legal team can be allowed to negotiate and conclude terms when a contract has been passed to them for completion. So, for example, if a standard costs allowance in a contract is, say, 5% of gross, the agreed negotiating parameters could provide for a starting point of say 7.5% with leeway to negotiate down to 4% with some specified allowed exceptions to the definition of gross. Within these parameters the lawyer or contract negotiator can agree terms without recourse to a manager or back to the deal maker. This frees up the deal makers to look for new deal opportunities rather than tying them down with the detail of concluding documentation. Thistles work to establish a good system but once in place is time efficient and empowering for the individuals concerned and therefore of value to the business
Historically legal teams have been so fully occupied with firefighting and urgent transactional work that there has been little time or aptitude to look for pro-active opportunities to contribute to the success of the business. These are important not only to help that success but to integrate the legal team into the business as a whole and to demonstrate an affinity with its financial challenges. There will be different appropriate opportunities in every business situation but some or all of the following may apply;
- Look out for changes in law or regulatory frameworks that require dissemination and/or explanation, create pro-active and online training where appropriate as, for example, when the business moves into new areas of activity. Keeping and storing records of participation in training and, hopefully, the lack of complaints relating thereto will over time help to demonstrate the effectiveness of such projects.
- Being pro-active can in some circumstances also mean saying no to work. It is not always the best use of time and resource to respond to whatever is asked of you by an in-house client. This needs to be agreed with senior management but the department should be responsible for taking a view on what is of most value to the company and, in some cases, offering alternative solutions or simply saying no.
- Offer to speak at conferences, gatherings and other team meetings within the business as a whole. Get your message across persistently and engagingly.
Being and feeling a part of the business as a whole is a important part of maximising the value and effectiveness of the team. There are many different ways to help achieve this but it is important to get the buy-in of senior management and the members of the legal teams themselves. This needs to become a part of everyday life in the legal team and some or all of the following may be helpful.
- As head of the legal team it is important to understand the business and the industry and markets in which it operates. Who are the competitors, what are the main challenges and opportunities and what is the strategy for achieving the company’s goals? It is also important to then identify the legal team’s role within that and to be able to say with clarity how it is contributing towards success. This needs to be communicated with the legal team on an ongoing basis and they should have opportunities to have meaningful input.
- Invite experts from across the business and external advisors to come to your team meetings to give talks about what they do together with question and answer sessions. Look for opportunities to socialise (at the company’s expense) with other parts of the business and establish better working relationships and channels of communication;
- Networking within your business and with external advisers. This is important for personal career development but also because it helps to understand the aspirations and difficulties experienced in other parts of the business.
I have discussed elsewhere some ideas about the importance of measuring and rewarding performance both of the team as a whole and the individuals within it.
Key issues are:
- Measuring and demonstrating what your team is doing and using metrics to value that input.
- Seeking and acting upon client feedback. Ensure there is a system in place so that questions are put to the appropriate people and, that if meaningful comparisons are going to be made, you continue to ask the same questions.
- Measuring and rewarding the performance of individuals within the team.
Follow Richard Dalby on Twitter on @rdalby123
t: +44 (0) 207 127 2500
m: +44 (0) 778 067 1157
For PR enquiries please contact:
Head of Business Development and Marketing
t: 020 7127 2500