Page 46 - CCCA61_2009

CCCA_V3No1_BackPg-FIN.qxd:CCCA_V1No2_BackPg-V1.qxd 1/21/09 3:19 PM Page 46 Closing The Deal Managing through a prolonged downturn Seven questions to ask yourself as the economy worsens. he difficulty in managing through any magnitude and duration. We initially dis- effectively in-house, or is it time to build Tdownward cycle is trying to determine: cussed the various trends that collectively our skills in some areas? how long will this last? Conventional wis- would suggest a prolonged recession, then dom, publicly espoused since mid-2008 by distributed a questionnaire for each lawyer • What can we now do to get closer to a number of market watchers and legal to share candid views and suggestions.The and enhance the relationships we have consultants, is: “The recession will be resulting deliberations were spirited and the with our client departments, which we intense, but short. Everyone wants to get action plans thoughtfully conceived. may not have found sufficient time in back to normal. Short term, the backlog of Here is the exercise I conducted. I would the past to do properly? real estate will be sold as owners accept recommend it for your next internal meeting: losses;banks will end the credit crunch;lay- “Assuming this was going to be a pro- • How can we recognize and reward offs will make companies more efficient.” longed and painful economic downturn, internal performance when our ability At the risk of being labeled a pessimist, how would that affect our legal depart- to offer the kind of compensation my view is far less confident. I believe that ment’s thinking and the decisions that we increases that we have in the past could unlike past experiences,this recession was- make with respect to the directions we be somewhat limited? n’t caused by a downward spiral in a few pursue on a number of fronts?” isolated industries.It started with the burst • Are there underperformers in our depart- of a protracted housing bubble and then • Are there any areas of discretionary ment that we have been slow to address metastasized into a full-blown credit spending (functions that have tended to and that now need timely attention?” crunch, eventually destabilizing the entire “put on weight,” nonessential projects financial system. that seemed like good ideas at the time, When it’s business as usual, there’s no I submit that at least until 2012, every etc.) where you feel we could be mak- real sense of urgency about actually time you think I’'s safe to get up and dust ing budget cuts? changing anything.Think about incorpo- yourself off from this downturn, every rating the possibility of a long recession time you feel like you’ve endured the • Are there any areas (supplier contracts into your strategic thinking. Instead of worst of it, another piece of news is going that could be renegotiated, tasks that merrily assuming that everything will to come along to freshly bludgeon you. could be automated, meetings that turn back up in a few months and healthy This time, the economic slowdown is could be held without travel, resources growth will again be the norm, build going to be a lot different and, in many that could be moved to less expensive assumptions around how to manage in a ways, a lot tougher. locations, etc.) where we could be more prolonged recession as part of your Whether I’m right or wrong is imma- creative and cost-effective in how we department’s immediate planning. terial. What is relevant is whether you are operate our department? prepared for a worst-case scenario. What Patrick J.McKenna (www.patrickmckenna.com) is worth acknowledging is that this eco- • Given that most external law firms his- is a principal in Edge International and since nomic downturn could present an oppor- torically raised their rates at the begin- 1983 has worked exclusively serving the legal tunity to introduce meaningful change, ning of every year, are there areas in profession.He is the author of numerous business not normally an easy subject to discuss. which we should now be strongly bestsellers, including First Among Equals: How I had the opportunity recently to facili- requesting increased added-value and To Manage A Group Of Professionals (Free tate a group in creatively exploring what decreased legal costs? Press, 2002). In 2005, the book Management their world might look like, and what spe- Skills (John Wiley/Jossey-Bass) named him cific strategies and direction they might • Do we have the right mix of intern- among one of the leading thinkers in the field of pursue,if this really was a downturn of some al expertise to do more work cost- business management. 46 CCCA Canadian Corporate Counsel Association SPRING 2009