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CCCA_V4No3_Dept-Performance-V2.qxd:CCCA_V1No2_Dept-MgLaw-V1.qxd 9/2/10 7:27 AM Page 11 Highlights of the 2010 Performance In The Law Department Australian and New Zealand benchmarking report By Richard G. Stock hy would such an “esoteric” Wstudy be useful for Canadian law departments to read? Perhaps not the entire 150-page document, but the highlights are worth noting because the issues, the trends and the innovation apply around the world. Launched in 2008 by the Australian and New Zealand corporate lawyers associations, a revised report was released in July. More than 160 organizations participat- ed, with about 40 per cent of these from the public sector or government-owned organizations. tor than total legal spend (internal and multi-year forecast (specialization, hours) The effectiveness of legal departments is external) as a proportion of corporate of the demand for legal services and for analyzed with a dozen sections dealing with revenues. Internal spend typically includes strategic advisory work before deciding different aspects of performance manage- indirect and overhead costs, but excludes whether you are understaffed. ment. Defining, capturing and communi- external fees. External spend excludes cating value of the legal services contribu- third-party costs and taxes. The bench- Reporting Relationship of CEO: Add tion now seem less elusive. There are of marking report does a good job in com- related portfolios of work alongside the course the requisite chapters on legal spend, paring the fully-loaded hourly rate for legal department to ensure the CLO external providers and fee arrangements. legal departments with that of law firms. reports to the CEO. The relative size of legal departments is That still remains at 40 per cent to 50 per discussed. The tendency for public sector cent of what would be paid to law firms Roles for Other than Lawyers: Add legal departments to in-source large for the same type of work as carried out experienced paralegals and reduce clerical amounts of their legal work, including liti- in the legal department. / secretarial staff in support of commer- gation, means that generalizations about One of the biggest challenges with cial, corporate and regulatory activity, and department size — either too small or too comprehensive reports such as this one is in aid of litigation management. big — cannot be made. In other instances, to quickly identify the most useful parts global corporations will have some of their and then to find the time to plan and a Reporting Structures: Ensure 100 per work — IP, corporate governance, financ- course of action.The ACLA — CLANZ cent of lawyers report functionally to ing — carried out by lawyers in the head- Legal Department Benchmarking Report the CLO. quarters country.This is certainly the case offers a head start by offering over 50 in Canada. Still, the factors which drive Action Tips throughout the report. Some Legal Department Seniority: Ensure ISTOCKPHOTO growth and the re-configuration of legal of these are worth sharing. that the work of senior lawyers in the department is of significant complexity. departments are discussed and ranked. This requires a redistribution of work and Headcount is less useful as a compara- Legal Department Size: Prepare a AUTOMNE 2010 CCCA Canadian Corporate Counsel Association 11