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CCCA_V5No1_Dept-Performance-FIN.qxd:CCCA_V1No2_Dept-MgLaw-V1.qxd 2/2/11 3:02 PM Page 10 Performance In The Law Department (internal and external) legal spend is on a $160 per hour, depending on the experience proportion of work which is not “billable” (in firmer footing when it comes to demonstrat- levels of counsel and where the department is a law firm sense) is too high, if the hours per ing its cost-effectiveness. It is one thing to located. This notional hourly rate should be week are too low (not much chance of that),or reduce/control external legal spend, but quite about 40 per cent less than the hourly rate were if the support staff ratios are too high. another to reduce the “effective rate” of inter- the work to be provided by a law firm.The nal counsel.The unit price of the legal depart- weighted rate for the legal department will be Effectiveness ment will typically range between $125 and high if too many of the lawyers are senior, the Is the company getting its money’s worth from internal and external counsel? The answer must be unequivocal,if the second part of the cost-effectiveness equation is to be considered. We surveyed the legal departments of 11 pub- licly traded companies last year to see if they A conducted a formal client survey. Only two said they did.The General Counsel of most of Tradition the other companies meets with the business of units and with executive management to dis- cuss the contribution and performance of the Business legal department. In a few instances, the lawyers also self-assess the overall performance of the department and the findings and differ- Whether conducting business ences are discussed. in Canada or across the globe, One legal department recently decided to Aird & Berlis LLP understands anchor the evaluation of the department the realities of your work. with six factors found in the value index, Our clients benefit from the firm’s even though this is usually used to evaluate solid relationships with major law firm performance.The factors are:under- institutions, government authorities stands objectives/expectations; legal expert- and renowned national and ise; efficiency in process management; international law firm affiliates. responsiveness/communication; predictable We combine the depth and strength cost/budgeting skills; and results deliv- of Canada’s largest firms with the ered/execution. With the exception of legal creativity and effectiveness of expertise (one could simply say expertise), smaller firms. each of the factors applies to any manage- Count on us for legal counsel from ment or professional position and very little is a business perspective. ® left uncovered. Every General Counsel should measure the cost-effectiveness of the legal department Eldon Bennett Managing Partner once a year.The findings create opportunities ebennett@airdberlis.com that can only benefit the company and recog- 416.865.7704 nize the contribution of each lawyer. Richard G. Stock,M.A.,FCIS,CMC is a part- Partnership. Results. Success. ® ner with Catalyst Consulting.The firm has been designated by the Canadian Corporate Counsel Association as a Recognized Supplier of Law Department Services Consulting. It is the Brookfield Place, 181 Bay Street Recognized Provider for Legal Department Suite 1800, Box 754, Toronto, ON M5J 2T9 Consulting designated by the Australian Corporate www.airdberlis.com Lawyers Association. Richard can be contacted at (416) 367-4447 or at rstock@catalystlegal.com. 10 CCCA Canadian Corporate Counsel Association SPIRNG 2011