Page 9 - CCCA61_2011

CCCA_V5No1_Dept-Performance-FIN.qxd:CCCA_V1No2_Dept-MgLaw-V1.qxd 2/2/11 3:01 PM Page 9 Performance In The Law Department The nuts and bolts of cost-effectiveness By Richard G. Stock here is a great deal written and discussed in the corporate legal department.And when and others spending 90 per cent. Note that Tabout how law firms could and should they are available, they are too often doing 90 the remaining 10 to 40 per cent of the time improve, if not transform, their service deliv- per cent of the hours on their own files rather may be a valuable contribution to the compa- ery and their effectiveness. The initiatives than working as a team members with senior ny, but this is time that has to be managed as include :reducing the cost of overhead;lever- counsel.More often than not,it is the case that an investment — especially when other work aging technology for practice management; senior counsel will personally do a junior-level that could be done internally is referred to changing the mix of senior and junior task on a matter rather than delegating it to external counsel. Our advice is to have expe- lawyers;and introducing para-professionals for another member of the department or co- rienced counsel spend at least 80 per cent of many specializations.The application of legal counselling with associates from the preferred their available time on substantive legal work. practice management systems to complex law firm. Everyone in the legal department The second part of the analysis is to char- legal work helps contain and better configure seems too busy and regularly functions as an acterize and measure the demand for internal the deployment of legal and technical independent practitioner with a significant and external legal services at a detailed level resources on a matter-by-matter basis. Clients “book of business”within the company. with a 2 – 3 year time horizon. One has to like it and the firm benefits.Finally,alternative know if the lawyers are doing the “right fee arrangements, designed to promote and Efficiency stuff.”The activity is parsed by type of legal reward efficiency and recognize the value of a I was recently asked to advise a company on work, its relative complexity, its source and law firm’s contribution,are finding their place. what it could do to improve the cost-effective- timing, and the estimated number of hours. My experience is that only the well-estab- ness of its 60 lawyers,distributed in 8 locations. The results are not perfect,but they do allow lished legal departments, say those that have The organization was still referring 60 per planning assumptions to be developed, and been around for 20 years,are asking the same cent of its legal work to firms — because of the alignment of lawyers with key user questions of and trying to come up with their their unique expertise, large volumes, and groups. From there, it is easier to manage own answers. Companies are more multi- because it was often more cost-effective for expectations for timing and turnaround. In jurisdictional than they were 10 years ago.The geographic reasons. Still, a good number of addition, counsel can then engage the busi- internal users (read clients) of the legal depart- internal users were not satisfied with the serv- ness unit to better scope the matter involved, ment turn over so quickly that it seems one ice levels of the legal department, especially regardless of whether it is for internal or has to “start building relationships all over when it came to timely turnaround.The prob- external counsel.Fewer than 1 out of 10 legal again” every five years or so. lem was compounded by a spike in turnover departments have protocols for intake and for Still, a private sector legal department is within the legal department. A three-step service levels.With workloads and workflow not a captive law firm. Surveys tell us that 70 approach seemed to make sense for the analy- the way they are, logjams are inevitable and per cent of the legal population in companies sis of the legal department and to assemble a are becoming more frequent.They frustrate is focussing on corporate / commercial work range of solutions to improve efficiency. the client and the lawyer. Having a reliable and that about three-quarters of the lawyers The first of these was to better understand forecast means the legal department can bet- have 10 or more years of experience. In fact, the capacity of the legal department on a ter manage and increase its capacity to influ- the level of experience is rising faster than the number of dimensions. Very few corporate ence and to service demand.It can do this by level of complexity of the work that has to be legal departments keep time or bill at the mat- dealing with the scope of the work, its tim- done. Senior counsel in both large and small ter level. So other approaches are needed to ing, and the use of junior professionals and legal departments are more likely to be find out how much time is put in on adviso- para-professionals. Finally, a good demand involved in strategic and advisory work than ry work, substantive legal work, and adminis- forecast is a prerequisite to any business case are more junior lawyers and external counsel. tration and management. Interviews and a for more resources in the legal department. The work week for corporate counsel aver- detailed questionnaire help clarify the picture. The third step is to establish the fully-loaded ISTOCKPHOTO ages 45 – 50 hours.The interruptions are con- Aside from the General Counsel,one can find (overhead and indirect costs included) hourly stant. But teamwork is less apparent,given the corporate counsel spending as little as 60 per rate for the legal department. A legal depart- ment that can reduce the company’s total cent of the time doing substantive legal work small number of junior counsel and law clerks PRINTEMPS 2011 CCCA Canadian Corporate Counsel Association 9