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{ legal PeRFoRMance }

Budget mAstery:

the 100-Book experiment Continues

By Jonathan Cullen

Budget. No six-letter word in the history of law department rhythm of making business cases and do-
management has caused more torment, cajoling, strong-arming ing so through story. Stephen Denning’s
The Leader’s Guide to Storytelling or Chip
or capitulation. Despite its appearance as a seemingly simple and Dan Heath’s Made to Stick offer solid
estimate of income and expenditure for a set period of time, the frameworks. In Jane Mayer’s political ex-
posé, Dark Money, we see very effective
law department manager often reviles it as a constraint on her uses of storytelling, though not for noble
team’s vision, an unrealistic set of handcuffs on a perfect plan purpose.
designed to catapult this legal team beyond cost centre and 4. Don’t just hire outside counsel—
create value with them. For most law
drive her organization to glory. departments, external legal advisors eat
up the lion’s share of the budget. The Pa-
reto principle then demands that you put
henever I’m gripped by this budget- as described in Nassim Nicholas Taleb’s a signifcant amount of energy and time
induced fever, I fnd it useful to engrossing and somewhat disturbing The
Wground myself in reality and per- Black Swan: The Impact of the Highly Im- into managing this line item. While there
are many different quantitative methods
spective. As I described in our spring and probable.
summer issues, I recently endeavoured to to address cost reduction efforts with
outside counsel, do not underestimate
read 100 books, in part to gain such per- 2. Budgets are relationships. Like any-
spective. Here are the learnings I would thing else in life, you’re more likely to get the impact you can have on the other side
of the equation: value creation. My orga-
apply to managing a budget. what you ask for if you have a relation-
ship and credibility with the person from nization leverages its scale through use of
1. Understand what the CEO and CFO whom you’re asking. This track record is our Pfzer Legal Alliance, a group of pre-
want you to know. There’s no getting not built overnight and it’s too late to do ferred frms around the world. What is
around it: you need to be able to navigate so when you’re already in need. Demon- central to this concept, in addition to the
fnancial concepts and speak the language strate that you understand the value of cost structure, is the energy both client
if you are going to successfully manage the organization’s resources. Having good and frms put into developing relation-
your legal budget. But that is a very lim- working relationships with members of ships, learning the business and thinking
ited and unambitious objective. From a your management team is vital, as set out in news ways. What underpins this is the
broader perspective, honing these skills in John Kotter’s Power and Infuence: Be- desire for long-term relationships. I chal-
allows you to elevate simple legal advice yond Formal Authority. lenge them to make my problems their
to meaningful counsel based on practi- problems. In a more innovative struc-
cal fnancial impact. No in-house counsel 3. Develop a reputation as an evidence- ture, that is not impossible. When con-
can be truly effective without operating based storyteller. Your fnancial under- sidering how best to deliberately design
at this level. Absorbing Ram Charan’s pinning in any budgeting situation must your next relationship with a law frm,
What the CEO Wants You to Know or Josh withstand deeper probing. Works like try the simple structure in the classic
Kaufman’s The Personal MBA are great The Halo Effect and Moneyball will train The 7 Habits of Highly Effective People:
starting points. Adam Bryant’s insights you to spot biases, fallacies and weak- be proactive, begin with the end in mind,
from over 200 CEO interviews described nesses in assumptions. But even with put frst things frst, think win-win, seek
in Quick and Nimble is a window into the solid underlying data and proof points, to understand, combine strengths and
concerns and dreams of business leaders. you still need to weave them into a com- sharpen your saw. Your frm will be more
Don’t neglect to leave think time to take pelling narrative. As Taleb says, “You need engaged and suddenly the focus will no
advantage of or mitigate random events a story to displace a story.” Get into the longer be solely fnancial.

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