Challenges for the General Counsel - Structuring and Effective Global Law Department
Susan is the CEO of Legal Executive Leadership, LLC, a law practice management consulting firm she founded in 2011 after serving as the Senior Vice President and General Counsel of the Association of Corporate Counsel (ACC) for more than two decades. As an insider working with thousands of top corporate practice leaders, Susan has an amazing breadth of experience with the inner workings of in-house practice and the implementation of value-based legal models, as well as an international reputation for innovation, excellence and success.
This post originally appeared in Thomson Reuter's Corporate Counsel Connect Blog in January of 2014.
I live and work in the U.S. – but my practice and my clients are global. It's likely that if you're a law department executive, you can say the same thing about wherever you live and work (local), and the people your practice touches (global).
When I first started talking to general counsel who were responsible for and struggling with handling global legal matters, the problem most regularly cited was that the vast majority – if not all – of their lawyers were in their company's "home" jurisdiction – all housed locally at the company's HQ. Yet the company had work on the ground in far off places, each of which had its own jurisdictional quirks and requirements, many of which involved additional languages, and all of which sported different legal professional traditions. Nevermind having to retain law firms they'd never heard of.
Although that was more than 25 years ago and the problem is rarely that everyone's located in HQ and trying to do work everywhere else, today's general counsel is still struggling with issues involving the globalization of the legal team, even though the issues and the composition of their departments and practices have changed substantially.
Most of their current issues fall into at least one of the following categories:
-The largely domestic company with some irregular issues outside of the company's home country, and perhaps more global expansion on the horizon. This makes for not enough work currently to justify opening department offices in many other jurisdictions, but enough to feel the pinch of the cost of a regular need for fairly expensive counseling from firms with relevant expertise. Often the law firms these departments retain have a global footprint that is very large and expensive, but they are considered a "necessary evil" because the department doesn't have enough experience with the jurisdictions they're in to self-counsel or hire smaller local firms.
-The department that is large and represents a truly global business, with department members and offices with local operations around the world. An increasing number of the lawyers in those global offices are indigenous to the region, and have minimal connection to or experience with the larger corporate HQ or the "home" country jurisdiction.
-The department that now has lawyers attached to business units wherever those units are located, an increasing number of which are outside of the U.S.
-The department that has become a global department not by choice, but by acquisition of legacy departments sucked into the larger structure by combo.
Whatever the kind of department, the "structural" issues that confront legal global department executives are universal and often include:
•Reporting: Should lawyers be on a solid or dotted line reporting relationship to the GC in the HQ? Often, when located in distant places, "local" lawyers report directly or functionally to local business leaders in the company. Is that acceptable? If it isn't, is there anything the GC can (should) do about it?
•Evaluation and Compensation: How are lawyers, whose work is generally removed from the department's larger agenda, properly supervised: evaluated, compensated, promoted, rotated, or removed? Is it on separate or similar grounds as those applied to the lawyers at the headquarters? How does the executive team even figure out how to evaluate the work of the non-local lawyer working on matters not being coordinated through the HQ?
•Business Operational Standards: Creating a global legal operating structure that aligns lawyers with the business' top priorities, including effective corporate compliance and business support/acceleration. The legal department around the world often functions via lawyers operating in local jurisdictions with differing and sometimes conflicting standards or awareness of the top-line business agenda.
•Lawyer Professional Standards / Legal's "M.O.": Creating a consistent and predictable standard for law department services that offer clients both top-notch service, as well as the confidence that the lawyers of the legal department act with unimpeachable integrity, superior substantive expertise, and the highest standards of conduct.
•Selecting Talent and Coordinating Outside Counsel Retention and Management: Regardless of whether or not the department's work is significant enough to afford a deep network of pre-identified local firms or locally-sited indigenous in-house lawyers, most legal executives don't know how they will identify top local talent whose skills are well-aligned with the way the department works and the services the department needs to have them provide. On the issue of outside counsel retention, general counsel must be wary of too many different firms who are operating on too many different terms.
•Administering the Budget and Controlling Costs: It doesn't matter if every business unit has its own budget, or if some units charge back costs to clients, or if some clients are retaining legal help without consulting or coordinating with the GC's offices: the budget and costs must become more predictable and more consistent from jurisdiction to jurisdiction. No one in corporate finance wants to see that operating agreements written and negotiated in Jurisdiction A are eight times the costs of the same services in Jurisdiction B.
•Creating Technology Platforms, Document and Data Systems: Legal executives often turn to technology and data, as well as the metrics that flow from them, to monitor the activities of individual lawyers and the matters they manage locally. Creating shared information and collaboration platforms allows for real-time interaction between distant parties.
•Communications and Culture: Perhaps the most elusive issue plaguing the global GC or her leadership team is the need to encourage a common culture and interaction, while simultaneously respecting the value of local differences.
One Size Fits One
Of course there is no textbook or simple "best practice" for any of these issues, but here are a few of the tools that I've found effective in my own practice, and that have worked very well in departments looking to create a unified team and consensus strategic plan to direct their department's efforts across the globe: feel free to email in your ideas, too, and we'll report them in a future issue.
Survey Your Lawyers: If you don't know how to manage all these diverse people better, maybe you can start by asking them for their perspectives and ideas. Send your own team a simple online survey asking them to identify things they'd like to see improved, and how they'd prefer to be coordinated. You may find that people are very willing to move closer to a GC who is interested in their observations and includes their opinions and preferences, rather than dictating from afar.
Survey Your Internal Clients: How do your business partners want their legal services provided? Are they happy with what they're getting? Do they perceive gaps? Are there opportunities for the department to seize? All of this provides the strongest justification for change when the GC announces strategic ideas to streamline or re-engineer the department's practices for greater global efficiency.
Examine Benchmarks from Other Companies: While no other company has it down in every category, perhaps there are ideas or practices perfected in another company that you can learn from without having to re-invent the wheel: a sample slate of metrics, a cross-department communications strategy, a sample global firm retention policy. Shop for both ideas and practices that are tried and true, rather than assuming you have to invent them all yourself.
Allow Your Department's Lawyers and Staff to Help Make the Decisions: Give them the opportunity to weigh in on how they can be better connected, coordinated, and collaborating. The GC should be the one to decide to drive such an effort, but it will never be effectively implemented or adopted unless it is "by the people and for the people." This will create active engagement and support. By empowering your staff you will also give them a chance to meet and connect with team members around the world and work with counterparts they'd otherwise never interact with. As each group of lawyers contributes to ideas with perspectives drawn from their own "local" experience, the power and potential of the global legal department and its many diverse members quickly overshadows any of the structural challenges that its executive leadership may face in uniting them.
Susan Hackett, CEO, Legal Executive Leadership, LLC
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